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UK Broadcasters’ Battle for VOD Heats Up Following Pressure from US Tech Platforms

The fight between broadcasters for advertising budgets in the U.K. is shifting from straight TV to video-on-demand.

Sky, ITV, and Channel 4 are stimulating efforts to make their VOD services more attractive for advertisers, and stave off the danger of tech platforms YouTube, Facebook, and Amazon.

Since January, all three broadcasters have released new ad setups, signed deals with ad tech suppliers to develop marketplaces and form programmatic groups to handle them. They hope to alter conventional media buyers’ tendencies to deal with VOD as a bolt-on to linear TV operations. That’s partly because VOD is much less accessible for businesses to measure in isolation. Broadcasters have begun to put money into ways to repair that.

Businesses have begun to move money from linear TV to broadcasters’ VOD to capitalize on how young viewers are watching more shows on demand. That circulation of capital into broadcaster VOD has become more pronounced in 2019 as advertisers attempt to adapt to the fragmented approach people watch TV, in line with four senior buyers interviewed for this text. Indeed, VOD shows seen on a TV set soared by 18% in 2018, per TV advertising and marketing body Thinkbox.

There was a time when broadcaster VOD could provide engaging audiences; however, not enough reach. Now, broadcaster VOD has hit sufficient scale that Sky, ITV, and Channel 4 can provide severe reach. Because of this, the U.K. VOD market surged from £302 million ($380 million) in advert income in 2017 to £391 million ($492 million) in 2018, following the Warc and Advertising Association.

Demand for VOD among consumers has triggered an arms race between broadcasters attempting to cash in on targeted advertisements.

Targeted adverts on BVOD cost between £30 ($37.74) and £45 (56.61) on average. That’s a lot of money to part with for a video format stripped of the robust targeting and measurement implemented by Facebook or YouTube.

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