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Growth of addressable TV during the pandemic

Mobile was once the rising star of the video world, but lockdown has changed that

TV viewing across Europe has hit new heights during the lockdowns of the past 16 months as families crowd around their TV sets for must-watch shows. The renaissance of the living room during the pandemic has boosted broadcast and subscription services and alerted brands to new ways of approaching television advertising.

At the same time, lockdowns have ramped up online activities and the living room has become the most connected hub in the house, used for working, learning, shopping, exercising, gaming and Zoom calls, as well as being an entertainment space.

Mobile was once the rising star of the video world as people viewed their social media feeds and subscription channels on the tiny screen as and when they liked on the move. The lockdowns have changed that. During the past year, the dominant screen was not mobile, but the internet-connected TV (CTV).

The use of CTV surged during the pandemic. RTL AdConnect forecasts that non-linear video consumption on CTV and OTT will rise by 22 minutes to 63 minutes daily this year, compared to mobile screens’ five-minute rise to 62 minutes [1].

In Europe, connected TVs are taking over. On average half of homes in the European Union have an internet-connected TV. Meanwhile, TV and internet are converging in other ways, such as plugging the laptop into the TV set. Figures [2] show that internet users accessing the internet through a TV set at least once a month hit 42.5% last year.

This blending of TV and internet opens up a world of fluid content that blurs the lines between platforms, broadcast and video, but it also creates a level of fragmentation that is difficult for viewers and advertisers to manage.

The old certainties of TV have been shattered, so reaching audiences across Europe has become a complicated picture for international advertisers. With consumers accessing so many devices and platforms, working out the effectiveness and role that each of them plays in the media plan across several markets is not an easy task. Finding a standard measure of success across video, mobile, broadcast and social media is much needed.

What is particularly fruitful for international advertisers is combining the two big trends of our times – increased TV viewing and greater use of digital. That’s why addressable TV advertising, which uses geographical and socio-demographic data to target TV ads at specific households, has become one of the hottest topics in media today.

This granular, highly-targeted form of advertising offers the reach, high attention and viewability rates of TV, along with TV’s premium content and the brand-safe environment expected of regulated broadcasters. At the same time, it blends these benefits with the best of digital – the targeting capabilities, flexibility and simple, automated buying systems.

It also opens up a world of interactive advertising and opportunities to target ads across different devices within one household. With the explosion of platforms, channels and social media sites, it is comforting to know that the big screen in the corner of the living room is where some of the best action is to be found for brands.

Addressable advertising offers advertisers a level of control they have never had before, allowing them to use the reach and brand-building capabilities of TV while also being able to sprinkle some of the magic of personalization on top. Brands can tweak the audience strategy and add more nuance to the media plan. For brands with smaller budgets, addressable TV ads allow them to test the waters on the big screen in the living room and do more local and regional targeting.

The broadcast ecosystems in many European nations are going through considerable upheaval as stations seek to deal with the fragmentation caused by the growth of addressable advertising, CTV and the confluence of digital and broadcast.

In France, for instance, a merger is under way between M6 and TF1 to create a single platform. There are similar conversations going on in other European markets as broadcasters try to figure out how to improve access to their content for viewers and advertisers.

Over the next 18 months to two years, these mergers and partnerships will speed up. Traditional broadcasters have held dominant positions in their home markets, and some believe they have been slow to keep up with the transformation of the video landscape triggered by the digital revolution. That said, broadcasters have invested in digital transformation over the past five years with the development of video-on-demand (VOD) platforms, ATV and investments in content to compete with global digital players.

The situation is moving ahead rapidly, partly stoked by the impact of lockdowns on TV viewing. The growth of Over The Top (OTT) services, broadcaster hubs and CTV means TV is taking the lion’s share of viewing. So much for the mobile revolution.

The next two years will be key for European broadcasters as they merge, combine and enter into strategic partnerships. This period will shape the future of broadcasting and the opportunities open to advertisers across Europe.

[1] Source: eMarketer, 2021 forecast from January 2021, individuals 18+

[2] Source: eMarketer, February 2021, individuals accessing internet through a TV set at least once a month

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