Consumers around the world are rapidly shifting away from their traditional TV packages in favor of advanced TV. But while not all markets are set up for it yet, digital marketers today need to know the differences between the various types of advanced TV available and why it should be part of their clients’ media mix.
Here, The Drum takes a look at what leaders around the world are doing in this space to ready themselves and the world for the future with our who’s who in advanced TV.
AudienceProject is currently focused on growing advanced and addressable TV in the Nordics, the UK, Germany and in Vietnam.
Martyn Bentley, commercial director at the Denmark-based martech firm, says the Nordics is currently the firm’s most advanced market. And while in most markets the standard means of delivery is through apps, he says Finland relies on Hybrid Broadcast Broadband TV (HbbTV).
In addition, all markets in the Nordics allow third-party measurement as they have an established audience currency, which AudienceProject is involved in.
In the UK, Bentley says AudienceProject is growing rapidly in terms of revenues and interest, even though TV is not yet fully programmatic and lacks an industry-agreed currency to trade on.
He laments that, as Project Dovetail by the Broadcasters’ Audience Research Board (Barb) is very delayed, the firm only focuses on content – not ads.
Most cable providers and broadcasters also do not allow other distributors to leverage their original content in the UK.
For example, Channel 4 programmes are only available to watch on the broadcaster’s own catch-up service, thus content available to license is limited. In addition, the content sold by broadcasters is in high demand and usually sold by in-house sales teams via legacy deals with specific advertisers and agencies.
AudienceProject is currently working with advertisers in UK to create a major buying point to help them understand audiences and delivery, and can measure anything that is delivered digitally.
Bentley says that in Germany, which is not an advanced market for AudienceProject but an advanced market in regards to advanced/programmatic TV, it is important to remember that the broadcasters only use HbbTV as a means of delivery, and that there is a joint broadcaster decision not to allow third-party measurement. That means the firm is technically ready to measure, only waiting for broadcasters to grant access.
For Vietnam, which is still in the initial stages of market development, AudienceProject is currently considering whether to take the lead on establishing an audience currency. Bentley says the firm is trying to understand the viability of the delivery infrastructure because scale and market economics are the first things to think about before investing in a new market.
According to Doug Fleming, the head of advanced TV at Disney-owned over-the-top (OTT) platform Hulu, the number of advertisers in the US seeking more data and automation capabilities in their TV buys has increased rapidly. In the last year alone, the platform claims the number of advertisers tapping into its advanced TV offering has grown nine-fold.
“It’s still early days for the industry as a whole. There is an enormous opportunity for the industry, especially once we improve identity standards and measurement. It’s only then that the full value of advanced TV can be realised,” Fleming tells The Drum.
Fleming notes that while it has been a few years since Hulu’s advanced TV offering was launched, it has never done iterating and investing in its offering. This is why Hulu is building a better way to automate all facets of TV advertising and transforming the way brands buy in the living room by offering clients an easy transition into automated buying of television content.
“Hulu’s private marketplace supports three deal types – automated guaranteed, unreserved fixed and invite-only auction – that are supported by a dedicated advanced TV sales force,” he adds.
For programmatic TV to grow, Fleming says partners shouldn’t treat CTV like a desktop environment, which means creative must be built for the television environment versus attempting to repurpose creative build for a desktop or mobile environment.
“The industry as a whole has historically looked to programmatic for efficiency rates, but this is a perspective built on display, not a premium video marketplace. Programmatic strategies in display are vastly different than long-form video, especially when it comes to creative,” he explains.
The Malaysia-based OTT platform was set up to focus on emerging markets in Asia Pacific and is available in a wide variety of languages, including Khmer, Burmese, Arabic, Urdu, Nepali, Bengali and Sinhalese.
Charles Less, the head of regional ad sales at Iflix, says the era of traditional TV is over in emerging markets in APAC as more people have smartphones and data connections, and they have come to expect premium personalised entertainment on their mobile devices, on their time. This means their attention has been commodified.
“Our challenge now is to help transition traditional TV advertisers to ‘the new TV’, like Iflix, that bring together the best of the old like linear channels and live programming, with the best of the new like on-demand programming and data-driven personalisation, to truly deliver in the digital world,” he tells The Drum.
