Part 1: The CTV Landscape 

By Walid Ramadan, GM Experiences, MMP World Wide 

Looking At the Global Picture & Where MENA Stands – “Demand is High, But Supply Is Low”

When budgets start to get squeezed, marketers usually fall back on safe and superficial ways to get their message across.I don’t see this region falling into this trap. I think brands are doubling down on finding new ways to connect in a crowded landscape. 

CTV advertising, in particular, is gaining traction. However, the problem we are facing in this market is limited supply. The demand is already there as the shift from linear drives CTV audience growth, and as it matures into a performance channel, this gap is only going to widen.

Already in other markets we’re seeing better measurement and increased user preference for ad-driven streaming over subscription services accelerating the growth of CTV advertising. Comcore’s 2022 State of Streaming analysis found a 29% increase in US households streaming AVODs compared to SVODs 21% increase over the same period. 

Consumers have always been price aware when it comes to getting the best deal and in this challenging economic climate, it has become even more important. For marketers, they can see the potential with CTV advertising to connect with new audiences, increase engagement and drive a higher lifetime value (HLV). 

A report by AppsFlyer found that 98% of businesses think CTV advertising will overtake mobile advertising spend. 25% of those surveyed believe it will happen over the next 2-3 years. I can’t see that timeline working out for this region given we are still so mobile dominant, but in terms of opportunities for growth, the appetite from brands is there. 

In the UAE, the video-on-demand market is expected to surpass a value of $162 million this year. By 2027 user penetration is expected to rise to 22%. Everything points to perfect conditions to leverage the next phase of TV advertising, but first we need to overcome the challenges. 

Last year, The IAB Task Force produced a report outlining the current MENA OTT and CTV ecosystem and its potential. Some key stats here: There are over 50 OTT services across MENA, 17 provide advertising opportunities, 13 have CTV apps, of which 7 currently offer advertising. In essence, CTV is becoming a channel to seriously consider, even with limited inventory and few programmatic opportunities right now. 

This won’t always be the case, particularly as more programmatic options come into play and brands begin to explore the full capabilities of digital advertising across different screens. 

I think there’s also a need to simplify the OTT offering; something highlighted in the IAB’s research too. Today there are seven different business models (SVOD TVOD EST AVOD Hybrid AVOD/SVOD FAST Ad-Supported SVOD) whereas in the future, there will be just two: free and subscription. 

Within each, the delivery methods will remain linear and on demand, split between live channels, ad-supported and ad-free. Interestingly, 86% of consumers are willing to watch ads on CTV if they are relevant to them, which offers an opportunity for cross collaboration between brands and streaming platforms to create bespoke content. 

You only need to look at the leaps being made in the gaming world right now to understand the CTV advertising potential: Immersive solutions that fit seamlessly into gaming environments. Innovative formats, such as native in-game, in-menu, and rewarded video placements, that allow for worldwide reach. And as technology continues to evolve, more possibilities will come. 

Smart TVs may rank highly for brands to prioritize, but given this region’s heavy investment in gaming, it makes sense to explore a multi-channel strategy here to widen reach and improve conversion. 

Ultimately, as with any developing technology, we’re learning as we go. I think we’re entering a very interesting time for CTV advertising in this region, as the desire to connect in more ways across different channels intensifies and advertisers look to technology to provide the answer in the most efficient and cost-effective way possible.  

In Part 2, my colleague Romit Gharat will go further into how technology is shaping the regional CTV landscape and the challenges and opportunities that come along with it.