LONDON, UK — After a few years in which the center of the TV industry’s gravity had swung toward streaming subscriptions, the re-emergence of ad-supported models is now the driving force.
But that rise is not necessarily new. Not only had free-to-air TV continued to exist alongside historic linear pay-TV; arguably, the recent growth of subscription content was also driven by the 2009 crash of the advertising economy – a cycle that may now have ended.
In this video interview at Beet.TV’s London summit in December, James Brown, Head of International, Magnite, says the economic conditions are now set to consolidate free, ad-supported streaming TV.
AVOD rising
“With the cost of living crisis, people’s budgets increasingly squeezed, there’s a limit to how many subscription services any given household can accommodate,” Brown told me.
“We see the AVOD model being increasingly pre-eminent.”
But, viewed through Brown’s international lens, that isn’t necessarily new. In parts of the world which did not particularly see the same subscription boom that Europe and the US did, ad support had already remained entrenched.
“If you look at markets like India or in Asia where household incomes are typically much more modest, then AVOD is already that commercial model of choice,” he says.
Experience is key
Even so, whilst ad-funded TV and video is not a new invention, what is new this time is the extent to which those ads are being served by programmatic software.
If not managed properly, that could mean the risk of things like duplicate ad play-out, unsuitable ads appearing, ads appearing next to those of rivals or even video creative being rendered incorrectly.
“User experience is absolutely crucial in all of that,” says Magnite’s Brown. “When you move into the streaming space, partner selection becomes incredibly important.
“AVOD is going to be the preeminent commercial model, so having a seamless advertising experience for your consumers, is going to be incredibly important.”
Magnite’s attraction
Magnite provides software the “sell side” uses to make its inventory available to ad buyers.
In 2021, it purchased SpringServe, a connected-TV focused ad serving platform, for $31 million.
In 2022, it was used by GroupM to help power the agency’s own Premium Marketplace, GroupM’s effort to better aggregate TV and other ad inventory.
Supply path optimization
In recent times, the industry has been talking more about so-called “supply path optimization” (SPO) practices. But Brown says that is “not new news”.
“We’ve been operating in the display video space for a number of years, and SPO has been around, I would say, certainly for the last three or four years or so,” he says, defining SPO in two ways:
1. Transparency of the supply chain
“Understanding that, for a notional dollar that comes from an advertiser, how much of that dollar arrives with a publisher or media owner or a technology platform at the other end. What is the transparent path by which those fees have been taken?”
2. Path to performance
“The most optimum path to (advertising) supply… making sure that, whichever path that dollar chooses to get through to that media owner provides the best performance for the advertiser.”
Focus for owners
As advertisers look to optimize their supply paths, Brown is urging media owners to focus on two areas:
- “Provide as much transparency as possible around some of your commercial partnerships,” he says.
- “Ensure that you curate and utilise all of your respective assets to ensure that your media performs as effectively as possible.”
For a TV player, that might mean using data to curate inventory so that an advertiser knows exactly what it’s getting.
You’re watching “Looking Ahead: TV in Europe 2025” a Beet.TV Leadership Summit presented by Magnite & Publica, in partnership with egta. All videos were filmed on-site at our event at London’s Soho Hotel. For more videos from this series, please visit this page.
