Channel 4 launches video ad sales house to rival tech giants

Channel 4, home to popular British TV shows like “The Great British Bake Off” and “Gogglebox,” already sells BT Sport’s linear TV advertising, along with other non-Channel 4 broadcasters like UKTV and ESPN. Adding the digital rights is the next logical step, which the broadcaster hopes will help it compete against the dominance of the Google-Facebook duopoly.

“There’s an opportunity for a premium publisher video-on-demand sales house, a one-stop shop for agencies to buy premium inventory programmatically that can directly compete with the digital giants,” said Jonathan Lewis, Channel 4’s head of digital and partnership innovation.

The deal marks the second strategic play Channel 4 has made in the last six months to increase its scale, making it a more attractive proposition for agencies and advertisers that might otherwise be seduced by the duopoly’s reach. The first was joining the European Broadcaster Exchange, a Pan-European broadcaster programmatic video alliance, last November. “This [VOD sales house] is the response to how we tackle things on a local level,” said Lewis.

In the coming months, Channel 4 will be able to target the BT Sport ads based on its own first-party data, like viewer age, gender, location, interests and behavior, gathered from the 16 million registered users of All 4, Channel 4’s on-demand service.

Against the backdrop of heightened safety concerns due to brand ads appearing next to inappropriate user-generated content, the time is right for the broadcaster to play to the strengths of its premium environment. According to Lewis, some of Channel 4’s clients shifted their spend from YouTube to the broadcaster’s video on-demand service last November and December, though he wouldn’t reveal which ones or how many.

Google and Facebook tend to dominate short-form video revenues. Channel 4’s move to increase its audience and inventory for VOD also defends itself against the likes of Amazon Prime and other longer-form video content providers, said Dino Myers-Lamptey, managing director of MullenLowe Mediahub.

“Channel 4, as with all traditional broadcasters, needs to open up to the long tail of advertisers, which is the model that has made Google and Facebook so successful,” he said. “Simplifying access to buying inventory and providing more flexibility in the buy is what more businesses need.”

The goal is for Channel 4 to boost the number of publishers it sells digital ads for, increase its scale and, in turn, boost its own revenue. “It would be hard to speculate how successful Channel 4 will be, but it’s in a strong position,” said Tom Harrington, media analyst at Enders Analysis. “Online broadcaster video is of a quality that is unmatched amongst other ad-supported digital video and advertisers appreciate this, so it will be an increasingly lucrative battleground.”

The increasing threat of the duopoly to TV ad dollars has spurred broadcasters to put rivalries aside and join forces before video ad CPMs are squeezed to the same extent as display’s. Premium video demand from advertisers still outstrips supply, but broadcasters are wary of facing the same fate as publishers. Last summer, rival media companies Sky and Virgin Media teamed up to boost the scale of the addressable audience advertisers can reach to over 30 million viewers.