The WIR: FAST to Make Up 20 Percent of UK AVOD Market, Apple TV+ Makes Key CTV Advertising Hire, ITV Sees Further Linear Declines

Tim Cross 03 March, 2023 

In this week’s Week in Review: FAST is forecast to account for 20 percent of the UK AVOD market, Apple TV+’s new hire suggests further moves in CTV advertising, and ITV linear sales take another hit.

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FAST to Make Up 20 Percent of UK AVOD Market by 2027
FAST will account for nearly 20 percent of the UK’s AVOD market by 2027, according to research published by Omdia and Blue Ant International this week. FAST is forecast to account for around €471 million of the €2.82 billion premium AVOD market, as FAST channel revenue in the UK quadruples over the next four years.

The research noted that UK FAST channel revenue has already increased 180 times between 2019 and 2022, and is now a “weekly habit” for 15 percent of UK viewers. “The updated data highlights FAST as an opportunity for creators to maximise the value of their IP in the UK via windowing strategies that will extend the life and revenue of their productions,” said Lilla Hurst, Global Head of Acquisitions & Partnerships, Blue Ant International.

Apple TV+ Poaches Simulmedia CRO, Suggesting Further Moves into CTV Advertising
Apple TV+ has reportedly hired Lauren Fry, CRO of Simulmedia, a TV ad tech company, suggesting that Apple is becoming increasingly serious about its video and CTV advertising ambitions. Fry’s job title is currently unclear but the exec previously held ad sales roles at AT&T and Comcast. While Apple TV+ does not currently have an ad-supported tier, the company has built an ad sales team in order to run ads during its Major League Soccer and Major League Baseball games.

The fact that Apple have hired an executive from Simulmedia is interesting in its own right, as the company has also been one of the few ad technology vendors preparing the ground for the rise of ad-funded gaming in CTV environments, which is still a nascent market, but potentially a highly lucrative one that could provide access to hard-to-reach audiences on the TV screen.

Digital Drives ITV Revenue Growth as TV Ad Sales Fall
ITV’s revenues were up 7 percent YoY in 2022, reaching £4.435 billion. While the tough ad market saw media and entertainment revenues fall 1 percent, digital revenues rose 18 percent, meaning total ad revenue dropped by 1 percent over the year. The company warned that ad revenue will fall 11 percent in Q1 2023. “The outlook for total advertising revenue is challenging given the current macroeconomic environment,” said ITV CEO Carolyn McCall.

But the broadcaster is becoming less dependent on linear ad revenues, the company said, with digital revenues expected to rise 25 percent in Q1. ITV reported 1.5 million ITVX registrations since the BVOD service launched in December. Total streaming hours were up 9 percent for the year, with “monetisable streaming hours” rising 18 percent. ITV Studios also saw 19 percent revenue growth.

Also this week, ITV won the rights to air 16 Indian Premier League cricket matches as part of a deal with streaming company DAZN. The commercial broadcaster additionally announced a partnership with French media outfit StudioCanal to carry the StudioCanal Presents catalogue on ITVX Premium, the streaming service’s subscription tier. Plus, ITV added architectural tech firm Resi to its Media for Equity portfolio, marking its first investment of 2023. The deal will see the broadcaster invest up to £3 million of ITV and ITVX ad inventory in return for a minority equity stake in Resi.

The Week in Tech

Amazon Dominates Retail Media Ad Spend
Amazon dominated retail ad spend last year, according to MediaRadar, capturing 37 percent of market share. The intelligence firm analysed a sample of $5 billion in retail media campaigns from 2022, covering around 30 retail media networks. The research found that Amazon and general retailers captured 73 percent of the total retail media ad investment in 2022.

“Amazon has such a tight grip on the digital space that they really sit in a category of their own,” said MediaRadar CEO and co-founder Todd Krizelman. “Other players are growing quickly, but it will be difficult for legacy brick and mortar retailers to beat Amazon on its own terrain. Retailers should explore other opportunities to extend retail media – such as in-store digital experiences or other channels like email newsletters, where Amazon doesn’t have as much traction.” Lindell Bennett, CRO of in-store digital retail media network Cooler Screens, added: “Amazon was born from e-commerce, and built its ad business from that, so it’s hard to beat their scale and sophistication in the online space. But 85-90 percent of retail still happens in-store, so I think it’s important that brick-and-mortar recognise their considerable advantage in the in-store environment.”

