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Scale and growth of connected TV advertising revealed

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New research has revealed the scale of opportunity for connected TV advertising in Europe, with “widespread agreement” across the entire market that connected TV is a new class of inventory, combining the established value of big-screen engagement with the application of advanced advertising capabilities to measure and target audiences.

The analysis, produced by video ad serving platform SpotX in partnership with research firm MTM, shows that the UK is the largest and most advanced market in Europe with an established connected TV advertising ecosystem, and shows that £115m of advertising was viewed on a TV connected to the open internet via streaming devices, smart TVs, games consoles and set-top boxes in 2016.

As the Over-The-Top (OTT) advertising landscape grows across Europe, the US and Asia, connected television advertising in the UK is expected to grow to £220m in 2020.

The research, compiled from interviews and meetings with experts in different countries, also analyses the trends, enablers and barriers affecting connected TV advertising spend in each of the big five markets.

Factors such as advertiser demand for connected television, consumer viewing habits and Internet access and availability were analysed by MTM for each country. Leading broadcasters and industry experts interviewed for the research predicted that in 2020, 75 per cent of UK households will connect their TVs to the Internet, up from two-thirds in 2016.

91 per cent of households have fixed broadband connections, 91 per cent of which offer speeds of over 4 Mbps, which is more than suitable for watching TV delivered over the internet.

Awareness and adoption of connected TV is deemed “high” and creating connected television apps was marked as one of the top three priorities for the broadcasters questioned for the research in the UK. If challenges such as a common currency for audience measurement are met the industry could grow faster.

“The UK is Europe’s largest market, both in terms of TV ad spend and Internet advertising spend,” said Leon Siotis, Managing Director for the UK and Southern Europe at SpotX.

“We see increasing demand from advertisers seeking advertising in a big screen environment served and measured using digital techniques, with some agencies creating new business units to focus on the opportunity.

“Media owners and broadcasters such as ITV, STV and TVPlayer are generating additional revenue streams this way, addressing agency requirements to target viewers of premium programmes at scale.”

Siotis added that SpotX has seen “significant” growth across Europe and expect this to grow rapidly over the next few years as more agencies and advertisers benefit from advertising on connected TVs, as part of the growing OTT landscape.

Commenting on the research, Rob Hodgkinson, Chief Operating Officer of TVPlayer said: “We’ve seen a step change in consumers watching TV over the Internet on big screen this year.

“Both live streamed and catch-up TV are popular, and work well for advertisers and agencies with added targeting and advanced advertising capabilities.”

This story first appeared in our sister publication, Mediatel Newsline

The white paper, ‘The Opportunity for Connected TV Advertising in Europe,’ is available from SpotX.

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