Iflix does this by using streaming intelligence to test innovative new ad products that deliver more effective brand messages to the right audiences. It offers direct and programmatic buying through recognised and trusted platforms, offering contextual targeting and viewability, without compromising the content viewing experience for its audience.
However, Less admits that programmatic technology on streaming services like Iflix is relatively new in emerging markets in APAC and education remains a constant focus for its sales teams in all markets.
“While progressive brands that have already integrated Iflix into their campaigns have been able to drive reach, improve efficiency and engage with the highly-coveted millennial demographic, we still have an opportunity to further educate advertisers and promote transactions across various trading desks and showcase the beauty of the hybrid model between television and digital,” he adds.
The Comcast-owned media conglomerate, which runs National Broadcasting Company (NBC), one of the three largest television networks in the US, says that, in the US, advanced TV advertising and programmatic TV is at a tipping point.
Marketers are expected to spend more than $29bn on programmatic video in 2019, driven largely by programmatic spending on connected TV (CTV) and OTT. Ad supported video on demand (AVOD) services like Hulu and Sling TV are winning over cord-cutters, and Disney+ and Warner Media are soon to launch.
That is why NBCUniversal (NBCU) has been investing in its advanced advertising and programmatic capabilities for almost four years says Denise Colella, the company’s senior vice-president of advanced advertising products and strategy. “Until recently, we had a variety of clients and partners express interest in getting involved, but then were unable to activate due to limitations on their side,” she explains.
“Now, for the first time, we’re hearing from our clients that their teams are up to date, in place and ready to take on this new frontier, so we fully believe advanced TV is about to hit its stride.”
Colella says NBCU works with clients in a variety of ways because some clients, such as direct-to-consumer companies, come to the table with a wealth of their own data and are interested in custom integrations, leveraging not only the broadcaster’s own knowledge but their own capabilities.
For clients who are new to data, Colella explains NBCU wants to work with them and guide them every step of the way by offering both managed and self-service options, as well as a client solutions team integrated across the entire sales force to help meet the demand for advanced solutions in every sector, and ensure NBCU is able to integrate with all the different vendors necessary to serve its clients.
In early 2019, NBCU combined its advanced TV offerings with Sky, its Comcast sibling and Europe’s largest media company by revenue, under one umbrella brand called AdSmart. This allowed NBCU and Sky to create a global premium offerings for clients looking to use advanced capabilities both in the US and in Europe.
“Sky also adopted CFlight, our NBCU cross-platform measurement solution, which has brought us one step closer to attribution,” says Colella.
“We have joined forces with the industry at large, with OpenAP and Project OAR, because we know we all need to work together to make change a reality in our industry. We know that making it easier for clients to adopt advanced advertising will help grow the industry and make advertising smarter.”
On the challenges that NBCU is facing with advanced TV, Colella says, is that truly addressable linear TV is going to change the entire TV ecosystem forever when it becomes a reality on a large scale in the US, and NBCU is working with Sky to learn from its experience in this area.
In addition, with attribution becoming a bigger and bigger focus, NBCU looks at CFlight as the first step in its journey to getting there.
“Education still remains a crucial element of this process. This is why we’ve joined initiatives like OpenAP to help make advanced advertising more accessible to the larger community. There are more data sources than ever before, and we are constantly working to integrate new ones and help validate to ensure our clients are using the best data points.”
The OTT streaming platform sees tremendous growth in North America, Australia and UK because of maturity of the market and adoption of OTT as an essential, if not the main way to obtain content.
Youssef Ben-Youssef, the head of ad platform at Roku, tells The Drum that it is working hard to help traditional TV advertisers and agency decision-makers understand the value of OTT through measurement and targeting solutions.
“We offer a seamless execution of OTT buys through direct and programmatic channels. We help further evangelise our audience-based offerings to help advertisers reach the right audience and ensure a better platform user experience overall,” he explains.
“As a platform, we aim to help publishers and advertisers have the right tools to transact premium OTT inventory at scale and in a seamless fashion. We provide both with a slew of unique solutions to help them see the differentiation in our platform. These solutions range from measurement, data licensing, inventory protection etc.”
