The European Connected TV (CTV) market has soared in recent years to become one of the hottest topics in our industry. Where the worlds of TV and digital have been gradually merging over time, more and more consumers have been tuning out of traditional Linear TV options and moving into online streaming, paving the way for the CTV phenomenon. In Europe, CTV presents a huge opportunity for advertisers to reach engaged audiences with the right message. But for the CTV market to reach its full potential in Europe scale is key, and for that to happen programmatic CTV needs to be adopted.
In this blog post, we caught up with some of the contributor’s to our Guide to the Programmatic CTV Opportunity in Europe and members of the Programmatic Trading Committee to find out what the status of programmatic trading for CTV across Europe is, what buying options are currently available, and what we need to do to scale CTV programmatically.
What is the status of programmatic trading for CTV across Europe? How does this compare to other regions, like North America and APAC?
“It’s a really exciting time for CTV in Europe. While it’s still relatively early days for the channel, we’re seeing a lot of developments on the broadcaster side and ever-growing numbers of brands and agencies incorporating it to supercharge their campaigns.
North America is naturally further ahead but can provide a great snapshot of what’s to come. A major factor that’s impacted adoption in Europe is that linear TV has been so successful for the established broadcasters that they’ve been resistant to programmatic and the change that it brings. However, we’re really seeing the tide turning on this with many big players beginning to embrace digitalisation.
We expect to see European broadcasters evolve their digital TV offering space in the coming months, aligning increasingly closely with other digital channels. Our recent research found that nearly one in five (19%) of Brits watch more than 16 hours of streaming a week - so it’s understandable broadcasters want to keep pace with consumer appetite. As this happens, advertisers will shift increasingly large proportions of budget to this channel.” Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“According to our latest research, The Future of CTV advertising in Europe, there is a lack of unified definition across the region. During the research, we encountered not only a lack of consistency in what constitutes CTV across different markets, but we also found an array of definitions within markets. For some, it’s any TV connected to the internet. For others, it’s smart TVs, or even on-demand only. And in markets where HbbTV and IPTV are prevalent, there was no consensus on whether those technologies constituted “connected TV”. In one market HbbTV is regarded as connected TV, and in others it isn’t.
In our research, we found a two-speed Europe – large global players with unified content and tech infrastructure are moving relatively quickly, while local players, often with legacy TV businesses, are moving more slowly. Nevertheless, they are actively setting up OTT/CTV operations, though with diverse models and strategies, and in a more incremental fashion.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic
What are the buying options available for CTV programmatically? How is it typically bought and through what deal type?
“All markets are available for CTV buying, but, across Europe, the majority of CTV inventory is bought through Private Marketplaces (PMPs). Broadcasters will typically go for Programmatic guaranteed with some 1-2-1 preferred deals, but this is changing, and more are opening up PMPs. OTT First publishers will tend to offer PMPs as their preferred route to market.” Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“With highly engaged, addressable audiences to reach on CTV, marketers should no longer be looking at programmatic as an afterthought, but as an essential part of their strategy to bring more efficiency and accountability into their media investments. Programmatic technology gives brands the dexterity they need in a changing marketplace. They can stop a campaign almost immediately and have a new one up and running within hours.
Programmatic doesn’t just pertain to the open marketplace. It also means gaining access to private, premium marketplaces and environments that give buyers assurance that their campaigns are running where they want them to. In fact, the majority of CTV transactions occur within curated, private marketplaces, giving buyers greater control as to how they structure deals and more insight into how their ad dollars get spent.
Programmatic makes it much easier for buyers to manage all of their placements and vendors through a single source or deal ID.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic
“The lack of both OpenRTB standards in the open marketplace and a reliable definition of OTT across ad tech platforms has combined with TV publishers’ desire to maintain control over their inventory to produce a closed, deals-based economy when it comes to OTT/CTV.
When it comes to OTT/CTV, deals serve as a proxy for the lack of tech and TV’s traditional direct buying process in three major ways: defining the inventory, providing control, and improving accountability/reporting.
