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CTV Growth Sparks Strategic Interest in Digital Advertising Among European Network Service Providers and Pay TV Operators

By: PRLog

PERTH, Australia - Nov. 3, 2022 - PRLog -- Momentum behind digital advertising in Europe is rapidly gathering steam, as consumers warm up to personalized and engaging experiences emerging as a consequence of better interest matching, improved navigation and innovative recommendation engines. As the presence of connected TVs (CTV) expands, more executive attention is being paid to the opportunity by network service providers and pay TV operators interested in developing critical new sources of revenue that will transform the competitive landscape throughout the region.

These were among the key conclusions of a recent media and analyst roundtable on the state of digital advertising in Europe that featured a range of executives representing different segments of the rapidly evolving advertising ecosystem. The roundtable was hosted by Hoppr, an innovative Australia-based advertising technology (AdTech) company.

User Acceptance of CTV Advertising Drives New Strategic Initiatives

According to a study released by the ShowHeroes Group in 2022, an overwhelming segment of European consumers is expressing a strong preference for digital advertising experiences delivered through CTV, compared to web-based and conventional linear TV advertising. It is driving a significant increase in ad attention. The study cites an 82% attention rate for CTV ads versus 69% for linear TV and 42% for social video. During CTV ad breaks, the study further found that viewers were likely to be in the "engagement zone" an impressive 71% of the time.

These research findings are just the latest additions to the growing body of evidence demonstrating digital TV advertising growth in Europe, noted Cyril Daoud, chief executive officer of Hoppr.

"Conventional advertising -- on TV specifically -- has always been a disruptive experience for consumers. For every hour of programming consumers sit down to enjoy, they experience between six and ten minutes of ads that are typically of little relevance or interest to the viewer. It is not an ideal experience for the consumer. Nor is it a particularly effective way for advertisers to connect with their target audiences. It is especially true given the alternatives that digital advertising strategies offer via CTV and other platforms," he said.

Network Service Providers and Pay TV Executives Paying Attention

It is an opportunity that is capturing the attention of pay TV operators and NSPs. New customer expectations, increasingly digitized experiences and services, and the rise of new technologies -- like artificial intelligence -- have fundamentally changed consumers' behavior and spending habits across Europe. The most dramatic manifestation of these changes is reflected by the readiness of customers to shop around and switch operators to find the best services at the lowest costs in the fiercely competitive European market.

The net result has been a significant struggle for service providers to hang on to customers while holding the line on average revenue per user (ARPU) -- which has been under constant pressure for the past decade.

To address this challenge, a growing number of industry executives are investing in developing highly personalized experiences that simultaneously improve engagement and loyalty.

"Network service providers and pay TV operators are developing a new perspective on their current business models," said Thibault D'Orso, co-founder and chief revenue officer at Spideo – a personalization platform provider that offers tools for building recommendation and smart data around content and users.

"For a very long time, operators have focused on monetizing mass markets -- big numbers in volume. Now I think network providers are really thinking about the value of each and every individual. This is aligned with thinking from the rest of the content and advertising ecosystems which are increasingly interested in the value of qualified segments and audiences. The good news is that the technology to make this happen is available. Making the shift is not a technical issue at all. It's really about being creative and creating value for all participants in the value chain," he added.

Beyond CTV, Intelligent CPE Provides Enabling Technologies

The opportunity to provide highly tailored content and advertising experiences is not limited to the expanding CTV market. The installed base of conventional devices that receive content and entertainment from NSPs and pay TV operators via customer premises equipment (CPE) is opening doors as new intelligent devices are deployed to connected homes throughout Europe.

CPE -- including set-top boxes and gateways -- have evolved to do far more than simply enable connectivity to stream content, stated Mounir Toutah, vice president of video product management at VANTIVA – formerly Technicolor.

"Today, on a set-top box, we can have thousands of applications that can help users easily navigate from one service or experience to another. This not only good for consumers, it also enables NSPs to capture important insights that enable the entire ecosystem to offer more personalized and targeted content and advertisements," he said.

The key, he added, is to optimize the interface and integration points to ensure a seamless and intuitive end-user experience.

NSPs and PayTV providers Well placed to Add Value by Managing Complexity

Dominique Feral, chief marketing and strategy officer with Wyplay – a video platform solutions and professional services provider to the operator community -- concurred.

"Until now, the presence of a wide array of devices, content providers and services has made the lives of end users extremely complex. Consumer frustration related to the ability to quickly find and enjoy the right content at the right time has risen. That is why it is so important to bring together all of these disparate elements -- the user interface, content recommendations…and also…targeted advertising messages," said Feral.

He added that achieving this outcome can only happen when the entire ecosystem works together.

"It is the reason we are working with companies like Hoppr, Vantiva and Spideo to bring robust, integrated solutions to market. It is the only way to unlock new markets and create important value propositions that consumers will appreciate," he said.

Customer retention and growth depend on how well pay TV operators and NSPs deliver a seamless and personalized experience without complexity.

A well-orchestrated ecosystem also lays the foundation for providing a much higher level of accountability to advertisers, elevating confidence in digital advertising by delivering tangible outcomes in terms of sales performance of campaigns.

Sitting on a Gold Mine

Another important success factor for sustained growth in digital advertising to the connected home is to engage with consumers in a compliant manner. This is particularly important in Europe, which has taken the global lead in protecting consumers' privacy with strong regulations, epitomized by the stringent requirements of GDPR.

"NSPs and pay TV operators in the region have taken these regulations very seriously. They have already made major investments in platforms that provide privacy protections to European consumers when they connect to the content and services they desire," explained Georges Laplanche, head of network service provider and pay-TV operator partnerships at Hoppr.

Beyond being in an optimal position to comply with these essential rules, NSPs and content providers are also building up high levels of trust with their subscribers.

"As a result, operators have a fantastic opportunity to help consumers manage the complexity of their digital lives while also connecting the right audiences to the right messages from the advertiser community. In this respect, NSPs and pay TV operators are sitting on a gold mine."

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Photos: (Click photo to enlarge)

Cyril Daoud, Hoppr Thibaud D'Orso, Spideo Mounir Toutah, Vantiva Dominique Feral, Wyplay Georges Laplanche, Hoppr

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