CTV: Is the UK opportunity for advertisers real?

The rise of the internet enabled TV is bringing existing linear and new digital first advertisers to the CTV ecosystem. Not only is there an abundance of data that was never historically available in linear buys, but the process can now be automated to deliver even further efficiencies to both TV buyer and seller.

The growth of ad-supported streaming is well documented, however, there is still a perception from many in our industry that the UK market is not yet mature enough to support a scaled OTT advertising ecosystem. Several years ago, I would have agreed with this statement, however, in 2020 it is an outdated view and below I want to shed some light on why I feel the UK market is well placed to support advertisers needs when it comes to CTV ad buys today, not tomorrow. 

UK Consumer Behaviour

According to recent research from video AdTech company Unruly, 82% of the UK now have access to CTV content through one or more connected devices and there is a widespread preference for free, ad- supported services.

With consumers looking to dial down the number of paid for subscriptions in the wake of coronavirus, it’s clear AVOD can help by providing an economically attractive solution to access content. 

(Source: Unruly)

The IAB Europe in their recent Guide to Connected TV illustrates well the penetration of smart TVs in UK households and what devices consumers are now engaging AVOD or SVOD streaming services on.

(Source: IAB Europe)

Ok so who is streaming in the UK?

If you look holistically at both ‘SVOD’ and broadcaster video on demand ‘BVOD’, the market in the UK is currently dominated by seven major services: from the five largest “traditional” UK broadcasters (BBC, ITV, Channel 4, Channel 5 and Sky); and the two largest international SVOD platforms, Amazon and Netflix. Each of these services reaches more than 5% of, or just under 1.5m, households in the UK (According to a 2019 report commissioned by Ofcom and carried out by Ampere).

Three newer SVOD market entrants Apple TV+, BritBox and Disney+, that have all been well received by UK streaming viewers but again, increasingly find themselves competing with AVOD services for consumer attention. 

Broadcaster ITV last year said advertisers will be able to target and buy online ads on a joined-up, “end-to-end” basis on ITV’s online video platform, ITV Hub. ITV has also this year named Amobee’s Rhys McLachlan as their director of advanced advertising, a leading role in the development of the broadcaster’s commercial digital strategy. In particular, this will include the development of ITV’s new programmatic TV platform, Planet V (powered by Amobee).

Over 50% of UK households are now subscribed to at least one of Netflix, Amazon Prime Video and Now TV according to BARB figures released in January this year. Netflix is now in 12.35 million UK homes, up from 11.77 million the previous quarter, while Amazon Prime Video reaches 7.14 million homes, up from 6.4 million the previous quarter. 

All three services were up compared to the previous year however, with Amazon Prime the fastest growing at 35%. This was likely due in part to Amazon’s broadcasts of Premier League football games at the end of last year, which Amazon said attracted record sign ups to its service reported Video Ad News.

Digiday reported in August that UK broadcaster Channel 4 will for the first time allow programmatic demand to access its All 4 streaming service on any device, including connected TVs in a fully automated way. Ad agencies can access via DSPs The Trade Desk or Adobe and according to the report, Freewheel will act as the SSP to Channel 4. 

This is another positive sign that traditional linear broadcasters are innovating and enabling advertising to access their audiences in an automated and data driven way via OpenRTB, rather than the manual process of yesteryear linear TV originated from. 

(Source: Rakuten Advertising)

The rise of UK AVOD

Ok, we have seen how linear broadcasters are innovating in an age of CTV, but how are the OTT first streaming Apps increasing their audiences by the day?

Each of these companies below are investing in the UK and European market and have people on the ground locally to support advertiser demand. 

• Pluto 

ViacomCBS owned Pluto launched in the UK in 2018, its first territory outside of the U.S, and has since steadily expanded its channel portfolio, distribution platforms, and content partnerships.

Pluto TV now has 101 special interest channels in the U.K. “Since launching a year and a half ago with only 13 channels in the UK, 100 channels was a first goal to offer viewers a healthy, diverse line-up,” said Olivier Jollet, managing director Europe at Pluto TV to Variety in June.

• Samsung TV+

In an interview with Campaign last year, Alex hole VP Samsung Ads was asked “Why launch Samsung Ads in Europe, and why now?’

“For four years, Samsung Ads has operated in the US, successfully using Samsung’s incredible scale of smart TVs and unique audience platform to bring advertisers new Advanced TV opportunities. With approximately 30 million ads-enabled Samsung Smart TVs across the UK, France, Germany, Italy, Spain and Russia, we were perfectly placed to take advantage of the growing demand for new TV advertising solutions. We’re creating new opportunities for advertisers to use our audience-based solutions and ad experiences to engage their target audiences. We help achieve greater measurability through unparalleled reach and intelligent use of our insights and analytics… “

• Rakuten TV 

Rakuten, a Japanese company, is getting good UK traction with advertisers. 

The company is adding 30 new countries in Europe where the service will operate, bringing the total across the region and Japan to 42 and it has inked a deal with big names in connected TV entertainment systems specifically Samsung, LG, Philips and Hisense — to embed a dedicated “Rakuten TV” button on their remotes. Prime consumer real estate historically locked down by the likes of Netflix. “We are here to continue running the marathon,” Jacinto Roca, the CEO of Rakuten TV, said in an interview. “This is another step for us to become a global player in this industry.” 

Rakuten TV in some ways looks directly like the Japanese ecommerce company’s answer to Amazon’s video service: both have moved into the area as a natural extension of their e-commerce businesses, reported TechCrunch.

• The Roku Channel 

Roku launched in the UK April of this year with their free AVOD offering.

Accessed via the Roku device, NOW TV device, or Sky Q box. In addition, those with a Roku TV, like the Hisense models that were launched in the UK late last year, can also access the free content.

With its roots in streaming boxes, Roku is now a major TV operating system which has seen its overall business accelerate on the back of a robust advertising business that is not dependent on the creation of new content. 

Independent DSP DataXu was acquired back end of last year by Roku (Roku said it will offer buyers access to the Roku ID via DataXu) However, prior to the acquisition it was announced in 2019 that Amazon Publisher Services (APS) had opened up its Fire TV inventory to third-party DSP’s for the first time with integrations with The Trade Desk and DataXu. That said, several months after it was acquired by Roku AdExchanger reported that APS would be removing the access it had granted to DataXu prior illustrating just how competitive the streaming and OTT landscape is in 2020. 

• XITE

Dutch over-the-top (OTT) music video platform XITE has been expanding rapidly over the past year, launching on new platforms in the US and UK and growing from a reach of 20 million households to 120 million households.

“We’ve rolled this out on most of the major platforms in Western Europe and the US. So in the US we’ve launched on Comcast, Samsung, Roku, Amazon Fire TV and Apple TV. And in Europe we’re on the same OTT systems, as well as Sky Q, and several other cable and IPTV platforms in Western Europe” Said XITE’s co-CEO Cees Honig in an interview with Video Ad News. 

To summarise…

Digital TV Research has predicted that global AVOD expenditure will more than double between 2019 and 2025 to reach $53 billion. They forecast the UK will be the 4th biggest AVOD market behind USA, China and Japan. 

This is no surprise to me considering that 5 years ahead of their prediction, the UK already has a number of scaled linear broadcasters, OTT first Apps and smart TV manufacturers supporting data driven CTV advertising for brands looking to engage with cord cutting audiences.  

So please, the next time you hear somebody say “There is no CTV inventory in the UK market that supports ads, please give them a kick!” I have only covered a handful in this overview.

This article was originally published in New Digital Age 16/09/20