Linear and digital convergence: tailoring your ads to meet CTV’s booming popularity in Europe

Stringent data laws and changing viewer habits have made TV advertising more challenging, but the growing popularity of CTV and convergence of linear and digital presents an opportunity for everyone to win the ad game.

UK Connected TV (CTV) continues to increase in popularity with audiences investing more and more time into premium content.

According to research from AudienceXpress, FreeWheel’s premium video media sales house, UK TV viewing habits are driving linear and digital convergence with audiences regularly tuning in to premium content from a broad mix of platforms.

Over half (55%) of Brits’ first choice for TV is subscription-based video-on-demand (SVOD), followed by live TV channels (37%) and TV replay (35%). Nearly half (46%) of Britons with access to video streaming platforms are watching content on them every day.

UK-based viewers are tuning in to more broadcast VOD than any other European country, and along with the popularity of SVOD, AudienceXpress believes this trend confirms that Britain is fully behind streaming platforms yet maintains an interest in broadcasters’ offerings - linear and digital convergence.

More than half (59%) of those who access content via free on-demand streaming services on CTV do so when they cannot find programmes they enjoy on linear TV channels. Indicating that streaming and linear content are more likely to complement rather than cannibalise each other.

Tailoring the advertising experience

Consumers are cautious about their data and there is a need for advertisers to regain their trust by putting privacy at the core of industry concerns. The study found a preference among almost a third (32%) of UK CTV viewers towards contextual ads that are informed by the content they are watching. This figure increases to 42% among viewers aged 25-34.

Over half (57%) of those surveyed prefer one long ad break before the content and no further ads opposed to sporadic ad breaks intermittently placed within the content. This was most popular among younger UK respondents aged 18-24.

The ad experience within video aggregators, for example YouTube, is decreasing in popularity. According to the research, 71% of Britons who access content through social video aggregators on CTV feel there are too many ads and viewers say they recall ads viewed on CTV screens better than ads they are exposed to on video aggregators.

This raises the question regarding whether or not advertisers should adjust the ad experience to suit consumer preferences, as a more favourable experience appears to improve a viewer’s memory of an ad.

Stefanie Briec, Director, Head of Demand Sales UK & International for AudienceXpress, said: “Evolving viewing habits are continuing to drive the convergence of digital and linear TV, with premium video content from online video aggregators now being watched on the TV screen.”

“Alongside this, the increase of hybrid streaming services on the market, which include both AVOD (ad-supported video-on-demand) and SVOD in their business models, underscores the reality that high quality, TV-like content retains the power to capture audience attention regardless of channel or platform. Moving forward, marketers require a holistic approach to TV to identify the channels that complement each other and boost the performance of their campaigns.”

Ad views growing globally

AudienceXpress’s report follows earlier research conducted by its principal company Freewheel into consumer ad viewing habits across Europe and the US. As the premium video ecosystem continues to evolve, the study uncovered an upward trend in ad views across both Europe and the US.

In the second half of 2022, ad views in Europe continued their double-digit growth, increasing 13% year-on-year while the US enjoyed slightly slower growth at a rate of 7%. The varying levels of growth are likely due to the vastly disparate manner in which ads are both developed and delivered to audiences in Europe compared to the US.

Europe vs US

FreeWheel’s Video Marketplace Report for H2, 2022 found that ‘big screens’ remain the most central point of ad consumption from premium content in Europe. Over half (56%) of European ad consumption is taking place via connected TV (CTV) and set-top box video on demand (VOD).

US consumption however, occurs through over the top (OTT) devices - outside of paywalls - 62% of the time. Avoiding paywalls is far less common in Europe, where some kind of authentication is required before watching premium content for eight in ten (80%) viewers.

CTV and targeting

The opportunity CTV presents for advertisers to reach an engaged audience in a premium environment with relevant messaging makes it a channel of significant importance. With CTV’s popularity increasing in Europe, data protection regulations have become more stringent and it is having an impact on advertiser targeting.

In Europe, 72% of ad campaigns use demographic-based targeting while the same percentage (72%) of campaigns in the US rely on behavioural-based targeting.

Driven by the adoption of CTV and rapid growth of free ad-supported channels (FAST) , programmatic deals within the US have risen significantly - 12% year-on-year - and now account for 32% of all transactions.

The share of programmatic remains relatively small in Europe however, equivalent to just 14% of all transactions, but as privacy measures continue to tighten, FreeWheel expects this figure to rise as deals are forced to become more curated.

This hypothesis, if accurate, would mean that careful curation of ads and adoption of viewer demands will become the key to unlocking successful TV advertising now and into the future.