Business model for addressable TV works well in Czech Republic

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Digital marketing is experiencing rapid development. Predictive and artificial intelligence, a high degree of automation, attribution models, accurate cross-media metrics, and one-to-one communication are just a few of the achievements ad tech has brought us over the last several years.

Business model for addressable TV works well in Czech Republic

It wasn’t long ago that ad tech was the domain of only classic online media. But nowadays, its use is skyrocketing on the big screen.

At the end of 2015, together with Lukáš Hnilička and Jiří Voříšek from Hybrid, we came to the conclusion that our unique circumstances would enable us to very quickly put into practice our one-of-a-kind project – programmatic buying on HbbTV via an existing digital advertising network.

In order for our work to have long-term perspective, we decided to do our best to respect the rules of both worlds – TV and the Internet. The general partnership between R2B2 (Internet) and Hybrid (TV) has enabled us to make full use of the know-how from both fields and build a successful business model in only two years.

Hybrid coordinated the integrators and eight Czech broadcasters whose progressive approach facilitated the quick deployment of Hybrid Ads ad tech reaching ca. 20% of households in the Czech Republic. Such extensive reach was attainable from the outset using standard HbbTV which enjoys great popularity, especially in Europe.

HbbTV itself is intended to harmonize the Internet and TV industries. It has many attributes that make it the ideal environment for the introduction of modern ad tech. This has even been acknowledged by Google, world leader in the field of ad tech, which announced their bid for cooperation at this year’s HbbTV Symposium in Rome.

In order to ensure the openness of the existing ad-tech ecosystem, we decided to utilize the full programmatic approach with dynamic ad insertion and header bidding. At R2B2 we have developed the AYM solution that ensures header bidding implementation, programmatic ad placement management, and performance reporting. Thus, we have been able to include ad placements for TV in the all-screen digital ad network. R2B2 AYM was chosen by an expert panel at the HbbTV Symposium as a winner of HbbTV Awards 2017.

Our solution is based on innovative auction logic. It enables real-time auctioning of ad placements across demand platforms. The network offers several ad formats – banners, pre-roll, and switchroll. For nearly two years, all the formats have been continuously bought by dozens of major advertisers, programmatically and in real time.

Broadcasters, which are getting used to a new revenue stream, are massively promoting the added value of the red button, which is why there is very high awareness in the Czech Republic. ČRa, a Czech DTT broadcaster whose infrastructure hosts the solution, presumes that the steep climb in the number of HbbTV devices is connected to the transition to DVB-T2.

Also, perfecting the HbbTV standard will bring further added value such as in the form of cross-device pairing, accurate synchronization, and possibly the ability to make payments via TV. Soon it will become an indispensable medium for advertisers.

The development of TV ad tech is necessary in the times of the Google and Facebook duopoly. The opportunities offered by HbbTV – the high share of terrestrial and satellite broadcasting and relatively small fragmentation – are positional advantages that we are well aware of. We can assure advertisers as well as all of our partners and colleagues from Hybrid of the same thing we assured Mr. Régis Saint Girons, a member of the expert panel at the HbbTV Awards – that we will continue to work hard. We still have a long journey ahead of us, but one full of excitement.

Martin Čelikovský and Kamil Foltin