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AOL Shows TV in Transition in Programmatic Advertising Report

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"Television is absolutely going through a revolution," said Dan Ackerman at a breakfast meeting held today in AOL's New York City headquarters.

Ackerman is the senior vice president of programmatic TV for Adap.tv (which is owned by AOL), and the subject of the meeting was a report issued this morning called "Finding the Needle in the Haystack: A Programmatic TV Primer." The report looks at how TV viewing is changing, and that, in turn, is driving ad changes.

TV now represents $70 billion in yearly ad spending in the U.S., and the average home watches nearly 150 hours of TV each month. "It dominates the American home for video viewing," Ackerman said.

Despite that, TV is going through a transition: There's so much choice nowadays that viewership is fragmented. Last year, TV viewing by 18- to 49-year-olds declined by 10 percent. "This is having a material impact on the television economy," Ackerman noted, adding that viewers have changed how they watch video, and now it's time for advertising to catch up.

Viewership changes include declining audiences, increasing ad loads to make up for lost revenue, and the rise of 15-second ads, which now comprise 40 percent of the ad load. As a result, viewers are seeing more ads and more messages, diluting overall ad impact.

To meet this challenge, 60 percent of brands will apply programmatic techniques to broadcast TV by 2016, Ackerman said, bringing automation and targeting to the process of TV ad buying.

"At AOL, we have invested heavily in this area, launching One by AOL TV earlier this year, giving advertisers more audience insight and the ability to shift marketing investments to the most effective tactics in real time," Ackerman said via email. "This level of optimization translates into more effective and sophisticated TV targeting, and enables marketers to tie their efforts to actual business outcomes."

View the full programmatic TV report for free (registration required).

Dan Ackerman

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