OTT/CTV deals typically take three forms. Private Marketplaces (PMPs): a deals-based method for suppliers to offer ad inventory packages built around audience data, impression attributes, content type, etc., to a group of buyers pre-approved by the publisher. Preferred Deals / Direct Deals: 1:1 deals established between a publisher and a buyer for a fixed-price CPM. And Programmatic Guaranteed Deals: deals established between a publisher and a buyer for a fixed-price CPM that guarantees access (reserved traffic) to a minimum number of impressions for the buyer, and a minimum spend to the publisher.” Adam Noble, Product Marketing Director, Index Exchange
How can a buyer scale CTV programmatically? What types of clients are you seeing have the most success?
“It really depends on what they’re trying to achieve and what the goals of the campaign are. The beauty of CTV is that it offers flexibility and the ability to test so advertisers can really hone campaigns according to their objectives. For instance, if they’re simply trying to maximise reach, they should keep the target audience broad. But if they’re looking for something more response-led, then it makes sense to run a test to find out where their audience is geographically, and on which publishers. What many people don’t appreciate is that it's incredibly cost-effective to run tests, and it will help inform and optimise future campaigns.
There’s no one type of client that CTV works better for - like any digital channel, it has universal benefits and appeal. The key is spending time getting to know how the channel works - with the help of partners - to ensure you’re making the most of it.” Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“With programmatic buying, brands and agencies win access to addressable audiences at scale. For example, buyers can easily go to 30 premium CTV publishers at once, all with the ability to reach their target audience. This is a planning advantage so buyers do not have to buy from many publishers individually like they would have to in a non-programmatic environment.
Programmatic pipes put CTV inventory in one drive, and we’re seeing demand increase across the board. With programmatic’s targeting capabilites, advertisers of all sizes can deliver their messages for optimal impact to engaged viewers. Whether it’s a buyer from a major agency or a small DTC marketer, programmatic CTV opens up access to premium inventory, regardless of budget size. The attraction of the DTC brands or regional brands is something that many agencies are excited about.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic
“This depends heavily on the buyer type, audience criteria, and campaign goals. Large buyers will often broker direct deals with premium suppliers, such as broadcast and cable TV networks, as well as select digital pure-plays with scale and/or gated access to inventory, such as Hulu. In addition to direct deals, buyers of all sizes will tap into private marketplaces established by OTT/CTV SSPs for scale across the broader spectrum of OTT inventory that often includes a substantial portion of FAST and vMVPD supply. Such marketplaces typically take the form of general, run-of-network pools of OTT inventory accessed via a deal ID that is targeted by the buyer’s DSP. These marketplaces are also often verticalised according to the buyer needs, with separate deal IDs for CTV-only inventory, and/or deals based on price point, contextual category, audience segment, etc.
Clients with the most success tend to work across the spectrum of deal access, from direct negotiation with publishers to ensure baseline access to premium supply, and DSP activation of multiple SSP marketplaces to ensure scale for fulfillment and audience targeting.” Adam Noble, Product Marketing Director, Index Exchange
What are the typical targeting methods available and what do you recommend to partners?
“With any advertising activity, understanding the desired outcome is key. We work with our clients to understand what they are looking to achieve - which is often multiple elements, of varying priorities. Then, with the help of our platform, we use these goals as the starting point for the campaign plan. Our advanced AI technology is embedded across the platform and analyses millions of data points to help advertisers ensure their CTV buying is as optimal as possible.
This process encompasses a number of different targeting options from demographic to geography to genre. We also work with partners such as Samsung TV Plus who offer data technology that captures everything happening on the glass and enables a more customised content discovery experience.
The key is to stay flexible. It can be tempting to get a fixed idea about the targeting method to pursue, but one of the benefits of CTV is the ability to evaluate performance and update accordingly - so we encourage advertisers to take advantage of that.” Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“This sounds obvious but the fact that we still tend to target individual users, rather than considering the context of the content, is something that needs to change. The media landscape has evolved, the technology has evolved, and the innovation in the space has really driven new opportunities to leverage the potential of contextual advertising. Thinking contextually creates a number of benefits. Firstly, it ensures accurate content classification, so the brand suitability and targeting are on-point. It's consumer privacy-friendly. It extends reach and allows you to target broader audiences while still allowing for a certain amount of precision in finding audiences at a certain point in their buying journey. Finally, it reduces ad fatigue. The viewer only sees the ad in the right context, so it doesn't feel as though the ad is following them around.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic
“OTT campaigns are often targeted according to basic demographic targets such as age and gender, zip-based location, and interest-based audience segments composed by data management platforms.
