SpotX: £220m of connected TV advertising in UK in 2020

SpotX, the video ad serving platform, has conducted research into the connected TV advertising ecosystem in Europe.  Conducted by research and strategy consulting firm MTM, and compiled from interviews and roundtable meetings with experts in each country, the research and resulting white paper analyses the trends, enablers and barriers affecting connected TV advertising spend in each of the big five markets.

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 £115 million 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 OTT advertising landscape grows across Europe, the US and Asia, connected television advertising in the UK is expected to grow to £220 million 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.”

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