European Connected TV Initiative

The European Connected TV Initiative is exploring the potential of connected TV advertising in Europe. This major thought leadership project is sponsored by Google, Roku, Fincons and IPONWEB.

Founded: 2020
More

Skills

Connected TV
Tv Advertising

Sector Experience

Broadcasting
Less

This promoted content is produced by a publishing partner of Open Mic. A paid-for membership product for partners of The Drum to self-publish their news, opinions and insights on thedrum.com - Find out more

CTV in Europe: Opportunities & Challenges - Part 2

by Jon Watts

18 January 2021 18:26pm

Launched in November 2020, the European Connected TV Initiative (ECTVI) is currently focused on exploring the opportunities presented by the growth and development of the connected TV advertising ecosystem in five major European markets: the UK, France, Germany, Italy and the Netherlands. Working with Google, Roku, Fincons Group and IPONWEB and supported by our media partner The Drum, the ECTVI project team is facilitating a wide-ranging dialogue with industry participants and major trade bodies across the market, to assess the opportunities, explore potential barriers, and identify the practical steps that the industry could take to unlock the full potential of the CTV ecosystem in Europe.

Although the new initiative is in its early stages, we have already undertaken an extensive programme of research and analysis, engaging with a wide range of advertisers, agencies, broadcasters, pay-TV platforms, Smart TV manufacturers, and technology, data and measurement providers, to investigate the state of the market and to explores views and perspective on the opportunities and challenges ahead.

Although the new initiative is in its early stages, we have already undertaken an extensive programme of research and analysis, engaging with a wide range of advertisers, agencies, broadcasters, pay-TV platforms, Smart TV manufacturers, and technology, data and measurement providers, to investigate the state of the market and to explores views and perspective on the opportunities and challenges ahead.

In the previous article in this series, we outlined some of the opportunities that the CTV ecosystem is affording in the US market. This article turns to Europe, the focus of our initiative, and outlines the next steps for the European CTV Initiative.

The situation in Europe

Perhaps unsurprisingly, the European CTV ecosystem is very different to the US market, and varies widely, territory by territory. Clearly, Europe’s national TV markets are individually significantly smaller than the US market, with widely varying structures, dynamics, cultures and languages. The CTV ecosystem is developing across Europe, but it is fragmented, by country and by platform or manufacturer, with limited scale in many European geographies. Moreover, high levels of pay-TV penetration in many European markets tends to limit the extent to which CTV’s are being used, further limiting the scale of the CTV opportunity or, at least, making it more difficult to address. Standards like HbbTV are clearly helpful, but major broadcasters in Italy and Germany note that the HbbTV landscape itself is fragmented, with different implementations.

Equally importantly, the supply of premium video inventory, outside of the major TV sales houses, is very limited in most European markets. Europe has its own FASTs, of course, but these tend to be much smaller than their US counterparts, in part because it is hard to scale up across a wide range of different TV markets, given different languages and content preferences. Moreover, the supply of TV content available for licensing in markets like France, Germany and Italy is far smaller than in the US market. Europe’s major commercial broadcasters remain in a relatively strong position and have retained a far larger share of the audience, compared to their US broadcasting peers. As a result, DSPs in Europe currently have far less access to premium video inventory than their US colleagues.

Across Europe, there is also far less of a tradition of networks and channels granting inventory rights to platform operators, and most retain a tight control of their inventory. Most commercial TV sales houses in Europe sell out of the majority of their inventory, and there is far less cheap TV inventory available. Europe’s major broadcasters are investing in programmatic, but most are doing so via their own private marketplaces, and many are sceptical about the value of third-party DSPs and the programmatic supply chain.

Europe does have its own CTV advertising standards, in the form of HbbTV, which supports linear addressable advertising on compatible TV sets. HbbTV is part of DVB broadcasting standard, and provides opportunities to combine broadcast and broadband services. Major TV groups like RTL in Germany and Mediaset in Italy are offering targeted advertising via HbbTV, but the current specification does not support frame-accurate replacement of individual TV ads, limiting its potential.

The HbbTV Association has released a new targeted advertising standard, HbbTV TA, but implementing the new standard in TV sets will require some (limited) investment by manufacturers, who collectively argued via DIGITALEUROPE thatWhere advanced features are being used to generate additional revenues on top of the core DTV offering, then fair and appropriate on-going remuneration, or alternative mutually satisfactory commercial agreements, will be due.” In other words, broadcasters will need to reach some sort of commercial agreement with smart TV manufacturers to support the roll out of the new HbbTV TA standard – and these discussions are at a very early stage, where they are happening at all.

In addition to investments in HbbTV, Europe’s commercial broadcasters are investing heavily to distribute their BVOD streaming services on CTVs, as broadcast TV transitions into multi-platform TV. Increasingly, linear TV and BVOD are being sold together, with BVOD viewing making up for declines in linear viewing. TV audience measurement solutions across Europe have largely been upgraded, to provide better measurement of linear and BVOD together. Some broadcasters are also using their own CTV data to sell against, leveraging registrations, viewing data, device IDs and IP addresses to support targeted advertising.

As a result, many European broadcasters believe that they are already leveraging the full potential of the new connected TV ecosystem to support their advertising offerings. Clearly, there may be other opportunities that could be pursued in theory, but many of these are widely perceived as being either commercially unattractive or too technically complex to pursue.

Next steps for the European Connected TV Initiative

Having completed our initial stage of research, the European CTV Initiative is now moving into its next stage, exploring the opportunities presented by the growth and development of the connected TV ecosystem in five major European TV markets: the UK, France, Germany, Italy and the Netherlands.

In each market, we’ll be facilitating a programme of dialogue and debate with a selection of key industry stakeholders from across the market – buy-side, sell-side, technology providers, intermediaries and trade bodies – to explore the challenges and opportunities ahead, exploring issues such as:

  • The development of CTVs as a mass-market, large-scale platform for addressable TV advertising.
  • The potential value of CTV data in enhancing TV audience measurement in Europe’s TV markets.
  • The role that CTVs can play in bringing new advertisers to TV.
  • The value of DSPs and the programmatic supply chain for CTV inventory.
  • Aligning measurement, reporting and frequency management across TV, BVOD and streaming services on CTVs.
  • The development of win-win commercial relationships between smart TV platform operators, broadcasters and streaming services.
  • The role and future value of HbbTV TA as a standard for addressable TV advertising.

We’re also going to be running some specialist deep-dive seminars, exploring the issues around measurement, rolling out addressable on CTVs, and the development of the TV streaming ecosystem.

If you’d like to get involved in one of the seminars or would like to contribute to the initiative, please do get in touch by emailing jonmarkwatts@gmail.com. Places are strictly reserved for senior industry executives, but we are keen to facilitate an extensive dialogue across the industry – so do please get in touch.

Tags

Google
europe
france
germany
italy
UK
Netherlands
Connected TV
Roku
CTV
HbbTV
Fincons
IPONWEB
BVOD