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The pandemic and connected TV mean the pool of TV advertisers is more diverse

From left: Thomas Bremond, Verica Djurdjevic and Katie Coteman, with Paola Colombo joining via Zoom link on the big screen
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TV is not only for big advertisers and now has a more diverse advertiser set – and that transition accelerated because of the pandemic, Katie Coteman, Vice President, Advertising and Partnerships at Discovery told The Future of TV Advertising Global in London last month. “Some of the bigger traditional advertisers were pulling away [from TV advertising during the pandemic] so it was a great time to encourage new advertisers to TV.”

New-to-TV advertisers was a key theme in a panel discussion that also spanned the transition to more connected TV and addressable TV, moderated by Thomas Bremond, GM International at the adtech pioneer FreeWheel.

Channel 4 has also welcomed a flow of new advertisers – many of them digital-native brands – since the start of the pandemic, and the broadcaster’s Chief Revenue Officer, Verica Djurdjevic, recalled: “We had to learn and adapt to the digital behaviours and needs of these advertisers. Digital-born brands have an expectation for more flexibility. They expect to come in and out of the market more quickly, and want more flexibility around the audiences they buy, and the TV industry had to adapt.”

Djurdjevic says the new advertisers, with their different sets of questions, spurred innovation. Channel 4 has strengthened its team of programmatic and data specialists, partly in response to this. She added: “As well as flexibility, they want targeting capabilities and these new advertisers are keen to bring their own data to the party, and they then want to see the results linked back to their business, whether they are data matching or buying bespoke [audience] segments.”

Channel 4 has placed an emphasis on making it easy for people to buy VOD and the latest evidence for this came in August, with the addition of All 4 Private Marketplace, which makes All 4 content available via a private programmatic auction that uses automated real-time bidding.

“Programmatic guaranteed speaks more to the medium and larger advertisers who care about long-term planning and traded CPMs and guaranteed impressions, but All 4 Private Marketplace is attracting new money and different advertisers, including people that want to come into the market to take advantage of seasonality and seasonal costs, or who want to put their toe in the water and test VOD,” Djurdjevic reveals.

“We are seeing some promising growth in on-demand [thanks to the new buying option] and, importantly, we are seeing our CPMs holding up there [for sales on the new auction platform].”

Mediaset, the Italian broadcast giant, is also busy embracing what Paola Colombo, General Manager at Publitalia ’80 (the Mediaset sales house) calls the mid- and longer-tail advertisers. “Typically, they have budgets that are important to them but very small by linear [broadcast] TV standards,” she points out. Self-service is one of the keys to helping these advertisers spend their money on TV, Colombo reveals.

Italy is still a strong market for linear broadcast TV, in terms of audiences and advertising investment, and engagement was boosted by lockdowns. It is also one of the strongest HbbTV markets in Europe – providing the basis for interactivity and addressability, including within free-to-air. Publitalia ’80/Mediaset has been a pioneer in these areas and Colombo says the company saw the rewards during the pandemic, as its investment in addressable TV and connected TV were met by accelerated advertiser demand. “Growth in these areas was way above expectations,” she told the Future of TV Advertising audience.

Publitalia ’80/Mediaset is focused on blending broadcast and streaming, and linear and non-linear, and Colombo explained that the introduction of Total Video ratings by the local JIC (albeit for shows rather than advertising campaigns) helps this endeavour. Her company is also working to blend addressable into the wider planning scenario on both linear and non-linear content, and normalise its use. This includes blending addressable into linear ad breaks with competitive and category separation to reflect the traditional broadcast TV advertising experience – something they are doing with the help of FreeWheel.

Simultaneously, Publitalia ’80 is “moving everything into a first party data infrastructure and looking at ways to integrate advertisers so they can plan with their own data on HbbTV channels and CTV,” Colombo explained.

Other highlights from this discussion include:

@Djurdjevic made it clear how Channel 4 believes it has a head-start in the transformation to more streaming and connected TV because of its younger audiences, who prompted them to go there early. The broadcaster introduced its Future4 strategy in late 2020 to accelerate its pivot to digital. She describes Future4 as “a calling card for the whole organisation to shift how we think of ourselves and pivot to digital, giving digital growth priority over linear ratings.” Future4 requires Channel 4 to reassess everything from audience measurement to the content it commissions.

@Coteman confirmed the ongoing collaboration between Discovery and the wider broadcast industry despite its move into direct-to-consumer streaming with discovery+, and she acknowledged the difficulties for studio/channel groups trying to serve both the subscription and free-to-air market via streaming.

In the U.S., discovery+ includes ad-supported and ad-free subscription tiers and, questioned by Bremond, she inferred that ad-support is still an option for Europe. “This [whether to have ads as well as subscription on ‘Plus’ services] is an existential question for all big broadcasters at the moment if they want to reach all cohorts, including whether they have one product to hit everyone or different products.”

@Bremond charactered connected TV as reaching its prime and provided data to demonstrate the rapid growth in connected TV generally and CTV advertising, noting that half of revenue growth will come from what he calls ‘walled garden’ connected TV “like YouTube, Roku and Hulu”.

He also showed a graph demonstrating that in terms of ad revenue in Europe, broadcasters still dominate, and indeed dwarf CTV platforms and CTV-first companies. However, these relatively small revenues for the non-broadcasters are not reflected in market capitalisations, and Bremond believes these CTV-first market-caps are inflated by an expectation that more linear TV inventory is going to become available for targeting, including via connected TV. He declared that there are not enough available dollars of growth to sustain these market-cap expectations without this change.

“This introduces a dynamic where CTV-first players are trying to accelerate the moves to enable linear targeting, and the broadcasters are saying, ‘Hang on. We will get there, but don’t force me [to move faster than I want] because the tools we need are not ready.’ Yes, audiences are shifting but they [the broadcasters] are not going to go there without the right tools and framework.”

Bremond reckons that the right solutions for data-driven, privacy compliant targeted TV will unlock linear for targeting. “The unlocking potential is there,” he emphasised.

More on the advanced TV advertising transformation

The Future of TV Advertising Global took place physically in London in December. The entire event will also be streamed to the world on January 18-19 and then all sessions will made available on-demand. You can register to watch this content (free) here.

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