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By Jessica Goodfellow, Media Reporter

August 30, 2017 | 3 min read

Europe's largest broadcaster RTL Group has announced it will take full ownership of video outfit SpotX, as it looks to adtech to diversify its revenue amid a "challenging" TV ad market.

RTL Group today (August 30) announced its latest quarterly results, with group revenue up 8.8% year-over-year in the second quarter, and 3.5% in the first half of the year. Its leadership cited "challenging" developments in advertising markets across its footprint, which includes 10 countries across Europe – a "clear signal" to accelerate its strategy execution.

This strategy includes taking full ownership of SpotX, having bought 65% of the adtech company in 2014 for $144m, in what is just the latest M&A episode in the adtech sector.

Bert Habets and Guillaume de Posch, co-chief executive officers at RTL Group, said in a joint statement that they plan to roll out the SpotX offering across its operations in close collaboration with its SmartClip entity. In a video statement to investors, they also hinted at potential adtech acquisitions in the future (see above).

Commenting on the deal, SpotX chief executive Mike Shehan said it will help the video adtech specialist, which has been doubling down on addressable TV services since the earlier RTL investment, extend its footprint in the sector.

He added: "SpotX is emerging as the premier expert in digital monetization of OTT content delivery, and uniquely positioned to assist broadcasters and other modern TV players with maximizing their profitability in the new delivery ecosystem."

TV advertising now accounts for less than half (48.7%) of RTL Group's revenue, while 17.5% comes from content, 13.1% from digital activities, 5.3 % from platform revenue, 4.1% from radio advertising and 11.3% from other revenue.

The broadcast group has been implementing a diversification strategy over the past five years, shifting emphasis from TV ad revenue towards other revenue streams amid a declining TV advertising market.

This has included partnering with traditional rivals, plus online players such as its German operation Mediengruppe RTL Deutschland forming a "Log-in Alliance" with fellow broadcaster ProSiebenSat1, and online ad sales house United Internet to create a unified registration and login service for consumers.

Similarly, its French broadcasting operation Groupe M6 has teamed up with several domestic partners to form Gravity, an alliance that lets advertisers access diverse data segments and execute programmatic digital campaigns in all formats.

RTL's shift in strategy mirrors that of UK broadcaster ITV, which under the leadership of Adam Crozier plans to launch an addressable TV solution in 2018.

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