Youssef notes that other regions are still in adoption phases, but says it is inevitable that these other regions will follow suit as soon as the three signs of a mature market are reunited – hardware adoption, availability of premium content and seamless monetisation of ad inventory.
“Our strategy as a leading streaming platform is to provide a comprehensive solution to help drive broad adoption of Roku powered TVs in key markets while also working with global and local content providers to provide the best premium content to customers in these markets,” he says.
“We also provide inventory monetisation and acquisition solutions. Programmatic is a big strategic part of our growing platform.”
The Luxembourg-based digital media giant is heavily involved in the advanced and programmatic space through RTL AdConnect, which acts as it international ad sales house to offer advertisers a new “total video” proposition across TV and digital, and SpotX, its video adtech platform.
Stephane Coruble, the managing director at RTL AdConnect, tells The Drum the main challenge around programmatic TV, especially in Europe, is adoption by the market. This is because each TV market in Europe is very different and the economics of supply and demand vary a lot.
For example, in Germany which is very advanced in addressable TV, the next step for the group will be cross-device targeting in the households. In France, the group is more in a test phase.
“A big question is: how do you align all communication and data transfer between all parties? To consolidate linear TV, addressable TV and CTV, the market would need a cross-device and cross-technology solution,” he says.
“The industry is working towards a common set of standards to encourage faster adoption of data-driven TV advertising to scale.”
To change the situation, Coruble suggest that the broadcasters will have to find a consensus to create a global or national market place with all their inventories.
For example, there needs to be industry initiatives like the alliance between RTL Group, RTL Deutschland Mediengruppe and Pro7Sat1, where the objective is to build between those two media families an offering and a booking engine for clients.
The idea is to bring simplification to advertisers, with a wider addressable TV product and offer that would be available through one single contact.
“Addressable TV and data-driven TV products are still at the starting point, all markets are not mature yet, the demand is still quite limited, but there are a lot of hopes for this kind of solutions in the future. Brands are interested in everything that will facilitate their access to TV and video advertising,” he explains.
“We’re going towards more and more convergence of digital with TV. This leads to a growing demand for cross-screen advertising solutions allowing advertisers to access holistic buying and selling processes across different media. The advertisers want more simplification, but also more transparency. At RTL AdConnect we are working towards this with our video marketplace, to be able to provide advertisers a global video inventory through a one-stop shop.”
Gavin Buxton, the managing director for APAC at SpotX, notes that regional leaders in the advanced and programmatic space like Hooq, Iflix and Viu, have all now adopted freemium models supported by the launch of ad placements, with free-to-air being the historic main access point.
“Consumers in the region are more price sensitive to pure subscription models but also understand the value exchange with ad-supported content,” he tells The Drum.
“South East Asia is seeing huge growth in video screen time, which is being led by mobile screens as the primary access point. Smart TVs and connected boxes are additionally on the rise, but it is taking time for legacy connected boxes and TVs to be replaced by digitally enabled versions that allow for digital ad enablement.”
“For Asia, with consumer trends being mobile-led, our preference on this is returning back to OTT definition – being premium broadcast (delivery, linear, live, VOD) across all screens (mobile, desktop, CTV) outside the legacy/traditional broadcast delivery. Programmatic TV is then the ability to target consumers within OTT environments.”
According to the video management platform, Asia Pacific, Australia and New Zealand have seen advanced TV take off due to investments in broadcast video on demand (BVOD) by the region’s largest broadcasters. That means CTVs are the primary platform where audiences watch BVOD content.
In Australia, Telaria is currently working with all of the country’s major broadcasters and in 2018 partnered with Seven Network to make live premium sports video supply directly available to programmatic buyers.
Kevin Smyth, general manager for South East Asia at Telaria, says live sports programs are considered one of the last barriers to cutting the cord but that, with live TV now available on OTT, cordless viewing is at an all-time high.
“We enabled programmatic advertisers to access OTT ad spots for the Australian Open, the 2018 Winter Olympics in PyeongChang and the Gold Coast 2018 Commonwealth Games. The Australian Open partnership resulted in 256% year-over-year revenue growth around the event,” he explains.
“Essential to our success is the emphasis we put on quality and transparency across our platform. In addition to being the only video monetisation platform certified by a big four consulting firm to be 100% fee transparent, we provide brands and agencies with bidding insights to inform them that auctions are operating in a fair, clean and transparent manner.”