True addressability is limited for OTT campaigns given that Connected TVs are cookie-less devices often viewed by a household, rather than one specific individual. As a result, most OTT targeting is done according to HH file and IP address, which works well for targeting basic audience segments from DMPs, but are inadequate for accessing that next layer of targeting and insight, such as who, exactly, is in front of the TV right now. Authenticated audiences built upon publisher networks of first-party data allow SSPs to help increase match rates by enriching the audience signals sent to buyers, however, this data is often hard to scale without the help of identity and graph partnerships, and even then, is challenged by a dynamic of shared logins and inaccurate data associated with IPs and HH files. As a result, contextual signals are often defaulted to in order to help improve targeting for campaign relevancy.” Adam Noble, Product Marketing Director, Index Exchange
How do you measure the success of CTV campaigns?
“Without wishing to sound like a broken record, it really depends what you’re looking to achieve. At The Trade Desk, we work with various partners that can offer our clients different measurement metrics, according to their goals. For example, for reach and frequency – we work with several measurement specialists that can measure the reach and frequency of your campaigns vs. linear and BVOD, clearly demonstrating the added benefits of including CTV. We also work with a specialist company to help track brand uplift. Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“Without a doubt, there needs to be a greater push in the industry around standards for measurement. As an industry, we need to agree on what to measure and how to measure across all platforms. This includes a common set of metrics to compare the performance of OTT to linear TV, especially around reach and frequency.
At the moment we have lots of data sitting in silos, there needs to be a shared approach to measurement that is used consistently across all platforms and channels. This will require a lot of collaboration, which may be tough, but will really help OTT take off, and more importantly, provide advertisers with confidence in this new space.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic
“A majority of OTT campaigns use basic delivery metrics to define success, such as fulfillment, delivery pacing, video completion rates, eCPM, and qualitative reviews of impression delivery by publisher, platform, device, etc. OTT buyers will often seek campaign reach and frequency metrics, as well as brand studies that measure incremental and unique reach compared to linear TV campaigns. While some buyers employ attribution vendors to execute studies related to consumer actions triggered by the campaign, these advanced tactics tend to be reserved for campaigns with large budgets and scale.” Adam Noble, Product Marketing Director, Index Exchange
We know that client adoption of CTV, especially programmatically, is significantly lower than in the US. What do you think needs to happen for Europe (or your specific market) to close the gap and encourage more investment in this exciting emerging channel?
“Europe is far more fragmented than the US, and the technology is different. The market in Europe is also different in that it’s dominated by the broadcasters, so for us to catch up with the US we will need the broadcasters to continue their journey towards a programmatic-first mindset. We have seen a significant amount of progress over the past 12 months, but there’s still plenty of work to do.
Additionally, in the US, there are fewer restrictions on targeting and data. GDPR requires a different approach, but it doesn’t prevent effective targeting. The key thing to understand is it’s not something you go around, instead, you need to work within its boundaries. IDs are a key part of the solution, as they bridge the gap between CTV and other media channels – providing holistic targeting. If broadcasters start to adopt IDs, it will truly unlock the power of CTV.” Patrick Morrell, Director, Inventory Partnerships, The Trade Desk
“In many of the European markets, the education and awareness piece still needs to be worked on. The technology really must work seamlessly and provide the TV-like experience that’s so important to the consumer, the publisher, and the buyer.
While CTV isn’t exactly programmatic yet, it’s worth noting learnings from the rise of digital display ads (which became programmatic). Display went somewhat down a rabbit hole, as the market quickly developed into a contest about who had built the best one-to-one targeting machine. While some publishers and tech players may well have excellent data sets to enable micro-targeting on CTV, it is essential that CTV respects the empirically proven value of linear TV and that it remains the number one platform to build brands and attain cost-effective reach in a high-quality environment.” Hitesh Bhatt, Director, Publisher Development, CTV, EMEA, PubMatic