OTT & CTV Advertising in MENA
The Streaming Lab - MENA #19
Hey 👋 - Yann here.
This is the 19th issue of The Streaming Lab - MENA.
Each Saturday, I analyse 1 topic to better understand the OTT market in the Middle East & North Africa.
This week, I’m looking at the potential of OTT & CTV Advertising in the region.
I would like to thank Sammer Elia, Sales & Business Development Director MENA & PAK at Viaccess-Orca for his insights on this topic.
Enjoy the show!
I’ll show you first what’s the difference between OTT & CTV Advertising, and why OTT Advertising is a trending business model.
Then I’ll try to understand what is the potential in Middle East & North Africa.
OTT vs. CTV Advertising, what’s the difference?
OTT content can be watched on any device that has an internet connection: desktop & mobile Web, smartphone & tablets Apps, smart TVs and set-top boxes.
Today, users prefer viewing this content on Connected TV (CTV) because it offers a higher quality viewing experience.
The main CTV devices are:
Regular TVs connected to devices like Apple TV, Amazon Fire Stick or Chromecast.
TVs with built-in Internet connectivity like smart TVs.
The most important difference between OTT & CTV Advertising is that Connected TV Ads are served on television screens.
Why OTT Advertising is a trending business model?
OTT Advertising services are not new to the MENA region. The first streaming players were pure AVOD. Do you remember shahid.net in 2010, Istikana in 2011 or Rotana Cinema in 2013?
Advertising models are coming back in the spotlight, not only in North America and Europe, but also in MENA. What changed?
New Advertising business models
There are 4 main OTT Advertising business models, but not all of them are available in the region.
AVOD (Advertising-based Video On Demand)
On-demand content that is Ad-supported and free to watch: ADtv, ayn.om, Awaan, Baynounah TV, Cinemox and Rotana.
HYBRID AVOD/SVOD (Advertising & Subscription Video On Demand)
On-demand limited content that is Ad-supported and free to watch + On-demand premium content that is Subscription-based: Crunchyroll, Mahatat, MX Player One, RoyaTV, Shahid, ShemarooME, Viu, Weyyak, YuppTV and Zee5.
FAST (Free Ad-supported Streaming TV)
Streaming linear channels that are Ad-supported and free to watch: ADtv, Rotana, RoyaTV, Shahid, Weyyak, YuppTV and Zee5.
SVOD services with an Ad-supported tier that is cheaper than the premium plans: There is no streaming service offering this model in MENA for now.
More content available
Content has never been more accessible: Movies, TV Series, short forms or Web Series from India, Korea, Lebanon, Philippines, Saudi Arabia or Turkey are already available on MENA-based OTT services. And volume & quality will keep growing!
TV networks and distributors can now launch their own Free Ad-Supported Streaming TV (FAST) channels and invest in direct-to-consumer digital reach and engagement.
Content providers are now ready to distribute premium content on a revenue share model, with limited minimum guarantees.
Powerful and affordable technology
There are much more OTT platform providers today, and they all offer a unique value proposition.
Do you plan to launch an OTT Sports service ? Do you need a platform supporting hybrid business models? Are you looking for a deal with OpEx only? I’m sure there is a platform provider that can help you launch your service in a few weeks and at a reasonable price.
And the best part? Advertising is now considered as a must-have model. Providers now include full-stack Ad tech solutions at the core of their platform, with increased segmentation capabilities, data management and direct integration with supply-side and demand-side platforms.
New opportunities for brands & advertisers
Brands & Advertisers in MENA are ready to allocate budgets to OTT & CTV Advertising. And for good reasons: the opportunity to create premium campaigns with higher targeting capabilities and offer detailed measurable results.
The challenge in the region will be to improve all the parameters to reach a higher Cost Per Thousand (CPM), the cost an advertiser pays per one thousand advertisement impressions.
The potential of CTV Advertising in MENA
Let’s have a look at the U.S first. Pixalate’s report revealed that Connected TV continues to dominate the advertising landscape in the first semester of 2022: 94% of U.S households are now reachable via open programmatic CTV ads (up from 86% in 2021).
We don’t have access to this data in Middle East yet, but a quick look at the CTV Apps available in the region shows there is room for improvement: out of the 8 CTV Apps that were up and running yesterday, only 3 were serving ads correctly. And One service was even promoting an SVOD competitor.
What we can compare is the CTV Ad Spend between regions: North America & EMEA.
What are the main insights?
Open programmatic CTV ad spend in North America has grown more than four-fold in three years.
In EMEA: 21.6X rise compared to 2019 - an explosive growth after a comparatively modest 97% yoy gain from 2022 to 2021.
We know this growth is mainly driven by the European countries, so what’s happening in MENA?
Following my discussion with several advertisers and publishers in the region, it looks like the adoption of targeted digital advertisement is picking up.
Indeed, with the various plans of SVOD players to launch Ad-supported tiers and the arrival of FAST, it is clear that the digital advertisement inventory is attracting advertisers that are expecting a significant increase in the digital advertising spend.
The challenge for all is to marry wisely the rising digital inventory with the rich and diverse segments of the MENA market and share it with a market affine programmatic framework to maximize the inventory exposure and benefit from higher CPM offers.
Identifying the rights partners for demand and supply and optimizing monetization will be the main challenges to define the right value chain for the OTT Advertising services in the region.
That’s all for today, the potential of OTT & CTV Advertising in MENA.
See you online next week. Until then, enjoy the new 22 free Digital Channels on Shahid.
Whenever you’re ready, there are 3 ways I can help you with:
If you want to learn more about OTT in MENA, I’d recommend starting with my market report:
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