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Programmatic Television - Explained

Updated: Feb 27, 2021

We'll skip the preamble, you're here to get a better understanding of how buying advertising on television works, programmatically, and we're here to tell you. So let's start with breaking down the key terms and providing some much needed definitions.

Programmatic TV buying (PTV) is a method of serving ads to individuals in broadcast media (i.e. television, radio, internet). It gives brands the ability to purchase ad space through platforms with sophisticated algorithms, specifically designed to organize ad placement based on real-time performance. Instead of running the same ad for all viewers of a TV show, you can show different ads to different people, during the same show, that better correspond to their interests, age, level of income, etc. This household level targeting is also called Addressable TV (ATV).

Over time, media advertising has evolved from regionally or nationally targeted television and radio ads, to audience segment specific targeting across multiple mediums. Ready for a few more definitions?

Connected television (CTV or Smart TV) is any device which is designed to support multimedia (text, image, audio, video, and animation) and connect to the Internet (internet-capable TV set, video game consoles such as Xbox, PlayStation, Blu-ray Disk Player or streaming video device). This term is often used to reference the advertising being purchased, but it's not a marketing channel. CTV is a hybrid TV, a merging of computer technology and television, with a user interface resembles a smartphone.

Using connected TV devices, viewers can access video streaming services (i.e. Netflix, Hulu, YouTube, Pandora) and search movies, photos, and other digital content on the web.

Over-the-top (OTT) is named for devices that, literally, go “over” a cable box to give the user access to TV content. In OTT channels, content is delivered via an internet connection rather than through a traditional cable/broadcast provider. It also doesn’t require an active TV streaming service subscription.


Programmatic media buying and connected devices is a lot, we know, but it's also uber-relevant in a real-time, on-demand, time-shifting world. In 2018, 55% of the U.S. used a connected device to stream content over the internet versus paying for cable television services. This means that more than 164 million U.S. internet users access video content via connected TV devices, and this number is predicted to grow up to 204.1 million viewers in 2022. The penetration of connected TV devices in the United Kingdom, Japan, Germany, and France will surpass 50% of households over the next two years, according to the Interactive Advertising Bureau. As a side note: these stats do not include podcasts and internet radio (i.e. Spotify, Pandora, Apple, Google Play, Tidal), which also seen significant consumption growth over traditional radio.

More than a half (55.5%) of the U.S. population makes their TV smart with Roku, Apple TV or gaming consoles, abandoning traditional (linear) TV consumption for Internet-powered television.

Incorporating programmatic TV media buys within your marketing plan is a great way to reach potential customers no matter how they are consuming content. This tactic is perfect for business objectives focused around increasing engagement and raising brand awareness.

So, What are the Benefits?

  1. Budget - your marketing dollar will have a larger impact because programmatic CPMs are less expensive than traditional TV costs and with more specific targeting, there will be less waste (reach more of the right people).

  2. Targeting - universal logins (connecting to Facebook or Google accounts from devices) provides detailed and accurate user profiles, allowing targetign based on geolocation, zip code, interests, online behavior, device, language, and more.

  3. Results - due to the way people consume content across various devices, ads are more likely to be viewed (think an ad during a comedy show versus an ad at the bottom of a blog page). Most services also require ads to be viewed in their entirety, leading to higher completed view rates. Lastly, more information is captured around engagement and conversions post-view to guide optimizations and measure the success of the campaign.

Here are a Few Best Practices

  1. Create good quality creatives developed in high resolution - brands often underestimate the impact of original and memorable creative, but that is an essential visual hook that is supposed to convert viewers on big screens.

  2. Implement relevant targeting - take advantage of the detailed targeting available and set the target options within the advertising platform to reflect the unique audience that will care about your message. Traditional TV is for targeting everyone, programmatic TV is for targeting the right one.

  3. Consider the halo effect of branding - awareness and consideration tactics drive revenue, but usually later on down the line. If you want to accurately gauge the success of your programmatic TV campaigns, utilize a single marketing platform to run all tactics so you can leverage attribution tracking as much as possible. (i.e. capture data on users who viewed your CTV ad, then searched for your brand on Google from their tablet the same day, and then visited your store a week later after pulling up directions on Google Maps). The CTV ad drove the engagement, the search ad (or SEO listing) increased consideration, and the business listing captured the conversion!

The word programmatic by itself is aggressive, and television advertising in general may seem out of reach for your business, but it's not! Once you get beyond the acronyms and industry jargon, programmatic TV buying is as simple as defining your audience, setting your budget, and distributing quality content.

Want some help? A dXm eXpert can guide you on how to craft the right marketing strategy and execute your marketing campaign. Sign up here.

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