Industry perspectives on the growth opportunity for CTV in Europe(FreeWheel Study)

European TV is increasingly digital, with 70% of households in the UK, France, Germany and Italy already connecting their TV set to the internet, according to a recent FreeWheel study in collaboration with independent research company Happydemics. The research found that nine in 10 of these households are using connected TV (CTV) to watch video-on-demand (VOD) content, and CTV users who responded seemed to be largely open to advertising, with almost two-thirds willing to view ads in exchange for free video content.  

To explore the growth opportunity of CTV and ad-supported video-on-demand (AVOD), FreeWheel hosted a Nextv Europe panel featuring Yasmin Andrews, Product and Strategy Director at Matterkind, and Bill Condon, Senior Vice President of Advertising Partnerships at XUMO. As Matterkind is the addressable business unit of IPG, and XUMO is a free live and on-demand streaming provider, the panel delivered unique perspectives from both the buy and sell sides of the CTV equation.  

The opportunity and audience of CTV

With consumer demand growing, Yasmin Andrews explored how media buyers are approaching CTV. Matterkind works across a variety of clients and industries, and all are showing an interest in the channel. With CTV including both niche applications and larger broadcasters, there is inventory available for all brands to align with.

Appetite from buyers increased over the last year, as VOD viewing accelerated and the pandemic necessitated a quick response to changes in consumer behaviour. Many are using programmatic technology to ensure they are as agile and efficient as possible, reaching users in the here and now. According to Yasmin Andrews, overall CTV is becoming a more considered part of the media mix, with buyers exploring how it can deliver incremental reach on top of linear as well as how CTV can be activated alongside other video tactics.

From a content provider perspective, Bill Condon explained how XUMO is seeing incredible growth throughout Europe, with a 50-70% increase in users quarter-over-quarter. This figure reaches 80% in the UK – its fastest growing region – and is slightly slower in more established markets such as Spain, Germany, Italy and France. Users exclusively access Xumo’s platform through partnerships with smart TV manufacturers and are largely using its free ad-supported content to supplement subscription video-on-demand (SVOD) services.    

Key takeaways from CTV campaigns

As IPG’s addressable business unit, Matterkind works with multiple media agencies, and the in-house AV experts within those agencies play a vital role in activating and optimising CTV campaigns. Andrews explained how Matterkind works closely with agency strategists and planners to understand the reasoning behind including CTV on media plans – perhaps to achieve incremental reach or to leverage an environment that’s more suited to the target audience – and to ensure these intentions are realised.

Condon discussed the importance of the user experience and how balancing free content with advertising to achieve a fair value exchange is essential. XUMO has seven to nine minutes of commercial time per hour, which is about half what users would see on traditional TV, so they get a free service without being bombarded by ads.    

He also explored the data aspect of CTV and the current push for data management against a changing regulatory background. Many buyers are bringing their own first-party data and using it to reach the right audience, with the right message at the right time, and XUMO partners with Matterkind to find a buyer’s audience in a specific country across multiple screens. In addition to using data to target by demographic or psychographic, clients are also looking for more traditional buys which are less about specific audience and more about content or genre relevancy.

Inside tips on CTV media buying

As a relatively new format, CTV has a variety of technical nuances that set it apart from online video. Andrews focussed on two key areas buyers need to consider, starting with the creative. While CTV campaigns often run alongside online video, the same creative can’t necessarily be used for both. If video creative has a call-to-action that prompts users to click through to a website, for instance, this will need to be altered for CTV.

Her second pointer concerned frequency capping. Buyers need to manage reach across campaigns but this can be tricky in the DSP if the device identifier isn’t present within the bid request. Talking to SSPs or CTV media owners can help buyers overcome this issue by managing frequency at content provider level.

Condon outlined how media owners are ready and willing to embrace CTV, with its engaging big-screen viewing experience and data-driven targeting capabilities meaning higher ad prices and excellent fill rates. Buyers are pushing for private marketplaces, where they have a one-to-one relationship and can safely leverage their own data, especially at a time when cookies are disappearing. Even though CTV is a new environment, it works on familiar digital technology such as VAST tags, DSPs and SSPs, so the capabilities are already there. As Andrews suggested, buyers need universal reach and frequency to avoid bombarding a user with the same ad.   

CTV challenges and opportunities ahead

The outlook for the European CTV market is strong with huge opportunities for growth, but there are also challenges to overcome. Andrews highlighted one crucial challenge is educating the industry on the breadth of inventory available, and ensuring everyone is aligned on CTV’s definition. CTV is frequently assumed to be just long-tail apps, but in reality it is the environment that houses AVOD, SVOD and broadcaster video-on-demand (BVOD), and the industry must be able to visualise that to improve the way CTV is planned.   

Condon agreed education within the fast-growing but fragmented CTV space is critical. CTV is often seen as a single device, but there are multiple mechanisms, from smart TVs and connected devices to the larger cable companies providing internet access through IP-enabled boxes. Each device has multiple apps and services, so buyers must take a holistic approach to planning and buying to reach CTV’s premium audiences, according to Condon.

Finally, the panellists discussed opportunities and next steps for the CTV ecosystem. Andrews outlined how Matterkind is currently looking into opportunities for cross-channel sequential messaging and bringing CTV into omnichannel optimisations, while Condon reiterated how data-driven targeting will be a huge opportunity for CTV as long as the industry uses data in a smart and privacy compliant way to avoid killing the golden goose. The short session delivered a valuable opportunity for attendees to tap into the panellists’ first-hand knowledge, and the insight shared will be invaluable to the industry as it makes the most of CTV’s vast growth opportunity.   

Tanno Krauß, Director, Head of Demand Sales DACH, FreeWheel