Insights

Advanced TV confidence is soaring across Europe, but greater clarity is needed

Virginie Dremeaux Executive Director, Product and Sales Marketing International

Expectations are high for 2021 as momentum builds behind Advanced TV advertising and strong growth is forecast across multiple European markets.

An overwhelming 84% of marketers surveyed expect to increase advanced TV advertising spend over the next 12 months, according to a FreeWheel and CoLab survey of marketers in the UK, Italy, Germany, France and Spain. This trend juxtaposes predictions on general marketing budgets, which only 40% of marketers surveyed expect to grow or stay the same.

But within the Advanced TV ecosystem the picture isn’t entirely uniform. The channel includes a variety of advertising solutions and platforms, such as video-on-demand (VOD), connected TV (CTV), audience-based linear, programmatic and addressable TV, and year-on-year growth forecasts are different for each solution. VOD, for instance, is expected to grow 19%, while spend on addressable TV is only forecast to increase 9%; possibly because addressable TV maturity varies by geographical market. Expectations also vary between advertisers and agencies, with advertisers surveyed being generally more confident about the growth of Advanced TV. Finally, there are significant differences between countries, with Italy the most positive and the UK the most cautious.

Let’s take a deeper dive into the survey’s results and explore different perceptions amongst the marketers surveyed of the purpose of Advanced TV advertising, as well as the drivers and obstacles influencing adoption of this channel.

 

The role of Advanced TV in the customer journey

When deciding which marketing objectives are currently most important for surveyed marketers, responses illustrate a relatively good balance between upper and lower funnel goals, even in the current climate where a short-term approach could be favoured. The top two responses are upper-funnel objectives of “acquiring new customers” and “growing revenue”, and these are followed closely by two lower-funnel objectives of “increasing customer loyalty” and “retaining existing customers”.

But when asked which types of Advanced TV will help them meet their objectives, the European marketers surveyed have different expectations for each solution. VOD and CTV are seen as upper-funnel channels, with both cited as driving customer acquisition. On the other hand, programmatic TV is perceived to drive the lower-funnel KPIs of short-term objectives and ROI.

The view varies between agencies and advertisers, who don’t entirely agree on expected outcomes. Agencies surveyed are more likely to emphasise the upper-funnel purposes of Advanced TV, whereas advertisers surveyed are more likely to focus on lower-funnel goals. For instance, both these advertisers and agencies believe CTV is effective at driving revenue growth, but the agencies also expect it to achieve long-term objectives, while the advertisers think it should be used to drive ROI.

The perceived objectives of different Advanced TV types also vary by country. As an example, VOD is seen overall by the marketers in Italy, Germany and Spain as most effective for the upper-funnel task of acquiring new customers. But the French marketers prioritised VOD for CPM efficiency, which is a lower-funnel goal.

If the scaled reach, quality content and strong engagement offered by traditional TV is clear, the variation in views between these advertisers and agencies, as well as across different European markets, indicates that a more detailed understanding of the purposes of Advanced TV is still required.

 

Drivers of Advanced TV growth

The top three reasons respondents give for spending more on Advanced TV advertising are that it maximises campaign efficiency, that it delivers better consumer data at individual not household level, and that it provides an opportunity to manage frequency of exposure to TV campaigns. In addition, over half of marketers surveyed also recognise other key drivers such as extending the reach of traditional TV, cross-screen targeting opportunities, reaching new audiences, and higher ad effectiveness.

The perceived benefits vary slightly from an advertiser or agency point of view. While these advertisers see campaign efficiency and effectiveness as the key factors that will drive ad spend growth, agencies are more sold on the idea of individual targeting and frequency management.

Interestingly, the top driver of Advanced TV advertising growth is also different for each market. In Italy campaign efficiency is seen by marketers as the main driver, while in Germany, marketers see the greatest benefit as reaching new audiences. UK respondents indicated that they will spend more on Advanced TV advertising because it allows them to manage ad frequency, while their French counterparts will do the same to extend the reach of traditional campaigns. Finally, marketers surveyed in Spain see improved data at individual level as the main driver of Advanced TV advertising. One thing is clear; Advanced TV advertising has a great number of benefits.

 

Inhibitors to Advanced TV advertising spend

Across all respondents, the top two inhibitors to Advanced TV advertising relate to measurement, with a lack of accurate tools for measuring both audiences and campaign effectiveness. This indicates robust measurement solutions and standards for Advanced TV could soon be a top priority across the industry. Other inhibitors are a perceived difficulty in managing Advanced and linear TV campaigns at the same time, and a lack of awareness about what Advanced TV actually is.

Within individual countries the same obstacles are broadly recognised. The only real exception is the UK, where cost is seen as prohibitive to Advanced TV adoption. The key difference between advertisers and agencies surveyed, is that the advertisers feel there is a lack of inventory supply to meet demand, and that this is holding Advanced TV back.

While the outlook for Advanced TV advertising across Europe is remarkable, paving the way for a year of strong growth, greater clarity in the industry about the benefits of Advanced TV advertising would make the most of this momentum.  Differences in the way marketers use Advanced TV to meet their objectives cut across both roles and markets, and there are varying perceptions around drivers and inhibitors that could be addressed to allow Advanced TV to fulfil its potential during the year ahead.

 

Methodology

500 marketing decision makers in Italy, the UK, France, Germany and Spain were surveyed between 19th September 2020 and 5th October 2020. Respondents were comprised of 38% advertisers and 46% agencies, with the remainder comprised of media owners or others.

If you are interested in survey’s results and want to find out more, feel free to contact us!