European Commission Focuses Apple Probe on Spotify Accusations
The European Commission has narrowed its antitrust probe against Apple, the FT reported on Tuesday, alleging that the tech giant restricts apps from offering alternative subscriptions. Spotify, for example, argues that Apple does not let it inform iPhone and iPad users of cheaper ways to access music outside of the App Store. In focusing the probe, the Commission abandons a separate charge accusing Apple of forcing developers to use its own in-app payment system. Apple responded: “The App Store has helped Spotify become the top music streaming service across Europe and we hope the European Commission will end its pursuit of a complaint that has no merit.”

Twitter Cuts Another 200 Staff
Twitter has laid off another 200 employees, representing around 10 percent of its workforce. This marks the latest round of job cuts at the company that has already lost 80 percent of staff since Elon Musk’s takeover in October 2022. The new layoffs impact product managers, data scientists and engineers working on machine learning and site reliability, according to the NYT.

Experian Wins Landmark Direct Marketing Ruling
The UK’s First Tier Tribunal (FTT) has ruled in favour of Experian in its appeal against the Information Commissioner’s Office (ICO). The ICO issued Experian an enforcement notice in 2020, over the credit reporting company’s use of personal data in direct marketing. The FTT found that legitimate interests can be a lawful basis for processing personal data for direct marketing purposes, but Experian was in breach of GDPR for failure to notify a subset of its data subjects. “All in all, this looks like good news for direct marketing,” said the Institute of Practitioners in Advertising (IPA).

Pubmatic Revenues Slide as Video Grows
PubMatic’s revenues fell 2 percent YoY in Q4 2022, totalling $74.3 million, shy of the company’s $75-78 million guidance. Video revenue increased 25 percent YoY however, with ad spend on videos across desktop, mobile and CTV accounting for 34 percent of total revenues. The SSP issued Q1 2023 guidance of $50-52 million, down from $54.6 million in Q1 2022.

Meta’s AI Tool Advantage+ Delivers Results at the Expense of Control
Meta’s AI-powered ad tool Advantage+ is successfully boosting campaigns, according to the FT, though some marketers are concerned about relinquishing control of their campaigns to the tech giant. Marketing agency iProspect has seen Advantage+ deliver returns almost as high as before Apple’s privacy changes. “It’s been very lucrative for us, and we’ve been ramping up,” said iProspect associate director Roberto Mendoza. But three firms expressed concerns, with one UK-based games company saying: “We have now made the active decision not to use the Advantage+ feature due to the amount of control that you have to give up as a marketer.”

CafeMedia Pairs with LiveRamp Data Clean Room
LiveRamp’s Safe Haven has become the preferred data clean room of CafeMedia, the ad sales house for such titles as MacRumors and Thought Catalog. The companies said the partnership enables interoperability, allows marketers to reach a wider audience and raises ad revenues for publishers. “Partnering with CafeMedia to unlock these use cases will help extend marketers’ performance across the open internet while promoting fairness and trust for publishers and consumers,” said Travis Clinger, SVP activations and addressability at LiveRamp. Acquires CoreMedia Systems
Ad tech company has acquired CoreMedia Systems, which provides performance media management software to brands and agencies. The firm said the acquisition helps advertisers buy and analyse linear and CTV campaigns, alongside other forms of programmatic advertising. “The combination of and CoreMedia is as natural as it gets,” said CoreMedia CEO Glenn DeKraker, “with a common independent ad agency base and offerings that now include both linear TV buying, performance, and attribution as well all forms of programmatic including CTV, addressable, mobile, video, display, native, and social.”

