Programmatic TV (PTV) is a small, but growing opportunity. PTV is still in very early days, with ad spend reaching an estimated $1 billion in 2016, just over 1% of traditional TV’s $73 billion. However, programmatic TV ad spend is forecast to grow at a five-year compound annual growth rate (CAGR) of 71%, to reach more than $14 billion by 2021, according to AdAge.
TV ad buyers currently allocate a very small portion of their budgets to programmatic TV. In 2016, 63% of TV ad buyers allotted only 1-5% of their budgets to programmatic, according to WideOrbit. As more networks integrate data and programmatic TV offerings, larger portions of ad budgets will likely be dedicated to PTV.
But there's still uncertainty among ad buyers in the PTV market. The share of respondents who were unsure about how much of their budget would be spent on programmatic TV in 2017 advanced to 23%, a seven-percentage-point increase from 2016, according to a WideOrbit survey. This could mean that buyers see limited appealing offers in the PTV market, and are hesitant to dedicate budgets to programmatic.
Precise targeting is what will drive more PTV adoption. Unlike in digital display advertising, where the promise of programmatic is tied to increased efficiency through automation, PTV’s value proposition is tied to better targeting. Over 55% of TV ad buyers in the US believe that better targeting is the top benefit of programmatic TV, while only 10% believe automation is the top benefit.