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Sky, ITV and Channel 4 are to fight back against the social media companies Facebook and YouTube by pooling their streaming advertising services to make it easier and more affordable for millions of small businesses to run ad campaigns.
The project is an attempt to break big tech’s stranglehold over the UK’s £45bn ad market.
Google and Meta, which owns Facebook and Instagram, have increasingly dominated the UK ad market and now hoover up two-thirds of the £45bn spent by brands annually.
While this has damaged the traditional TV advertising businesses of Sky, ITV and Channel 4, most of big tech’s ad revenues come from small and medium-sized businesses with smaller budgets that cannot afford to advertise on TV or pay agencies to book campaigns.
Now Sky, Channel 4 and ITV are providing their streaming ad space in one marketplace, allowing smaller advertisers to easily run a campaign across all their streaming services simultaneously.
The broadcasters have adopted the formula used by big tech – a simple “self-serve” model so companies can book ads with a few clicks and not have to use agencies – in what they hope will open up a multibillion-pound market of so-called long-tail advertisers – the huge numbers of small-budget SMEs – that spend with Google and Facebook.
“This is a fightback,” said one TV advertising executive involved in the launch of the marketplace. “Facebook and YouTube have done really well in allowing anyone with a credit card to book an ad campaign, they created the long tail of advertising, TV has never really played in that market before.”
The move by broadcasters takes place weeks after Mark Zuckerberg, the chief executive of Meta, said the company intended to double down on targeting small businesses by launching artificial intelligence tools to make it even easier for them to create campaigns in what he called a “redefinition of the category of advertising”.
The broadcasters are aiming to attract some of the approximately £30bn spent on digital advertising in the UK.
The broadcast video-on-demand market (BVOD), which includes the streaming services run by traditional UK broadcasters, is worth about £1.1bn annually, according to AA/Warc figures.
As UK broadcasters have increased the scale of their streaming businesses, the BVOD advertising market continues to grow rapidly, helping to offset the decline in spending on traditional TV, which fell to £3.9bn last year.
Sky, Channel 4 and ITV are realistic about how much of the digital ad market they may be able to entice to spend on their streaming services, but they believe there is a multibillion-pound opportunity from the larger players among the small and medium-sized businesses who are now focused on Facebook and YouTube.
“TV won’t be able to work with every advertiser in the long tail,” said the TV executive, referencing the idea of capitalising on niche markets, using data-driven targeting and digital platforms. “We are talking about trying to attract the fat end of the long tail. It is absolutely about fighting back against the social media giants.”
The broadcasters also said they are in discussions to introduce a simplified buying platform, based on ITV’s Planet V technology, to make it easier for media agencies to book campaigns across all their streaming platforms.
