In association with Captify.
In this Q&A written exclusively for ExchangeWire, Steve Pereira, president of UK at Captify, discusses the growth of AVOD, BVOD, and SVOD in the UK, the challenges facing the advanced TV market, and the impact of new privacy regulations on marketers, broadcasters, and providers.
How will the balance between AVOD, BVOD, and SVOD subscription growth in the UK change over the next 1-3 years? How will this compare to other European markets?
AVOD has been growing rapidly and I don’t see that slowing down. Put simply, if you’re not considering AVOD as a media owner, you’re missing out not only on a major advertising revenue stream, but potential subscription revenue from premium offerings.
The spectacular rise of subscription services (SVOD) isn’t news to anyone. However, it does feel like this train has finally started to slow. I would expect to see these services take a bigger hit in 2022 as the market matures and more players saturate it.
Meanwhile, BVOD is seeing a trend towards content consolidation, particularly through platforms and services like Britbox. This will only continue as broadcasters and studios see the benefits of directly engaging consumers, and viewers look to amalgamate their profiles and access points. These aggregators will look to scale their audiences, implement direct-to-consumer billing, and offer hardware formats. Amazon is a fine example of this.
The big challenge the UK is facing is that, outside of the national broadcasters, the scale just isn’t there. By contrast, many of the European markets have a plethora of local broadcasters, many of whom are looking to monetise their inventory. I expect the big US players who have a direct-to-consumer approach (the likes of Disney, Apple, and HBO) to continue to march on and increase their market share in Europe.
What opportunities does identifier deprecation across display and mobile environments offer to UK marketers looking to invest in advanced TV? What benefits will viewers see?
The big inhibitor of identifier deprecation is the inability to connect the audience dots between different environments. This has led to the emergence of next-generation contextual offerings that are powered by intent-rich data sets, such as search, to inform marketers’ advertising strategies. The exciting opportunity here is that marketers will be able to activate these offerings in one of the fastest-growing markets: advanced TV.
With so many options accessible to audiences, competition for viewers' eyes is undoubtedly fierce. The evolution of these solutions will actually empower brands to personalise their broadcast buys, bringing a deeper level of targeting and greater relevance that hasn’t been available until now. This will, in turn, maximise the viewing experience for consumers.
The players who can combine the storytelling impact of TV with the relevance of digital— while also protecting consumer privacy— will be the ones that win big.
What are the key challenges currently facing the advanced TV market in the UK, and how can these be overcome?
First and foremost, targetability, with ID deprecation adding even more fuel to the fire. The existing data powering advanced TV strategies are limited to standard segments and lacking in recency, meaning advertisers may be getting eyeballs on ads, but there is a good chance they aren’t being seen by the right audiences. Bringing smarter, contextual solutions to advanced TV environments will empower advertisers to uncover highly-qualified audiences across all screens, in a privacy-compliant way.
Another long-standing challenge is the ability to define standardised metrics for measurement. Right now, every platform has its own approach to how they measure success. Platform partners who offer a consolidated view across multiple screens are likely to gain a competitive advantage here.
Price is another pressing factor. Advanced TV is not always cost-effective, especially when compared to alternatives. Brands like Apple, Disney, Amazon, Sky, etc., are all coming to this realisation. As they continue to pull back the curtain, I can see them benefiting from a direct-to-consumer approach, where they can engage with audiences across many products and services— not just content.
How will privacy compliance continue to be upheld within UK CTV? How will this be affected by potential divergence from current GDPR regulations, as well as efforts to replicate the upcoming digital services act?
The biggest challenge the UK CTV landscape will tackle over the next few months is finding a way to streamline consent across CTV platforms. There are plenty of innovative solutions in-market for collecting consent, but it's going to take time for the industry to find one that truly works, while also protecting consumer privacy.
The industry can also expect to see tighter regulations imposed within CTV environments. In particular, new legislation, such as the proposed Digital Services Act, will put greater emphasis on protecting children. This has already happened, with the UK Government banning TV and online advertising for food products high in fat, sugar, and salt (HFSS), which aims to prevent brands from promoting unhealthy products to children.
How is the relationship between marketers, broadcasters & CTV publishers, and advanced TV technology providers evolving?
The major players on both the content and tech sides are beginning to collaborate more effectively on the future of TV monetisation, measurement, and audience. Based on learnings from the online marketplace evolution between buyers and sellers, they’re keen to avoid replicating some of the challenges that ultimately ceded market share to big tech firms.
Being able to identify audience content consumption across the entire viewing funnel will require broadcasters and ad-supported CTV providers to work with standardised tech partners. Together, they’ll need to contribute important data points for the new methods of TV currency and, ultimately, measurement.
Marketers are keen to activate on shows, screens, and across audiences, which is a massive shift from the current show-based buying strategies of the past 50 years. Tech platforms will be on the road to buying this way, but the incumbent digital market owners are currently sitting on the sidelines with little impact on the market.