Will HbbTV’s Latest Release Fulfil its Addressable Advertising Promise?

28 July, 2021 

Last week, the HbbTV Association launched a second iteration of its targeted advertising specification. The update essentially enabled ad replacement in linear broadcasts in cases where the signal is received by a set-top box, and then passed to an HbbTV-enabled TV via an HDMI – or alternative – connection.

Updates to specifications will rarely grab headlines, but the news was significant. HbbTV (hybrid broadcast broadband TV) has always looked promising as a means to addressable TV advertising on traditional broadcast TV. The release of the HbbTV-TA specification last year, which enabled ad-replacement on smart TVs, started to truly fulfil that promise. And this latest update theoretically completes the puzzle.

“The release of the TA solution for STB markets is a perfect example of how HbbTV adjusts its specifications to the needs of industry players, enabling them to adjust to real market circumstances and grow their business through new revenue sources,” said Vincent Grivet, chair of the HbbTV Association.

Despite the technical progress that’s been made, we’ve still not really seen addressable advertising through HbbTV taking the world by storm. There have been trials of spot replacement in some markets, and HbbTV-enable ‘L-Frame’ ads, where a targeted ad is displayed in a frame around the edge of the screen while broadcast content keeps playing, have gained traction in Germany in particular.

But there are still several factors holding HbbTV back.

Firstly, it’s important to remember that creating standards is one thing, but seeing those standards filter through into consumer devices is another.

The first HbbTV-TA specification was released early last year, but we’re only really now starting to see devices being announced which are built to accommodate it. Just last month, European broadcaster RTL announced it is working with TV set manufacturer TP Vision to collaborate on HbbTV-TA compliant Philips TVs. And that’s just a deal to work on TV sets – it’ll still be a while before these devices come to market.

This issue was outlined in VideoWeek’s research on European CTV advertising earlier this year. Several of those surveyed mentioned that while HbbTV-TA has a lot of potential, as things stand it’s only available on paper, not in practice.

Similarly, this latest specification will now have to go through the drawn out process of filtering through to set-top box manufacturers, and then being released on consumer devices.

And even when the tech is available, broadcasters will want to be certain that the user experience is completely smooth.

Julien Boyreau, TF1’s director of ad tech, said that TF1 has been investing more in HbbTV over the past few years, but said that there have still been issues in delivering seamless and consistent spot replacement advertising.

Boyreau said TF1 was watching the development of HbbTV-TA, and the set-top box component of it, with interest. But until broadcasters and advertisers can be certain of a quality user experience, they’ll be wary of fully committing.

The HbbTV Association itself acknowledged that getting the user experience right is crucial. Indeed, this was a driving motivator behind releasing the TA specification in the first place. In its initial release, the Association said that previous versions of HbbTV had been “good enough to start an [addressable advertising] ecosystem but not good enough to sustain one”. It added that “Some advertisers want a 100 percent guarantee that ad playback will only start if it’s certain that it will play to the end without stalling, buffering, or cutting back to the broadcast ad”.

This process, of demonstrating HbbTV-TA’s effectiveness to advertisers and broadcasters, will also take time.

But another major factor is that while HbbTV is very important in some markets, like Germany, in others it’s taken something of a back seat, certainly in relation to addressable advertising.

Many broadcasters have geared their targeted advertising efforts mostly towards their connected-TV ad inventory. And this can be achieved without HbbTV.

Just this morning, British broadcaster ITV touted the success of its Planet V addressable advertising platform for its video on-demand inventory. And this inventory is becoming more and more important to ITV, with 250 percent growth year-on-year in the number of advertisers who are only buying alongside VOD content.

Ultimately, spot replacement through HbbTV has taken a while to come to fruition, and in the meantime broadcasters have had to look to alternatives.

“European linear standards consortiums have a fatal habit of moving too slowly when it comes to targeted advertising,” says Rafi Cohen, an analyst at Rethink Technology Research. “The opportunity for sizable returns is closing fast as ad revenue jumps ship to more trusted, digital formats, and yet each time new specifications are announced or fleshed out, it seems as though enacting addressable advertising over linear is still out of reach.”

Nonetheless, HbbTV’s strength is that it offers a somewhat unique prospect for broadcasters. While many are focusing addressable efforts on VOD inventory, broadcasters aren’t abandoning their traditional linear broadcasts. Addressable advertising on broadcast streams is still an exciting proposition.

And HbbTV lets broadcasters run addressable campaigns on their linear channels without having to work through telcos, giving them more flexibility and independence in their ad sales. If HbbTV-TA enable tech picks up wide reach in European markets, we may well see a sharp increase in broadcasters’ interest.

2021-07-28T13:29:27+01:00

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