For years there has been legal wrangling in Germany around whether broadcasters should be able to target different TV ads at different regions of the country.
The debate has thrown up tangential questions around what exactly constitutes a TV ad, and what really counts as regional retargeting.
A court decision earlier this month finally settled the issues: broadcasters do have the right to regionally target their TV ads. But the legal back and forth has lasted so long that the decision has become largely irrelevant for some German broadcasters – while still frustrating smaller regional broadcasters.
Targeting from an older era
The law in question was Germany’s Interstate Media Treaty, first created in 1991 and amended in 2015. The law gave German regions the right to block broadcasters from running regionally targeted ads, in order to protect regional broadcasters.
National broadcasters had previously seen an opportunity to run regional ads using the same technology used for broadcasting different shows in different regions (such as when local news is delivered on a national channel).
The law was designed to prevent this, in order to protect regional media businesses. These regional players rely on money from regional advertisers, or national brands running regional campaigns. The fear was that if national broadcasters could run regional ads too, there would be little left for smaller media businesses.
National broadcasters have fought against the law, arguing that they themselves have to compete directly with the tech giants for ad budgets, and the tech giants are able to deliver regionally targeted campaigns.
But while legal challenges have been held up in courts, HbbTV provided a way through.
Regionally targeted ads delivered via cable were restricted by the law – but broadcasters argued that HbbTV ads are digital ads, not TV ads. And courts agreed, since HbbTV overlays sit on top of the broadcast feed, and are delivered separately.
The result was that national broadcasters were able to regionally target ads, but only using specific technologies, creating a somewhat inconsistent system. Questions arose around what exactly counts as a TV ad and what counts as a digital ad, and a somewhat arbitrary divide between cable and HbbTV delivery of ads was created.
Solved too late?
The issue ended up being settled late last year in a case where, somewhat ironically, German broadcaster ProSiebenSat.1 effectively had to use the law to defend itself.
Fashion brand Fussl took ProSieben to court for not fulfilling a contract which required it to show ads on its national channels in Bavaria alone. ProSieben said it wasn’t able to run those ads, since Bavarian law prevented it from doing so.
The issue ended up in the European Court of Justice, which advised Stuttgart’s regional court to strike down the laws, and enable regional targeting on national channels – which the Stuttgart court followed through with in December.
This has finally cleared up any confusion – and some say the impact is significant,
“The ruling does not yet constitute a change in the law, but it does send out a positive signal for regional TV advertising and represents an important step towards creating a level playing field – especially with international online players,” said Paul Mudter COO of Ad Alliance Germany, which sells RTL inventory. “There is already a demand for regional ads on TV, both in the German market generally and for our services specifically. We see significant potential here, including the ability to optimise our product and service portfolio”
But several others VideoWeek spoke with said that the ruling won’t have any significant bearing on their business, or change their advertising practices. Some have simply avoided regional targeting altogether – while others have in a sense moved past it.
A source from one German broadcaster VideoWeek spoke with said that while the new clarity is good, the type of regional targeting which is now allowed isn’t as relevant nowadays anyway. With more granular targeting capabilities via HbbTV, targeting traditional regions is more of a niche use case nowadays.
The law change is still significant – as the ProSieben v Fussl case shows, there is still demand from brands for these capabilities.
But broadcasters will likely rue the fact that the decision didn’t come earlier, where it could have opened up big new opportunities for them. Now, it simply enables them to do something they were already doing, just via a different method of delivery.
