Channel 4 has joined an alliance of Europe’s biggest broadcasters to run commercials across their video-on-demand (VOD) services, in a move to combat Google and Facebook’s dominance of online advertising.
Under the new scheme, Channel 4 will become the exclusive UK partner in the European Broadcaster Exchange (EBX), enabling advertisers to book pan-European campaigns across its All 4 streaming platform and equivalent services operated by France’s TF1, Germany’s ProSiebenSat1 and Mediaset, which operates in Italy and Spain. According to EBX, the unified VOD services reach over 160m viewers a month.
Channel 4, which broadcasts Great British Bake Off, Catastrophe, First Dates and Gogglebox, has seen use of its All 4 service increase over 20 per cent year-on-year, to more than 60m monthly viewers. As part of joining EBX, the broadcaster has taken a 25 per cent stake in the joint venture for an undisclosed sum.
To accompany the news, Channel 4 has also announced that it is offering 100 per cent targeted advertising across All 4 across every channel, including mobile, tablet, games consoles and smart TVs.
At its 2018 Upfronts event, the broadcaster revealed it will have first party data available for every All 4 viewer early next year after mandatory registration is introduced across all platforms, significantly increasing the scale of its personalisation and targeting capabilities.
“From next year every All 4 advertising opportunity will be personalised or targeted which has proven success for brands reflected in our double-digit year-on-year revenue growth for the last several years,” said Jonathan Lewis, head of digital and partnership innovation. “And All 4 continues to grow as record-breaking numbers of registered viewers loyally return to the biggest range of entertainment on any on-demand service available for free.”
“Channel 4’s decision to run commercials across their video-on-demand services is a direct pushback to Facebook and Google’s duopoly of digital advertising,” said Josh Krichefski, CEO of MediaCom UK. “Both companies – which must now be seen as media organisations as much as they are tech organisations – already eat up 90 per cent of every new £1 spent on digital advertising, and Channel 4’s online video growth has opened up new possibilities to challenge the big hitters.
“This growth is reflective of a trend towards VOD services, not least among young people, where our research showed teens are watching TV on demand most often – more so than live TV. And Channel 4 can pull on a pool of content to take advantage of, including the likes of Great British Bake Off and Gogglebox to sate consumer demand of all ages.”
Broadcasters have started to make increasing amounts of money from catch-up TV services, with Channel 4’s digital revenues climbing 24% last year to £102m.
However, there are fears that the sheer scale of Google’s YouTube and Facebook’s online video could limit the commercial growth of broadcasters’ VOD services. They also fear that marketers’ spend on TV advertising could be lost to online video.
The Silicon Valley giants already snap up as much as 90% of every new £1 of online advertising money spent in the UK.
Analysis: Taking on the big hitters
Josh Krichefski, CEO of MediaCom UK, , commented on the news: “Channel 4’s decision to run commercials across their video-on-demand services is a direct pushback to Facebook and Google’s duopoly of digital advertising. Both companies – which must now be seen as media organisations as much as they are tech organisations – already eat up 90% of every new £1 spent on digital advertising, and Channel 4’s online video growth has opened up new possibilities to challenge the big-hitters. This growth is reflective of a trend towards VoD services, not least among young people, where our research showed teens are watching TV on demand most often – more so than live TV. And Channel 4 can pull on a pool of content to take advantage of, including the likes of Great British Bake Off and Gogglebox to sate consumer demand of all ages.
“With Facebook and Google’s strong push towards video content – including live streams – video ad spend is expected to grow by more than 24%. Online has changed the advertising landscape, as brands are now able to launch cross-platform campaigns through different mediums. If the Great British Bake Off audience is your target market, you won’t just reach all of them on TV anymore; on demand services that complement live TV offerings (such as All 4 or Sky Go) are now necessities for any brand or company wanting to communicate with as many consumers as possible, and advertisers are waking up to this.”
Programmatic boost for TV commercials
David Barker, Managing Director & SVP, Amobee EMEA commented on Channel 4’s decision to move further into programmatic: “Some say that TV is in decline, but the rise of connected TVs, video-on-demand and the mobile video has breathed new life into the broadcast industry. Sky has already enjoyed early success by monetising its audience reach through its AdSmart product, giving digital advertisers the opportunity to reach viewers based on Sky’s household attributes and targeting segments.”
“Channel 4’s latest move to offer data targeting across All 4 further confirms that traditional advertising channels can and will adapt to leverage the successes of digital. Programmatic will propel TV to become a very interesting advertising medium for marketers. This is an area the digital industry should continue to keep a close eye on in 2018.”