CTV in EMEA: The Disruption Begins

24 November, 2021 

While CTV adoption from audiences, buyers, and sellers in the US has been rapid, the EMEA region has faced a number of substantial hurdles which have slowed development.

But we are seeing real change, as broadcasters across EMEA place more emphasis on their streaming products and roll out new programmatic tools for CTV inventory. And at the same time the ad-supported US services are making their way across the Atlantic, trying to crack the EMEA market.

How will the CTV landscape in EMEA change over the next five years? In this sponsored piece Hitesh Bhatt, director of publisher development for CTV in EMEA at PubMatic, rolls out what to expect from broadcasters, buyers, and ad tech companies in the years ahead.

CTV in EMEA – The Disruption Begins

The US leads the way when it comes to connected TV (CTV), which has become extremely popular with consumers and advertisers alike. In EMEA the CTV revolution has definitely started but viewership and ad spend are not yet at the levels we see in the US. Over the next five years there will be numerous developments that will influence the pace of growth of CTV from both a consumer and advertiser perspective.

CTV: a consumer perspective

Up to now, rates of ‘cord cutting’ across Europe are relatively low compared to the US, with consumers remaining loyal to paid-for TV services such as Sky and Virgin Media and free to air TV channels. There are two main reasons for this: firstly, European consumers perceive paid-for services as good value for money, and secondly, no European market yet has an equivalent to the US’s Hulu, with ad opportunities around premium content from multiple major networks.

Over the past 12 months things have started to change across many facets of the CTV landscape spurring an acceleration of consumer adoption. We are seeing huge growth from pureplay OTT players such as Pluto TV and Rakuten; traditional broadcasters are increasingly pushing AVOD services such as Paramount+ and Discovery+; and the growth of FAST (Free Ad Supported TV) platforms such as Samsung TV+ has enabled a raft of specialist and niche channels to launch, catering for a hugely diverse range of audiences.

CTV viewing figures will only continue to grow as people discover these new content services and platforms via smart TVs and OTT devices. In the next two years CTV content will likely be as much of a feature in consumers viewing habits as paid-for and free-to-air TV content.

In addition, the battle of the CTV platforms should only increase the quality and choice of content available. We believe we have only seen the beginning of investment in content from behemoths such as Amazon, Apple, Google and the TV OEMs. Their deep pockets will fund an increasing amount of content as they look to compete for eyeballs.

CTV: a media buyer perspective

TV ad buying and selling is steeped in tradition: trading deals and upfronts, measuring share of audience, and heavily incentivised BVOD ‘top-ups’ to mitigate for drops in linear viewing figures. As a result, many buyers see CTV as BVOD and YouTube, leaving swathes of audiences on the table.

In Europe, having watched the CTV landscape unfold in the US, media buyers are primed for change and ready to let go of historic buying practices. It’s likely that in the next 12 months all big brand media plans will feature both linear and OTT/CTV. In addition, there may also be new entrants to TV advertising in the form of direct to consumer, local, and niche brands for whom CTV offers an affordable access point.

What changes can we expect to see in the next 12 months?

For CTV to reach full throttle there are a number of barriers that need to be addressed. The fragmentation and diversity of CTV content distribution and ad trading means that, as of now, the industry is without a common measurement standard. The US has tended to solve this with individual businesses such as Nielsen leading the way, whereas Europe tends to lean on independent organisations and JICs (Joint Industry Committees) such as BARB and UKOM to oversee measurement standards. Who will take ownership of CTV measurement is still up in the air, but at some point, somebody will need to step up.

The fragmented CTV landscape presents another challenge – how to effectively buy advertising across a plethora of walled gardens as well as open marketplaces, across multiple markets. Solving this challenge will need more than collaboration (although of course that will be critical) and will require advertising technology platforms built specifically for CTV. These platforms need to enable CTV buyers to access custom, multi-publisher, multi-channel, and multi-national marketplaces in order for CTV to scale.

The ability to combine the audiences of multiple CTV publishers, large and small, will enable brands to find incremental reach in a far more cost-effective manner than buying more ratings on linear TV or BVOD, or trading with dozens of CTV businesses directly.

Broadcasters, streaming platforms and TV OEMs all sit on vast, unique datasets held within walled gardens that enable them to provide brands with unique insights, measure reach, and manage frequency. However, from a brand perspective this presents a challenge when looking to scale CTV as it means there is no single point of truth. Supply-side platforms (SSPs) provide a common infrastructure to share data in a controlled, privacy-compliant manner which mitigates against the challenges raised by these walled gardens.

Furthermore, the wider adoption of SSPs will make the CTV buy-side more transparent across all channels and provide the cross-channel reporting that brands demand in order to measure performance across the media mix. Add to this the ability to offer a portfolio of identity options that enables advertisers to test different strategies and find the unified, omni-channel ID that works best for them, and the SSP has a huge role to play in fostering the effective, fair growth of CTV.

It is likely that, as has happened in other areas that have been disrupted by technology and changing behaviour, change will be slow at first and then shift quite suddenly to a new “normal”. The winners will be those businesses that have anticipated the change and set themselves up for this new world.

2021-11-24T16:17:40+01:00

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