Boosting ad revenuesUnlock the opportunities in a diverse Eastern Europe

The Eastern Europe growth story

Eastern Europe is perhaps one of the

most vibrant and culturally rich zones in

Europe, and is thus a potential goldmine

for localized TV programming.

Unsurprisingly, TV advertising revenues in

the region have been returning to growth

post 2015, and 13 out of 14 markets are

expected to grow in 2016.

This presents a great opportunity for TV

networks to make most of their investment

from the region. However to achieve this,

they would need to cater to local

advertising demands in each of the

countries in Eastern Europe.

This means that in order to successfully

monetize content in each country across

Eastern Europe, TV networks may need to

create separate satellite or fiber feeds.

However, setting up additional satellite or

fiber feeds can be very expensive and the

resulting ROI isn’t often commensurate with

the high investments needed.

At the same time, by choosing not to

localize the satellite feed, TV channels in

Central and Eastern Europe region could

fall behind other upcoming markets in Africa

and the Middle East in terms of ad revenue

growth.

By not localizing the feeds, TV channels in Central and

Eastern Europe region could fall behind other

upcoming markets in Africa and the Middle East in ad

revenue growth.

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*Source: IHS ‘Central and Eastern European TV Advertising Market Monitor

6301

5236 5469

0

1000

2000

3000

4000

5000

6000

7000

Revenue in USD million

CEE TV Advertising Revenues

2014 2015 2016

Addressing the issue of evolving ad-regulations The diversity of Eastern Europe can be the

biggest challenge while monetizing the region,

due to varied regional regulations. By playing

the same ads throughout the region, TV

networks could potentially violate specific

regulations applicable in any of the Eastern

European countries. For example, in 2015,

Romania voted for a bill to ban pharmaceutical

drug advertisements.

When the law comes into force, it will prohibit

advertising any OTC drugs to avoid self-

medication. So imagine the legal debacle if a

cough syrup advertisement meant for all of

Eastern Europe, is also broadcasted in

Romania.

Similarly, in Russia a 2015 legislation restricts

advertisements on Pay TV and aims to

penalize channels earning revenues from both

subscription fees as well as advertising.

Broadcasters could face severe penalties for

telecasting advertisements on subscription

channels if their local content mix is found to

be lesser than 75%.

While legal ramifications of violating such bills

will impact a channel’s brand significantly,

hurting public sentiments can perhaps cause

even more severe, and long term

repercussions.

Country-specific prohibitions on certain type of advertising

could make it trickier to ensure compliance.

Recent bill passed in Romania prohibits advertising of OTC drugs.

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Cultural diversity of Eastern Europe

Unlike homogenous regions like the

United States, Eastern Europe tends to be

a far trickier territory for broadcasters.

Different nationalities in Europe have

different approaches to life, and hold

different aspects of life as sacrilegious.

What passes off as a harmless joke in one

country, could be perceived as a personal

insult in another.

For example, a Spitfire Ale advertisement

that is set in WWII era, was deemed as

‘insensitive and offensive’ to the Polish.

A Penguin publishing campaign on a new

series of books also got into trouble for

depicting Russia in an unfavorable light.

These subtle cultural differences in Eastern

Europe make the possibility of airing

potentially offensive content very high. On

a common satellite feed, there is no simple

way to stop such ads from airing. The

alternative would be to set up separate

feeds for each country or to localize ads

through local operators or playout service

providers.

A petition was launched to ban ads by Penguin publication depicting Russia

in bad light

Subtle cultural differences in Eastern Europe make it

challenging to manage viewer preferences and increase

the risk of offending cultural sentiments.

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Challenges of traditional methods to localize content Adding a new satellite feed can be an expensive

endeavor. The cost of renting a satellite space

can be anywhere from Euro 25,000 to Euro

40,000 per month depending upon the quality of

output required. This easily makes up for annual

costs closer to half a million Euros.

Now, imagine that the same channel needs to

be localized for two or three different countries

in the Eastern Europe region. The costs will

naturally double or triple in correlation to the

number of additional feeds to be set up.

To add to these costs, 4K penetration in EU is

expected to be around 35% by 2019.

The alternative to using expensive satellite

feed, is using localization services provided

by local cable operators or playout service

providers. Although this method costs

lesser than adding a separate satellite feed,

it allows TV channels very little control over

playout. Also, lack of a return link means

there is no guarantee that content is being

localized as per the requirement.

The costlier satellite-based delivery fees,

and lack of control and transparency using

other methods jeopardize the whole

localization process. TV channels need to

shift to a solution that can offer greater

control at lower costs.

To facilitate demand for superior quality, soon each channel will

need additional feeds for HD and UHD, further inflating the cost

of operating a TV channel.

A satellite-based channel launch can cost nearly half a million Euros annually.

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How geo-targeting using replacement triggers can help

One of the easiest way TV networks can

replace ads from common satellite feed, is by

using intelligent IRDs. Ads from the common

satellite feed can be marked with replacement

triggers so that the IRDs can detect them and

replace them with local ads.

Various replacement triggers such as DTMF,

SCTE-35, and Amagi Watermark can be used

to ‘mark’ the ads that need to be replaced. The

local ads can be transmitted to IRDs through

satellite trickle bandwidth or via cloud.

This approach requires minimal changes to the

existing workflow, and does not require setting

up any additional satellite feeds. At the same

time it ensures that TV channels have full

control of their playout.

Geo-targeting using replacement triggers can help TV networks

gain more control over ad revenues, improve ROI, and expand

their pool of local advertisers.

This method has three distinct benefits for TV

networks. First, brands working with them gain

more control over their targeting and ad-

budgeting, allowing TV networks to expand

their pool of advertisers with addition of more

local brands.

Second, if a brand has multiple products

targeting specific markets across Eastern

Europe region, splitting the ad inventory for the

region can improve ROI.

Finally, same product can be promoted through

localized creative by geo-targeting the ads at

city/country- level.

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Broadcast local ads without setting up additional feeds

Future of geo-targeting ads

Over the next few years, Eastern Europe will

present an excellent opportunity for TV networks

to capitalize on the growth and capture newer

markets. By using satellite trickle bandwidth or

cloud based broadcast technologies to geo-

target the ads, TV networks would be able to

significantly improve their ROI.

On the other hand, as more youngsters shift to

non-linear platforms, TV channels may need to

innovate consistently on their content delivery

models as well.

In either case, Eastern Europe TV ad market is

on the verge of a major overhaul and it would be

interesting to see what it leads to.

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Personalized and targeted ads will become the norm as viewers

shift to multiscreen platforms, expanding the scope of ad

monetization in Eastern Europe region.

About Author

Sanjay Kirimanjeshwar heads marketing for technology solutions

at Amagi, worldwide. Amagi is the leader in cloud-based TV

broadcast infrastructure for channel playout, content

regionalization, OTT, and targeted advertising. You can reach out

to Sanjay for more information at sanjay@amagi.com.

Know more about geo-targeting and

monetizing common satellite feeds

Contact Amagiwww.amagi.com