YouTube Accused of Collecting Children’s Data
YouTube has been accused of collecting data related to children’s viewing habits, a breach of UK data privacy rules. A complaint filed with the ICO alleges that the Alphabet-owned company is illegitimately gathering data about under-13s viewing on adult accounts, rather than the separate YouTube Kids app. YouTube responded that it treats all kids content as though children are watching it, even on adult accounts.

FLEDGE Gathers Speed but Privacy Sandbox Testing Remains Low
Ad tech firm RTB House has released a second instalment of FLEDGE API testing. FLEDGE is a tool in Google’s Privacy Sandbox combining the Custom Audience API and Ad Selection API, enabling app owners to define and target audiences based on behaviour. RTB House found that the scale of users testing the Privacy Sandbox proposal has increased from its initial tests in October, but remains low compared to cookie-based ad buying. “On the other hand, RTB House has significantly increased the number of our advertisers that have managed to display a FLEDGE-based ad,” said the company. “Over 46 percent of our performance advertisers have done so in January alone.”

DoubleVerify and Samsung Ads Partner for CTV Verification
DoubleVerify (DV) has partnered with Samsung Ads Europe, providing advertisers across Samsung’s Smart TVs with access to DV Video Complete. The tool allows advertisers to monitor and optimise their video and CTV campaigns, measuring whether their ads have the opportunity to be seen by real people in a brand-safe environment. “As a global leader in CTV verification, we recognise that authenticating media quality and strengthening brand protection is essential to maintaining advertiser trust,” said DV Managing Director EMEA Nick Reid.

The Week in TV

TF1 PUB Launches First Retail Data Targeting Campaign
TF1 PUB has added retail data targeting capabilities to its addressable TV offering, as part of a partnership with Infinity Advertising. Along with Publicis-owned agency Spark Foundry, TF1 PUB launched the first campaign of its kind for food retailer BEL Group. The partnership grants advertisers access to retail data from billions of offline and online transactions, TF1 said, matched with 14 million French people eligible for segmented TV. “These campaigns combine the granularity of buyer data with the targeting capabilities of segmented TV, which can be activated on multiple consumer segments,” said Laurent Bliaut, DGA Marketing and R&D, TF1 PUB.

SVOD Revenues to Reach $124 Billion by 2028
Global SVOD revenues will reach $124 billion by 2028, according to Digital TV Research, up from $99 billion in 2022. The US is expected to account for $5 billion of the $25 billion additional revenues, with China gaining an extra $1 billion. Meanwhile Netflix will remain the “SVOD revenue winner” over the next five years as it generates $32 billion, representing more than Disney+, HBO and Paramount+ combined. “This growth comes despite most of the major platforms scaling back their content spend, which makes them less attractive to new subscribers,” said Simon Murray, principal analyst at Digital TV Research. “There is still plenty of growth left in the sector – both from international expansion and as US pay-TV subscribers continue to convert to OTT.”

Paramount Turned Down $3 Billion Offer to Buy Showtime
Paramount turned down an offer to buy its Showtime network for $3 billion, the WSJ reported this week. The offer from former Paramount exec David Nevins, backed by private equity firm General Atlantic, is the latest in a string of bids to buy Showtime, according to insiders. Paramount decided to retain the channel as it seeks cost savings and revenue from folding the streaming service into Paramount+ this year. “We think there’s enormous value to unlock with the integration of Showtime and Paramount+,” Paramount CEO Bob Bakish said last month. 

US Consumers Use an Average of 11 Video Services
US consumers use an average 11.6 video services, TiVo has found, breaching double-figures for the first time since the company started tracking the metric in 2012. This is up from 9.9 in Q2 2022, despite SVOD usage dropping (26.6 percent of respondents cancelled a service in the last six months) with FAST and AVOD driving growth. Adoption of free services is up 70 percent YoY, with 64 percent of consumers now using at least one AVOD or FAST service. This has led to complications for content discovery, according to TiVo, with people mostly relying on ads and word of mouth to guide their viewing. “We’re at an inflection point in the digital entertainment industry as consumers seek to take advantage of the flood of content choices and service types available but now wrestle with the paradox of choice,” said Scott Maddux, VP of global content strategy and business at Xperi. “Discovery shouldn’t be a chore, and it is imperative that entertainment platforms and video technology providers prioritise simplicity for consumers in order to make discovery and viewing experiences as enjoyable as possible.”

