Emerging market expected to grow at CAGR of 26%
UK expected to generate £220m of connected TV advertising in 2020
LONDON — 8 September, 2017 — SpotX, the video ad serving platform, today unveils research into the connected TV advertising ecosystem in Europe.
The analysis shows that the UK is the largest and most advanced market in Europe with an established connected TV advertising ecosystem. The report concludes 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.
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 (Ofcom). 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 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 and if challenges such as a common currency for audience measurement are met the industry could grow faster.
Commenting on the findings Leon Siotis, Managing Director for the UK and Southern Europe at SpotX explains, “The UK is Europe’s largest ad market, both in terms of TV ad spend and internet advertising spend. 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. We have 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.”
Nick Thomas, Associate Director at MTM, adds, “The UK is the most mature market in Europe for connected TV advertising. Over the past ten years, services such as the BBC’s iPlayer have driven consumer awareness and adoption of on-demand video services and broadband penetration and speeds are high delivering high-quality viewing experience in most homes. Commercial broadcasters have responded with a wide range of well-designed OTT apps creating a robust streaming ecosystem for live and on-demand streamed television that continues to grow.”
Commenting on the research, Paul Gidley, London Business Director of STV Commercial says, “People are consuming more TV than ever before – in fact average viewing time is up by 1 minute compared with a decade ago. And people are watching more TV over the internet, on the big screen. Our live stream works really well for those ‘can’t miss’ events especially reality and sports such as the Scotland v England match we streamed this Summer whereas ‘catch-up’ is popular for people to watch TV at a time that suits them. Connected TV offers a premium environment for advertisers to reach consumers with creative at its most impactful on the big screen.”
Rob Hodgkinson, Chief Operating Officer of TVPlayer adds, “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.”
Siotis concludes, “There is widespread agreement that connected TV is a new class of TV inventory, combining the established value of big-screen engagement with the application of advanced advertising capabilities to measure and target audiences. We have witnessed growth around the world for our clients but the market statistics have not been available until now. We expect the new connected TV ecosystem to grow fast harnessing innovation, creativity and digital techniques to deliver results for viewers, broadcasters and media buyers.”
The white paper, ‘The Opportunity for Connected TV Advertising in Europe,’ available from SpotX, analyses market enablers and barriers to ad revenue growth are detailed for each country in the survey. Growth in the UK is slower than the other countries surveyed by MTM London where nascent markets are fast building connected TV ecosystems. The research reveals growth in excess of 100% on the continent between 2016 and 2020 supported with improving broadband penetration and speeds. Germany was revealed as the second largest market for Connected TV Advertising, followed by France.
SpotX is a video ad serving platform providing media owners with monetisation tools for desktop, mobile and connected devices. The platform features modern ad serving and programmatic infrastructure, and other monetisation tools, like solutions for OTT and outstream video ad units. SpotX gives publishers the control, transparency and actionable insights needed to understand buyer behaviour, manage access and pricing, and maximise revenue. The company is headquartered in Denver, Colorado, and has offices in Amsterdam, Belfast, Hamburg, London, Los Angeles, New York, Paris, San Francisco, Stockholm, Singapore and Sydney. In August 2017, RTL Group, a leader across broadcast, content and digital announce to take full ownership of SpotX after having acquired a 65% stake back in 2014.
Joanna Burton, VP, European Strategy
Tel: +44 20 8068 4444
MTM is an international research and strategy consulting firm, specialising in media, technology and advertising. MTM helps clients in the private, public and not-for-profit sectors around the world understand and respond to digitally-driven change, providing award-winning consumer research, industry analysis, strategic advice, and support for new ventures, business development, and organisational change and transformation. MTM’s approach combines in-depth knowledge of our sectors, a unique combination of skills and capabilities, and wide-ranging engagement with the market. Headquartered in London, MTM is a private company working with clients around the world.
For more information, contact Jon Watts at [email protected]
SpotX commissioned MTM to explore the prospects for connected TV advertising – advertising viewed on a connected TV and delivered via the open internet – in the five largest Western European TV advertising markets: the UK, Germany, France, Italy and Spain.
The research programme consisted of three main stages:
- A review of industry data on connected TVs in the five markets, to establish a baseline of industry data about digital paid-for products and services
- In-depth interviews with senior broadcasting and advertising industry participants, exploring their perspectives on the current state and future developments of connected TV advertising
- A series of executive seminars in June and July 2017, held in London, Munich, Paris, Milan and Madrid. Each seminar was structured around a simple framework to explore industry executive views and develop a group consensus on the prospects for connected TV advertising in each market. All sessions were completed under the Chatham House Rule (no attribution without prior permission).