Ad-based OTT facing uphill struggle in CEE

Advertising-based OTT services face an uphill struggle in central and eastern Europe, given the time it has taken to get cable and satellite-only channels accepted as a valid medium for advertisers, according to Marcin Boroszko, CEO of Atmedia Group, speaking at Informa’s Digital TV CEE event in Prague yesterday.

OTT via connected devices remains a highly fragmented market with a variable user experience and an inability on the part of users to easily access content, said Boroszko, who pointed out that it had taken 16 years to establish the cable and satellite channels universe in CEE as a viable platform for advertisers.

The online video advertising market is Poland was €12 million last year and would probably rise to €17 million this year, said Boroszko. This meant that it amounted to about 1% of the overall ad spend, he said. Based on such numbers, there is little incentive on the part of media companies to launch services from the perspective of an immediate return on investment.

Boroszko said that not only is usage currently limited, but there are no research standards that are accepted by media agencies and there was no way to make meaningful comparisons with ‘old’ media including linear TV. Advertisers do volume deals with existing media players on an annual basis, meaning that the advertising landscape is unlikely to change quickly and will remain relatively unresponsive to emerging technologies in the short term, he said. For advertisers themselves, ratings are required to deliver sales. There is little incentive to take risks while the TV advertising market itself is declining, said Boroszko.

Even DVR use is extremely limited a difficult to measure, Boroszko said. He said that, according to Nielsen, only 30.7% of the 12.1% of Polish households equipped with DVRs were actually using them to record any programming in 2011. Use of DVRs was therefore very far from being measurable in any useful way from the perspective of advertising, he added.