RTL Deutschland Sets Up Unit to Invest in Consumer Tech Firms
RTL Deutschland has set up a new unit to invest in consumer tech companies. RTL Ventures will build a portfolio of European firms with growth potential in the DACH market. In return RTL Ventures will give these companies access to its media brands across TV, digital and print. “By launching RTL Ventures, we have the chance to develop a new portfolio at an ideal time in the market,” said Beate Koch, SVP Growth & Investments at RTL Deutschland. “We will invest with a focus on yield, independence and partnership, and will always be there for our entrepreneurs.”

Falls in TV Ad Revenues are Outweighing Growth in Digital for Spanish Broadcasters
Both of Spain’s largest broadcasters, Mediaset España and Atresmedia, have reported falling total revenues for 2022, as growth in digital advertising hasn’t been enough to counter a contraction of Spain’s linear TV advertising market. Mediaset España reported total net revenues for 2022 of €865.3 million, a drop of 1.3 percent year-on-year. Meanwhile Atresmedia’s total net revenues reached €950.8 million, a drop of 1.3 percent. Read the full story on VideoWeek.

The Week for Publishers

Vice Media Shutters French Office Amid CEO Change
Vice Media Group has closed down its French office, French editor Paul Douard revealed in a tweet this week, amid a somewhat turbulent period for the company as it seeks a buyer. The news came as Vice announced its new co-CEOs, Bruce Dixon and Hozefa Lokhandwala, previously chief strategy officer and chief finance officer respectively. The pair replace outgoing CEO Nancy Dubuc, who has held the top job since 2018.

Axel Springer Plans Print Shutdown and US Focus
German publisher Axel Springer CEO Mathias Döpfner said in a note to staff that the company plans to shut down remaining print editions of its publications, including German newspaper Bild, the WSJ reported this week. Döpfner also said the company is planning to focus more on the US market, which will involve opening a new headquarters in New York, and that the company will invest more in AI, which Döpfner said stands to replace some journalists.

Future says its Women’s Lifestyle Brands Aren’t Feeling Ad Downturn
Publishing group Future says its women’s lifestyle publications aren’t feeling the effects of an advertising downturn, Press Gazette reported this week, with the company seeing headroom for growth within the sector. Future has invested in the space recently, buying digital publisher Who What Wear and the licence to publish Marie Claire US last year. “As a category there’s real growth in beauty revenues in the US, both in terms of advertising but also in terms of affiliate revenues,” Sophie Wybrew-Bond, Future’s SVP of lifestyle, knowledge, and news told Press Gazette.

TikTok Places Time Limit on Teen Users
Social video app TikTok has announced a 60 minute daily time limit for users under 18, as it seeks to address concerns around the negative impact it can have on younger users. However users will be able to continue using the app if they enter a passcode, and accounts can opt out of the time limit entirely if they choose. For users under 13, TikTok says parents will have to enter a passcode in order to allow another 30 minutes of usage, once the child has spent more than 60 minutes on the app.

Politico Plans Rapid Expansion of London Bureau
Current affairs publisher Politico has nearly doubled the size of its London bureau over the past month, passing more than thirty staff in total, Press Gazette reported this week. And the business plans further expansion, aiming to reach a headcount above 50 within a year and a half. The paper credits its growth to its focus on a “clearly defined readership”, and the fact that its journalistic and commercial teams have grown side-by-side, according to the Gazette.

Justin Trudeau Hits Out at Google News Blocking in Canada
Canadian Prime Minister Justin Trudeau has called ongoing tests by Google, in which the search giant is blocking news results for some users, a “terrible mistake”. Google began the tests in response to planned legislation in Canada which would force Google to pay publishers in order to share their news articles.

