There’s generally strong awareness in the industry that the European CTV advertising market is very different from the US, and won’t develop in exactly the same way the US market has. The number of regional players, the language and legal barriers which exist within specific markets, and the unique models for TV ad trading which exist in some markets all present unique challenges for growing the European CTV ad market which don’t exist in the US.
One difference between the markets which doesn’t get much discussion is the differences in audiences’ attitudes towards advertising in the US and Europe. It’s often seemingly assumed that on this front, the two regions are pretty similar – consumers like ad-free content, but are generally happy to watch ads in exchange for free or cheaper TV.
There are, however, major differences according to new research from RTL AdAlliance. The international sales house has launched the third edition of its annual study The New Life of the Living Room, which charts changing TV viewing habits. This year, for the first time, the survey covered the US as well as eleven European markets (Belgium, Denmark, Finland, France, Germany, Italy, The Netherlands, Norway, Spain, Sweden, and the UK). And the data suggests that US audiences are significantly more receptive to advertising in streaming services on the whole – which has implications for European broadcasters building out their CTV offerings.
Europe’s ‘ad enough
On many metrics comparing CTV penetration, the US and Europe aren’t too dissimilar.
Eighty-one percent of US respondents said they own a smart TV, slightly above 78 percent in Europe. In Europe, 69 percent of those surveyed said they watch linear TV at least three times a week, compared to 68 percent in the US. Meanwhile more US respondents said they watch subscription video on-demand (SVOD) content at least three times a week (77 percent) than Europeans (77 percent).
There is however a major difference in consumption of AVOD content (separate to BVOD content). Nearly two-thirds (62 percent) of those asked in the US said they watch AVOD content at least three times a week, compared to just 25 percent in Europe.
This may in part be down to different tolerances to advertising in the two regions. When asked to rate from one to five how annoying they find advertising on linear TV, half of all Europeans said either four or five, compared to 32 percent of Americans. There was a similar trend for BVOD (49 percent in Europe, 31 percent in US), AVOD (41 percent in Europe, 30 percent in US), YouTube (57 percent in Europe, 38 percent in US) and SVOD (45 percent in Europe, 36 percent in US).
Europeans appear less open to targeted ads on connected TV. Just eight percent said they are “definitely” open to targeted ads on TV, and 28 percent said they are “probably” open, compared with 32 percent who said “definitely” and 34 percent who said “probably” in America.
And Europeans, by their own reckoning, are much less likely to respond to TV ads. For example only 19 percent of Europeans said they either often or from time-to-time buy products after seeing them advertised on TV, compared with 51 percent of Americans.
A European model
While this might paint a tough picture for ad-supported CTV advertising in Europe, it’s important to remember that these attitudes don’t necessarily match up with behaviours. For example, Europeans say they’re significantly more annoyed by advertising on YouTube than on linear TV, yet YouTube isn’t struggling for eyeballs in Europe.
But user experience around advertising is certainly important for CTV services wanting to attract and maintain audiences. And RTL AdAlliance’s data shows that best practice in the US may not carry over to Europe.
One win-win often outlined by broadcasters is making ads more relevant, which they say works for both advertisers and audiences. But RTL AdAlliance’s data shows in Europe there’s little appetite for targeted ads on TV.
Thus, European broadcasters should think carefully about how they construct the ad experience on CTV – looking at overall ad load, but also the length and spacing of ad breaks. Less interruptive formats such as pause ads may also be even more important in Europe, as well as any other tweaks which can make advertising less off-putting for viewers.
