The Future of CTV Advertising in Europe

Post on March 17, 2021 by PubMatic


With consumers across Europe spending more and more time watching connected TV (CTV), brands, agencies, and content providers are stepping up their game when it comes to understanding the key drivers of success. With CTV ad spend currently lagging behind consumer engagement, now is the time for the industry to come together to define the future of CTV advertising.

To help drive the conversation, we recently kicked off our 2021 PubAcademy Europe series with an in-depth look at what’s driving the market, how to overcome current inhibitors, and what the future holds for CTV advertising in Europe.

The culture around media trading, innovation budgets, and competition levels are typically the key factors in determining the pace of evolution in technology-driven advertising. Daniel Knapp, Chief Economist at IAB Europe, commented on the difference between key European markets: “The UK is the most advanced due to higher consumer consumption of CTV and similarities with the US.” Germany is slightly behind the UK but has “an extremely strong sell-side and broadcasters are already collaborating to accelerate growth.” He said that in Spain “industry groups are very active in shaping the market in a consistent way” and that there is an “unprecedented level of collaboration between Italian broadcasters.”

What are the key drivers of CTV in Europe?

While CTV content consumption is driving the growth of advertising, our panel of experts identified several other key pieces of the puzzle.

Applying data to CTV advertising comes naturally due to its similarities to digital. This gives CTV some advantages over linear TV, such as in the ability to target specific audience segments, reducing the cost of advertising and opening up the market to new-to-TV brands.

CTV gives brands the opportunity to continue to reach people who have moved away from broadcast TV and make up the loss of reach on a screen that has proved time and time again to drive action.

Programmatic and cross-channel platforms – although still in the early stages of development – are playing a vital role in accelerating CTV advertising. For buyers, programmatic makes scaling CTV advertising easier compared to traditional buying methods. Furthermore, buying CTV and other digital advertising together enables buyers to adopt a holistic approach and optimize their media mix for maximum ROI from digital overall.

What are the current inhibitors?

Establishing unbiased, independent, scalable identity solutions that solve for privacy and regulatory compliance requirements is proving to be somewhat difficult in CTV. This is largely because of the hybrid nature of CTV but also due to the fragmentation of the space which makes it hard to establish common practices.

With CTV in its infancy there are also teething problems with measurement and expectations. Because CTV is so similar to TV and also digital it sometimes proves difficult to align performance metrics to campaign goals. This can lead to unrealistic expectations, especially if assumptions are made that CTV will perform like digital, or perform like linear TV. A move towards a blended view is needed to overcome this.

In markets where CTV penetration is low it’s hard for CTV players to compete with other digital channels and linear TV as the scale is not there for the buy-side to justify significant investment. This will naturally be overcome as more consumers move to CTV, but in the meantime both the buy- and sell-sides are working to establish common standards. Collaboration should make CTV advertising more measurable and addressable, helping foment a boom in ad spend.

What is the future of CTV?

Our panelists shared a few ideas on the future of CTV advertising, including:

  1. The expectation of holistic reach and frequency across all screens, with addressability achieved using universal IDs that consumers opt-in to — with a fair, understood value exchange for doing so.
  2. The coming of unified measurement of digital, CTV, and linear TV, resulting in an optimal cross-screen advertising opportunity and consumer experience.
  3. The arrival of CTV specialists who understand all video channels and operate in teams that are inclusive of specialists in all other channels. Teams that are willing to create and test robust hypothesis and prove the value of CTV for others.
  4. The simplification of the technology landscape in CTV, with unified approaches prevailing through collaboration and standardization.

Listen to the recording here to hear the discussion and the answers to our live audience questions.