While real-time bidding is a common feature in most programmatic ad transactions, it is typically not deployed in programmatic TV, which allows broadcasters to decide how they want to package their inventory.

There were initial concerns among broadcasters in Asia-Pacific that programmatic could commoditise inventory, acknowledges Nick Chuah, chief commercial officer of AsiaMX, which just launched its programmatic TV ad exchange. RTB had driven down prices in the digital media industry and there were fears it could do the same in the TV realm.

In this Q&A with ExchangeWire, Chuah explains that broadcasters can still control how they price their inventory to deliver better yield through programmatic TV, which simply offers a more efficient way to monetise their inventory.

ExchangeWire: There seems to be some confusion about what programmatic TV really means. Can you clear up the ambiguity?

Nick Chuah: Programmatic describes the use of software to automate the buying and selling of advertising space. It is important to note that programmatic TV does not involve real-time bidding (RTB), although RTB is usually a key feature in programmatic advertising in general.

Some people associate programmatic TV with all video media, while others go further to lump connected TVs and video streaming apps into the mix. AsiaMX focuses on addressing all advertising assets of TV companies, across linear TV, online video, and mobile. Today, we deliver programmatic technology to the TV business to unlock value from first-look inventory and bring trading and workflow efficiency to the marketplace.

Why do you choose to focus on first-look rather than unsold inventory?

Advertisements sold by a media owner's direct salesforce are deemed as 'first window'. 'First-look' inventory, which is what AsiaMX deals in, is deemed as 'second window'. It refers to a media owner's unsold premium inventory that is made available to a limited, privileged set of buyers before the rest of the market. This protects the rates and retains the value of the premium inventory.

In digital, the common practice is to make remnant or unsold inventory available on the open market at a low price, which is akin to a fire sale. AsiaMX doesn't practise that.

How is your programmatic TV ad exchange different from others in the market?

We understand how TV advertising is bought and sold. We have mined the best practices and studied the lessons garnered from programmatic digital advertising. Our offering is designed to bring the two worlds together and deliver a seamless, automated experience for buyers and sellers of television, online video, and mobile advertising.

On an operational level, we adapt to the broadcaster's existing workflow with minimal disruption. This allows us to bring them on board almost immediately. Our strategy is to complement their salesforce without compromising their existing high-value deals.

Nick Chuah

While there has been some hype around programmatic TV over the past couple of years, it hasn't really taken off in a big way. Why do you think that's so?

It's all about timing. Programmatic was first applied to digital, followed by online video, and now TV. The industry is still in its nascent stage. With sustained attention and the realisation that innovation is key to progress, TV companies and advertisers are now more open to programmatic. The time is ripe for programmatic TV to get the airtime it deserves.

ABC's vice president of programmatic Mike Dean said programmatic TV "requires an evolution of the business model" between pay TV providers and programmers and changes between sellers and buyers; and this isn't easy to achieve. Would you agree with this assessment?

Automation brings change. The word 'automation' became widely used when General Motors established in 1947 an automation department. Since then, the introduction of automation to many industries has heralded all kinds of change, including workflow, mindset, and behaviour. An important factor is the rate of change. It has to be sustainable.

With automation, TV companies are relieved of some of the more routine responsibilities, such as handling spot buys, and can better focus resources on selling higher-value products. Such products include sponsorships, branded content, and tailored, high-impact marketing campaigns. TV companies also can focus on managing high-touch relationships with advertisers.

Singapore-based telco, and pay TV operator, StarHub, highlighted the complex setup and lack of transparency as key challenges related to programmatic TV. How should these issues be resolved?

A widely-accepted and robust trading currency for audience-measurement is one of the key pillars to a thriving advertising industry. To address this, AsiaMX has partnered with audience-search agencies to establish such a trading currency that will benefit media owners, agencies, and advertisers. The trading currency will bring about more transparency and accountability. We selectively work with leading and reputable TV networks, whose inventory is measured and accountable.

As for setup, we let the software take care of all the heavy lifting.

How different is cross-device attribution on TV from other media platforms?

TV audience measurement is inherently different from digital audience measurement. It is probability-based. Research firms are constantly developing smarter ways to interpret TV data and project audience measurement and, in turn, offer better cross-device attribution. We partner with audience measurement agencies to provide the trading currency.

What are some key concerns broadcasters have about programmatic TV? Are you seeing any fears among broadcasters in Asia-Pacific that going the programmatic route could lead to a commoditisation of their inventory?

Broadcasters are initially concerned about whether programmatic may commoditise and devalue their inventory. We witnessed in digital how RTB generally drove prices down, because it was introduced in an environment where supply is greater than demand.

In our approach, media owners dictate the price. We are not about to introduce any auction-based pricing models. We work with broadcasters to package inventory and deliver a more favourable yield.

Programmatic TV pairs inventory with better targeting to magnify the value of the inventory.

In markets where there are strict regulations regarding content, how can broadcasters ensure ads running on their platform are compliant if these are processed programmatically?

On the technical side, we work with content delivery service Adstream to ensure that TVCs submitted comply with broadcasters' technical requirements. To ensure content compliance, broadcasters have the right to accept or decline bookings.

What advice would you offer broadcasters looking to build a programmatic strategy? What are some key issues they should keep in mind?

Broadcasters intending to build a programmatic strategy have to think about:

— Rebalancing their rates: in some markets, TV rates are below that of online video.

— Reorganising their inventory: in many cases, TV inventory is rarely sold out. Programmatic offers an opportunity to unlock the value in first-look inventory.

— Educating and/or reorganising their sales teams: programmatic complements their business, not cannibalises it. Sales representative need not fret about losing their jobs; but sales teams need to restrategise and focus on selling higher-value products.