Daily Mail Cuts Print Staff in Digital Drive
DMGT is planning a digital drive to bring the Daily Mail and Mail on Sunday “much closer together”, as the parent company cuts staff across its print titles. “There’s no question that the opportunities for future growth now are digital,” Daily Mail editor Ted Verity told staff in an email. “We face a twin task: to carry on producing the brilliant newspapers and magazines our readers love – while aggressively investing in digital expansion.” The changes follow last year’s announcement that the print edition and Mail Online would share stories and content.

The Week For Agencies

GroupM Launches New Initiative to Drive Investment in News Journalism
GroupM, WPP’s media investment group, this week announced the launch of its Back to News (BTN) Initiative, a programme created in partnership with media support nonprofit Internews which is designed to encourage more investment in quality journalism. The initiative will maintain a curated list of trusted local news sites in over 50 countries, which can be accessed through each market’s BTN inclusion list, private marketplaces (PMPs) or a package of inventory against a biddable price, allowing for more clients to engage.

Dentsu Indicted Over Olympic Bid-Rigging
Following a lengthy investigation, Japanese agency group Dentsu has been indicted by the Tokyo District Public Prosecutors Office for alleged bid-rigging in relation to last year’s Olympic Games. Former Dentsu executive Haruyuki Takahashi, who played a big role in helping award contracts and bring in sponsors relating to the event, is alleged to have accepted bribes and rigged bids during this process. This included taking money from potential sponsors and from venues seeking to host portions of the games.

IPA Sees Improvement in Agency Diversity at C-Suite Level, but Pay Gaps Remain
Industry trade group the IPA has today published its 2022 Agency Census, charting the makeup of the UK’s ad industry, finding that diversity at the C-suite level improved significantly among its members over the course of last year. There is however still plenty of work to be done, with women and employees from non-white backgrounds still significantly underrepresented at senior levels, and gender and ethnicity pay gaps persisting. Read the full story on VideoWeek.

Dentsu UK & Ireland Agrees Client Access Deal with Pinterest
Dentsu UK & Ireland has agreed a deal with social sharing platform Pinterest, The Media Leader reported this week. The deal will give Dentsu clients access to tailored growth plans for the platform, specialist support, and a dedicated measurement steering group with attention measurement business Lumen. Wickes, a client of Dentsu’s Carat UK, is piloting the new programme, which is called Nexus.

The7Stars Wins UK Media Account for People’s Postcode Lottery
UK independent agency the7stars has been awarded UK media buying and planning duties for People’s Postcode Lottery, taking over from Dentsu-owned agency Carat. The account is worth over £66 million in billings, according to Nielsen data.

Media Smart Launches Greenwashing Awareness Campaign
Media Smart, a non-profit media literacy programme, has launched a new campaign designed to help young people better understand and spot greenwashing in advertising and marketing. Media Smart has launched a guide and short film on greenwashing claims, which is being back by a social media campaign.

Hires of the Week

The Guardian Names Imogen Fox Chief Advertising Officer
Guardian News & Media has appointed Imogen Fox as Chief Advertising Officer. Fox joined the Guardian in 2004 as Assistant Fashion Editor, before moving into the commercial department in 2016.

Madhive Appoints CTO Darien Ford
has named Darien Ford its new Chief Technology Officer. Ford previously served as Affirm, after more than five years in software engineering at Capital One.

This Week on VideoWeek

Entries Now Open for European Video Awards 2023, read on VideoWeek.

Falls in TV Ad Revenues are Outweighing Growth in Digital for Spanish Broadcasters, read on VideoWeek.

Could Netflix’s Password Sharing Crackdown Backfire?, read on VideoWeek.

IPA Sees Improvement in Agency Diversity at C-Suite Level, but Pay Gaps Remain, read on VideoWeek.

Twitter Has Never Been a “Must Have” Platform, watch on VideoWeek.

Driving Sales Doesn’t Need to Boost Media Emissions, watch on VideoWeek.

Brand Safety and Belt-Tightening Are Hitting Social Media Ad Revenues, read on VideoWeek.

Ad of the Week

NYF Advertising Awards, “Show Us Something We Haven’t Seen”, BCW


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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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