By: Sandro Catanzaro, DataXu Co-Founder
Here Sandro Catanzaro offers his predictions for programmatic TV for 2016. He paints an optimistic picture, noting that historically resistant parties like cable operators and networks will drive volume in addressable TV. He also believes Over-the-Top television (OTT) will become mainstream.
1)Set Top box Cable and Satellite addressability reaches 50% of US HH. With additional cable operators joining and driving volume in the addressable TV market, advertisers can selectively reach a majority of the US households, one by one. This is driven by the savings from avoiding spill-over, achieved by both advertisers and content providers, when trying to reach a specific audience. With no spill-over, advertisers lower their eCPM and content providers better monetize their inventory.
2)Advanced marketers rely on outcomes measurement for over 20% of their TV investments. With marketers experience in outcomes’ driven marketing investment plans, these initiatives gain momentum. Marketers request these metrics for all campaigns where possible, and reap the benefits through incremental sales, and lower risk in marketing investment.
3)Networks pursue advanced television models. Content continues being king, and networks and content owners seek to better monetize their assets by providing more information about the composition of the audiences for their shows and rotations. This information allows marketers to gain efficiency in reaching specific audiences, with complete transparency. Networks realize a significant premium CPM over older “age and gender only” audience classifications.
4)OTT content becomes mainstream. Networks, content owners, cable operators, satellite operators, aggressively pursue an all-screen strategy, where consumers are at the center of a ring of devices to reach them. Screens become interchangeable, which fudges the line between pure broadcast, addressable broadcast, and full IP delivered OTT. Content and distribution owners exercise the flexibility to always deliver in full, at scale. From the consumer side, OTT content becomes easier to acquire, with smaller devices and simpler setup processes.
5)Cable networks test IP delivery in several markets. Cable networks start converting consumers into full IP unicasts, taking advantage of already laid out cable and technology. The process will take overall 5 years, but, during 2016, at least one cable/satellite network tests in one city a full conversion. The successful test drives adoption of the concept to other cities and networks.
Sandro Catanzaro is the kind of technologist and data science virtuoso whose knowledge of business issues shapes the DataXu platform’s ability to gain marketing insights from customer data. Drawing on his business and science background, he co-invented the real-time optimization algorithm at the core of the DataXu platform. Sandro earned two Master’s degrees from MIT – one from the Sloan School of Management, the other from the Department of Aeronautics and Astronautics. Prior to attending MIT, Sandro launched several successful businesses in his native South America, including one that was acquired by Unilever.