How to understand the nuances of APAC’s budding CTV market

Until some of the newer markets reach maturity, the region can look to Australia as a country

The ad industry is championing the growth of CTV as it represents the best of TV and digital, an opportunity to be both creative and personalised all at once. However, different markets are at very different stages of maturity and for marketers charged with looking after the wildly varying APAC region, this can be a challenge. To offer some guidance, The Drum and Xandr have pulled together a guide to these nuances.

Treating the APAC market as one is always going to bring challenges but when technology is in its nascent stages, it’s a trick that markets often fall foul to. CTV is no different, as the ability to target consumers via Smart TVs and other internet connected devices such as gaming consoles, Apple TV, Amazon Fire TV Stick etc. hasn’t yet scaled in all markets, so grouping them together is often a band-aid to this early stage of growth.

Expanding on this point, Tom Dover, director of video marketplace development, Xandr, explains that while video consumption is exploding in APAC, compared to global trends, the advertising-funded CTV market is slower than some other parts of the world.

“The numbers that we see in general talk to digital video growth, which is absolutely huge, and it's just running away in APAC. For digital video consumption, it is expected to surpass 2 billion viewers by next year and that's a year earlier than forecast. But when you dig into this, more than half of that is subscription video on demand. Within that half, it depends on the market, it depends on the current device penetration as to how much is CTV. Globally, when it comes to streaming devices, in APAC, we're a little bit behind on CTV consumption, and therefore the ability to advertise on it,” he explains.

Penetration and monetization

To reach a scale that entices advertisers in, GroupM investment director, APAC, John Miskelly, says there needs to have a good penetration of Smart TVs alongside the monetization of the inventory, through ad-funded content platforms.

According to Miskelly, markets in APAC are at different stages of both: “You have different markets in Southeast Asia with low penetration and low monetization, then markets with high penetration and low monetization like Japan, alongside a few high penetration, high monetization markets such as Australia and China.”

He adds that even within Southeast Asia, there are green shoots where investment is being made and it’s showing exciting growth, such as in Thailand through broadcaster True.

All screens are not created equal

This doesn’t mean that premium, long-form TV isn’t being consumed in these markets, or that advertisers can’t reach consumers, it means that they are watching this content on other devices.

According to Dover, if you account for this consumption of premium content on mobile and laptops, alongside the audiences that have invested in the bigger screens, the scale and opportunity is sizeable.

“We do see mobile being prevalent allowing consumers to access and ‘catch up’ with that premium content more conveniently. Brands should look at it as a mixture between premium video content on CTV and mobile or laptop,” he explains.

Plugging the gap of scale by combining the mobile and big-screen opportunity is one way to attract investment but with that comes considerations for marketers. Viewers will engage with ads differently on different devices, and so marketers need to work with partners that can help them optimise their ads based on this.

“Think about the user behaviour between, for example, a TikTok video and watching something on a platform like Viu that has longer content. It is a very, very different engagement. The brands that are going to do well in this are creating strategies around these differences,” adds Xandr’s Dover.

Closing the gap with affordable tech

The excitement of the big creative ads, with digital personalisation, that is driving the industry hype around CTV is, after all, about the TV. So how quickly will this reach scale across different APAC markets?

GroupM’s Miskelly names India as a market to watch, as new technology is being launched at a better price point for local consumers. “In India, Xiaomi has released a more affordable smart television and Amazon is also pushing mart technology like the Fire TV Stick in India as well. There are a couple of smart hardware manufacturers that are looking to accelerate the growth of the hardware part of the equation. The hardware growth will obviously then have a massive impact on the monetization opportunity,” he explains.

India has a vibrant content streaming industry with 50+ OTT providers, so if the growth of device penetration can accelerate, it places India as an exciting opportunity for marketers wanting to invest in CTV.

The power of the marketplace

It is also a market that is traditionally transacted on a direct basis, which is why Xandr’s Dover believes one of the best ways a marketer can invest in CTV is through a marketplace partner.

“In India, a lot of premium video content is brought on a direct basis. So how do you, as a buyer, convince the publisher to put that into a programmatic marketplace? One of the things that improves is their yield strategies because they get additional value. Without that, you may well have some resistance. Brands also need to make sure that they’re working with a partner that has the capability and credibility tech-wise, in addition to the deepest relationships in order to drive success across a marketplace,” he explains.

The fact that different markets in APAC are working to different speeds in terms of maturity may not be solved overnight but understanding the prevalence of mobile, and working with partners that have the knowledge, tech and influence to build marketplaces is a shortcut.

Until some of the newer markets reach maturity, the region can look to Australia as a country that approached CTV with all the right moves.

“The Australian broadcasters got it really, really, right. Straight out the gate, they all started by collecting user authentication, they all got their apps published to devices like Samsung and LG TV quickly. This is in a market in which the internet is just absolutely brutal. To generate, high-definition imagery, you need a lot of bandwidth. It’s a small population in a terrible broadband market but it works,” adds Miskelly.