As linear TV continues to decline in both viewership and advertising revenue, broadcasters are looking to move the dial by investing in ad products for their streaming services. For UK broadcaster Channel 4, that transformation is well underway, with digital ad sales making up 30 percent of total revenues in 2024 – a target the commercially funded public service broadcaster hit one year ahead of schedule. Like many European broadcasters, Channel 4 is aiming to expand its pool of advertisers, and has been busy opening its programmatic pipes to drive more spending into its BVOD service.
The broadcaster now works with four demand-side platforms (DSP), having added Adform and StackAdapt in the last nine months, alongside existing integrations with The Trade Desk and DV360. Alex Wright, Programmatic & Data Leader at Channel 4, tells VideoWeek the company’s choice of DSP partners are primarily shaped by their ability to support private marketplaces (PMP), which not only generate higher yield in auctions, but also offer advertisers a level of control that “did not exist” in the era of long-term spending commitments for TV buys. Wright says this flexibility and lack of minimum spend requirements is proving particularly useful in attracting small and medium-sized enterprises (SME).
That doesn’t mean every DSP partner has to offer a PMP option. DV 360 for example does not facilitate Channel 4’s PMP, but remains a valuable partner due to being “probably the first DSP that most advertisers in the world use.” And the broadcaster takes other factors into consideration, such as new types of advertisers the DSP can bring to the table. StackAdapt for instance specialises in SMEs, which Wright says is helping to attract spend from universities looking to reach young viewers on Channel 4’s streaming service.
But there are also technical considerations in the selection of DSP partners. As a UK broadcaster, all ads on Channel 4 require Clearcast approval. Clearcast provides approved creative with a unique clock number that has to be uploaded into the DSP when the campaign is set up, a process that requires additional development work in the initial stages of integration. “It’s essential that DSP partners are open to doing this additional dev work in their platform to allow that clock number to be adjusted,” says Wright.
No half measures
At the same time, Clearcast requirements are helping Channel 4 maintain creative quality while adopting SME-friendly AI tools, according to the broadcaster. In July the company announced the launch of GenAI ads on its streaming service, in partnership with tech firms Telana and Streamr.AI. The move enables new-to-TV advertisers to quickly generate and run ad campaigns using assets from their website and social channels. But rather than flooding the streaming service with low-quality AI content, Channel 4 says human oversight and Clearcast guidelines are working to control creative quality.
“Channel 4 has taken deliberate steps to ensure that TV ads produced with GenAI meet high creative and regulatory standards,” says Sean Griffin, Senior Commercial Product Development Lead (Streaming, Social & Programmatic) at Channel 4. “All AI-generated ads are reviewed and edited by Channel 4’s creative teams, ensuring that human oversight remains central to the process. Ads are vetted for compliance with Clearcast guidelines and Channel 4’s own ethical standards.”
The company is also developing measurement products that better serve SME advertisers, who are looking to prove their TV spend is worth the investment by measuring outcomes. In October the broadcaster launched Attribute, a product that uses IP cross-matching to see whether a viewer exposed to a campaign on Channel 4 streaming proceeds to visit an advertiser’s website or app within a specific attribution window. “It’s all delivered to the advertiser in a self-serve dashboard that they log into,” explains Alex Wright. “So this is really attractive to SMEs who are used to getting that real-time outcome measurement in the digital world.”
And while the work to drive SME spend remains in its early stages, Wright says the strategy is already having an impact on ad revenues. “We’re already seeing the conversion of brands who previously would not or could not spend with us, because we didn’t have the type of measurement that they needed to justify the spend – especially from independents, and from our nations and regions offices as well.”
Filling the gaps
Channel 4 is also investing in new data and targeting products, including building out its postcode sector targeting capabilities, which Wright says is proving particularly useful for nationwide retailers. “We have clients that come to us when they have high stock levels or low stock levels in different areas of the country, or where they have drivers and they don’t have drivers,” comments Wright. “They can apply that business data they have on their side, and overlay it to postcode, and then target on Channel 4.”
Meanwhile the expansion of Channel 4’s retail data offering is driving spend from CPG brands, according to Wright. The broadcaster now has data partnerships with Tesco, Nectar360 and Boots, enabling CPG brands to target Channel 4 viewers that they know shop in their category. The broadcaster can then measure whether viewers who saw the ad bought the advertised product or another product from the brand. And while the company is exploring other verticals beyond CPG, such as auto and travel, Wright notes the importance of only pursuing data partnerships “that fill a gap in our offering.”
She uses Channel 4’s relationship with audience data business Acxiom as an example of a partnership helping the broadaster to “answer a lot of briefs and respond to a lot of clients’ needs.” The offering includes a product called Approved, which provides third-party data targeting segments based on characteristics such as home ownership and life stage. And in October, the company rolled out Approved Transactional, using transaction data from Acxiom to build out customer segments. “The vertical we’re seeing respond the most to this is definitely travel,” says Wright. “That’s quite interesting for us, because when we see people engage with our third-party segments, it helps us to decide what we’re going to push further on with a bigger partnership.”
And looking ahead, Channel 4 is developing more interactive and measurable ad formats, with a focus on self-serve products to further assist newer advertisers. Wright notes that Pause Ads have helped brands start advertising on TV without the need for video, adapting their display formats and including QR codes as a call to action that is also measurable. But running those campaigns can also add complexity for advertisers reusing QR codes across multiple ads, or having to create unique variations in order to track performance. “Sometimes those kinds of formats that are measurable and have high impact can require some heavy lifting,” remarks Wright. “We definitely want to make it a lot more efficient, quick turnaround, a lot more self-serve than in the past.”
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