He adds: “We also work with MRC accredited, third-party verification partners including White Ops and Pixalate to ensure buyers are protected from fraudulent inventory. All of these steps are necessary to build buyer trust and to propel the programmatic TV ecosystem forward.”
The platform has also seen CTV requests in South East Asia increased 657% year-over-year in the first quarter of 2019, in line with an IAB study which indicated a 466% increase in CTV content streams between October 2018 and January 2016.
“Demand for CTV and OTT in South East Asia is growing rapidly and in the last year we’ve become the preferred video management platform for Malaysia’s Astro, Vietnam’s FPT Television and Thailand’s True Digital, and we expect that we will continue to work with high-quality broadcasters,” explains Smyth.
Smyth highlights that Latin America is a promising region for advanced TV, with Brazil leading the way as the third-largest TV market in the world. He says subscription video on demand (SVOD) will remain the region’s largest OTT revenue source, contributing $4.42bn by 2023 according to the Latin America OTT TV and Video Forecasts report.
However, he points to a Telaria study that found Brazilian consumers have high ad receptivity and 63% feel ads are a fair value exchange for streaming TV content, suggesting that programmatic TV has room to grow.
“Education is crucial for programmatic advanced TV buying to achieve scale. A couple of years ago we launched Connected TV University, which covers advanced TV research, usage trends, buying strategies and optimisation lessons to help advertisers better understand the nuances of advanced TV advertising. We have since brought the program to over a thousand buyers across agencies, DSPs and brands in five countries to bridge the knowledge gap and show buyers how advanced TV advertising is within reach,” he explains.
“Marketers are going to follow the consumer, and it’s clear that the trend towards OTT and CTV is inexorable. Building a programmatic infrastructure to address that market is the natural next step. Once marketers dip their toes into programmatic CTV and OTT, we’re going to see spend take off. Just look at how CTV accounted for 1% of political ad buys on our platform in 2016 and then last year comprised 30% of political ad buys on our platform. That’s the kind of exponential growth we are going to see in markets where advanced TV hasn’t yet taken root.”
The Trade Desk
Bihao Pan, the director of inventory partnerships for South East Asia at The Trade Desk, tells The Drum that in Thailand, advanced and programmatic TV is growing fast as there are plenty of OTT video streaming companies similar to Netflix.
However, they differentiate themselves on content like Thai dramas, movies, Asian content, western content. TV stations meanwhile are big on BVOD.
“In Vietnam, we have started work with FPT’s pay-tv product, and then quickly expanded. In the Philippines, there are more than 20 TV stations but ABS-CBN and GMA Network are the main players. ABS-CBN leads the TV space by a huge margin and sells its OTT supply programmatically,” he explains.
“In Singapore, Singtel is the main CTV player, while in Indonesia, Emtek and MNC Group have the largest TV portfolio between them. OTT Video players there have a head start over the traditional pay TV vendor. For India, Hotstar, Voot, Zee5 and Sony Liv dominate the scene.”
For China, Viu TV and TVB’s myTV Super are the main players in Hong Kong. The latter’s set-top-box has already achieved over 50% market penetration. In nearby Taiwan, iQiyi Taiwan and LiTV and LineTV are active, with iQiyi Taiwan taking the lion share of premium VOD market.
Mainland China, meanwhile, has the most contested markets in the region due to its large number of video viewers, with Baidu’s iQiyi, Tencent Video and Alibaba’s Youku fighting for a slice of the pie. Nearly 229 million people in the country will use a subscription OTT video service this year.
The Trade Desk is currently working with iQiyi and Youku as part of a partnership to give access to inventory across display, mobile, video and native advertising. In Hong Kong, it is working with myTVSuper.
According to The Trade Desk, partnership is key for main players in Japan. TVer is a joint venture across Japan’s top five TV stations, Fuji TV, TV Asahi, TBS, Nippon TV Network and TV Tokyo, while AbemaTV is partnered with TV Asahi and Cyberagent. In South Korea, Oksusu (owned by SK Broadband) and Pooq is a joint venture across major local broadcasters MBC, SBS and KBS.
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