Ever since it was acquired by RTL in 2017, video ad tech platform SpotX has been increasingly focused on Connected TVs (CTVs). A new research paper published by the company suggests that this fixation is only going to strengthen as the demographics of CTV viewers in the UK become ever-broader.
We caught up with Ed Wale, MD of EMEA for the company to crunch some of the numbers, as well as probe into SpotX’s recent interest in ad-serving platform SpringServe.
SpotX’s study found that the average UK household has 1.4 CTV devices, with this number shifting only slightly dependent on household income. Households earning less than $26,000 per year owned 1.31 CTVs, while households earning above $132,000 per year owned 1.72.
Equally, in both income groups, the survey found that 48% of households watch CTVs daily, with this number rising to 50% in the middle earning bracket.
With the statistics mainly focusing on the UK, we asked Wale whether he saw Europe following suit. He said the UK was certainly ahead in terms of adoption. “Scaled up CTV offerings, outside of national broadcasters, always land in the UK first,” he argued, referring to the likes of Tubi, Samsung TV Plus and Pluto TV as examples.
The speed at which Europe will follow suit is dependent on regional variables. “The CTV arms of European national broadcasters are being adopted at different speeds across Europe, often predicated by market conditions such as broadband speeds and the strength of FTA offerings,” he continued. “But the diversity of viewer is not unique to the UK market – CTV has a universal appeal.”
Wale explained how while a lot of research looks at the economic opportunity of CTV, he felt the UK had now reached a critical mass of consumption. “This report looks to step away from that and looks to see how we can utilize that,” he told us.
Wale explained how the abundance of first party data that is provided by CTV platforms – which often have a one-to-one relationship with their customers – makes data much more deterministic than other ad delivery formats. “Many platforms require users to register with their age, address, name – all of these things have immense value for advertisers,” Wale told us.
The report also found that subscription fatigue among consumers was certainly hitting, with 70% of those surveyed refusing to spend more than £20 ($26) a month on streaming subscription services. Wale said this translated to between 3 and 4 SVoD services – a number that most avid streamers will no doubt have reached by now.
While the report does show engagement from all age groups, only one third of viewers were in the 18-35 age bracket, with 66% of those CTV viewers reported to be over 35.
While not troublesome for the moment, an overwhelmingly mature audience shows that most young people are getting their video content elsewhere, and that this format is hardly secure in the future. The 18-25 year-olds made up just 11% of the viewership – a demographically reasonable share, but not an encouraging one for the future of CTV.
Wale agreed that younger audiences were prone to consuming through a variety of devices but was keen to assure us that “there is definitely an appeal of CTV for younger people. They like an app-based experience, with on demand content.”
Around 7,500 people were surveyed across the top five European markets – Italy, France, Spain, Germany, and the UK. The research was carried out in partnership with Statista, which provided data gathering services and demographic guidelines.
We put it to Wale that the lines between ad serving and programmatic ad management have become increasingly blurred. SpotX acts as both a primary ad server and a programmatic platform, and the recent news that the company had ‘strategically invested’ in ad serving company SpringServe makes the distinction between these roles even more gray.
Wale seemed to agree. “I would argue that SpotX is an ad server technology that has programmatic inherently built in,” he told us. “The incumbent ad servers were established when programmatic wasn’t around, and have since invested in building out programmatic capabilities, primarily by acquiring and merging technologies. It’s our view that over time this will blur, and most media will be traded programmatically.”
Wale declined to comment on whether that ‘strategic investment’ into SpringServe was simply innuendo for a provisional acquisition, although his thoughts on the wider market would certainly suggest that’s where SpotX is heading.
He did say that SpotX was attracted by SpringServe’s functionalities in ad routing, which would assist the navigation of an increasingly complex ecosystem that houses ever more content owners and inventory sharing.
Yet despite all the excitement around CTVs, Wale was sure that SpotX was not moving to a solely CTV-based business. “I don’t think there will ever come a day when we are only a CTV company,” he explained, “as we can leverage a variety of different formats.”
These formats are still big business in less developed areas of the globe. While the US is really far ahead with OTT viewing, and the UK and larger EU markets are catching up, there are plenty of other regions where linear delivery still rules.
We asked Wale about the growing competition in ad tech. Independent ad servers such as SpringServe often struggling to compete with larger players such as SpotX, while companies of SpotX’s size are often dwarfed by the in-house ad departments of Big Tech.
“There’s a narrative in the market about the growing strength of social platforms – the larger ones have much more aggressive pricing than us. But scale isn’t necessarily everything. Players like us can deliver a higher level of specialism and service.” An age-old argument against big business, but one that has rarely stood the test of time.
As for the impact of the pandemic, Wale said SpotX tried to provide as much data to customers as possible, on both the buy and sell side. “We provided insights which ad categories were performing better and which were struggling”, he told us, with most of the results being fairly common sense. E-commerce survived, travel and hospitality tanked.
Wale said SpotX has seen a recovery in certain markets as lockdowns were eased, but he is cautiously optimistic. SpotX did not have to cut service fees to keep its clients, but Wale suspects that many publishers did strike deals to keep their inventory attractive in tough times.
SpotX integrates various media owners into the ad tech ecosystem, mainly short form online video platforms, premium publishers and in app video publishers. The company charges media owners through two channels – a cut of revenue derived from media transacted across its platform, as well as a platform fee. Founded in 2007, SpotX now operates in the US, EMEA and has units in APAC, with offices in Singapore, Japan and Sydney.