Jessica Goodfellow
Jun 26, 2019

Industry against the clock in shifting TV investment online

In such a fast-moving media ecosystem, the industry cannot afford to continue to trail behind consumer shifts, warns The Trade Desk.

Industry against the clock in shifting TV investment online

The industry needs to move "super quickly" in moving media investment from waning traditional TV mediums into online, or it will risk opening itself up to "hyper inflation", according to The Trade Desk's SVP of Asia.

Matt Harty believes a total rethink of media investment is needed to take into account consumer viewing changes, but has warned the industry is against the clock.  

"We have been propelled into this [connected TV] so fast, the only thing slowing us down is the way we are adjusting how we think about media investment. We are going to have to think about reframing media investment super quickly because the way we have been investing is arguably open to hyper inflation," he said, speaking at ATS Singapore on Tuesday.

While connected-TV users are estimated to represent more than half (56%) of the US population, ad spend on connected TV in the US was estimated at $8.2 billion in 2018, which is approximately 12% of overall TV ad spend in the year, according to estimates from Tru Optik.

"I’m not saying throw the baby out with the bath water and convert immediately to programmatic everything, but it is clear programmatic everything is going to be our future, so we need to think about how that changes the legacy ways of doing things," Harty added.

Earlier, Mark Britt, founder and chief executive of Malaysian streaming service Iflix, questioned how the industry hadn’t “collapsed in on itself” given the disconnect between ad spend and viewing behaviour.

“We know no one watches [traditional] TV any more, yet free-to-air advertising in Southeast Asia went up 3% again last year,” he said. “I don’t understand how industry hasn’t collapsed in on itself.”

While programmatic TV advertising is on the rise it is still in a nascent stage. In the US, only 5% of TV advertising spend will be traded programmatically in 2019, up from 2.8% in 2018, according to eMarketer.

The Trade Desk has been shovelling investment into growing the capabilities of connected TV advertising over the last few years, to take advantage of changing consumer viewing habits. Its connected TV sales grew more than nine times between 2017 to 2018, founder and chief executive Jeff Green said in the company's earnings report in February.

Yet while it has been an early advocate for programmatic TV, it doesn't want to become the sole dominant force in the medium, believing a 'one size fits all' approach is not what the future of digital advertising will look like.

"As soon as one company runs everything things don’t get done well and innovation is stifled," said Harty. "Different types of tech will suit different companies, and legislation will have some interesting effects on how companies interface with tech. There is a lot of room and I don’t think 'one size fits all' is going to be what the future looks like."

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