TV advertising

Playing field

TV advertising in the Netherlands represents a market of around €0.9bn - €1bn, largely shared by public broadcasters, RTL, Talpa and Branddeli. TV advertising in the Netherlands shows a pattern of higher growth in even-numbered years, when major sporting events, like World Cup football and the Olympics boost revenue, and low growth or even a decline in odd-numbered years. This pattern is expected to continue: a forecast CAGR of 0.9% for the period 2018-–2022.

The TV advertising growth rate is negatively impacted by the shift in viewing time towards OTT platforms and, for example, video consumed via social media. In 2017, the Dutch industry faced a €50m correction (unadjusted for seasonality). Prior to 2017, the Dutch TV advertising business seemed largely unaffected by reducing declining viewing time and budgets moving towards internet advertising.

What’s new?

Partnerships and technological advances have made new types of advertising possible, and could create many opportunities going forward. In June 2017, SBS Broadcasting launched an innovative advertising initiative, in partnership with Chio, 24i, Isobar and Carat. The 400.000 households in the Netherlands with an HbbTV signal can now receive extra online content and overlays on the programmes they watch, which in turn allow advertisers to tailor their messages to specific audiences and garner more data-driven insights. This is just an example of how new technologies can increase the value of TV in the advertising domain.

More recently, in April 2018 XITE Networks, a personalised music channel provider, partnered with ad tech company SpotX to provide programmatic advertising. With the help of Ziggo’s set-top boxes, XITE permits users a host of personalisation options regarding their music preferences, such as creating their own music channel. SpotX is able to use the data provided by this activity to pinpoint more targeted audience segments. Bringing the technology of Internet advertising into the TV space looks set to be an ongoing theme in the Netherlands over the forecast period, helped by 46% of Dutch households having Internet access through their TV set by mid-2018, according to Stichting KijkOnderzoek (SKO).

Television advertising market (€ millions)
Netherlands Historical Data Forecast data CAGR %
  2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 18-22
Spot 832 850 854 863 823 844 838 855 844 860 0.9%
y-o-y growth   2.2% 0.5% 1.1% -4.6% 2.6% -0.7% 2.0% -1.3% 1.9%  
Non-spot 101 114 111 129 117 117 114 121 117 124 1.2%
y-o-y growth   12.9% -2.6% 16.2% -9.3% 0.0% -2.6% 6.1% -3.3% 6.0%  
Online TV advertising revenue 8 11 13 15 17 19 22 23 25 27 9.7%
y-o-y growth   27.0% 22.0% 17.0% 14.8% 13.2% 10.3% 9.1% 8.2% 7.6%  
Total TV advertising 933 964 965 992 940 961 952 976 961 984 0.9%
y-o-y growth
  3.3% 0.1% 2.8% -5.2% 2.2% -0.9% 2.5% -1.5% 2.4%  

Outlook

With daily TV viewing continuing to slowly decline, exclusive live content increasingly becomes a valuable asset for parties that want to reach a large, non-time-shifted audience. Examples include live shows, news, human interest shows and obviously sports. On top of acquiring sport rights, parties need to invest in innovative concepts as, given that competition is increasing from multiple angles, including e.g., for example, sport clubs which are investing in their own media channels.

Parties in the TV advertising value chain need to work hard to protect its their €0.9bn to €1bn revenue as Internet advertising continues to increase its share of the overall advertising mix. More and more parties are entering the video landscape. Initiatives such as New TV (led by former Disney chairman Katzenberg), which will focus on 15-minute, easy on -the -go programmes, are being embraced by financial and strategic investors. On the one hand, tThey are increasing the time consumers spend watching video. On; on the other hand, they but are competing with linear TV viewing time.

The concerns in the industry are illustrated by RTL’s decision to restructure its Dutch organisation and by an announcement from the Dutch Ministry of Education, Culture and Science (Dutch: OCW) which informed Dutch public broadcasters that they should anticipate smaller contributions from the Dutch Foundation for Broadcast Advertising (Ster).

Having said that, large advertisers are still spending significant budgets on traditional channels like TV. Smaller and new businesses such as e-commerce companies are also exploring opportunities to add TV advertising to their media mix. Advantages mentioned are that they are familiar with the concept, and can rely on long-established, often more transparent methods of measurement and pricing.

A similar level of trust needs to be garnered on digital platforms before major advertisers are universally willing to solely advertise solely via online media. Furthermore, as the penetration of smart TVs grows, new contexts and opportunities to engage consumers with targeted digital advertising, across multiple touch points, using innovative new ad formats, are starting to emerge.

The future of TV advertising is not assured, but it has potential to extend its life cycle.

Contact us

Steven Pattheeuws

Partner Strategy&, PwC Netherlands

Tel: +31 (0)88 792 29 36

Follow us