ITV PLC (LON:ITV) has inked a deal to set up its own automated technology system that will allow advertisers to buy and target ads on its online video-on-demand (VOD) site, ITV Hub.
The exclusive deal with ad technology firm Amobee will see ITV provide a platform that allows ad buyers complete control over where their ads will appear on programmes viewed on the VOD platform.
READ: ITV ad revenues to fall in 2019 as Brexit uncertainty weighs, Liberum predicts
Automated targeted advertising involves using data around audience characteristics (e.g. age, location, gender etc) in order to place adverts on content that is aimed at that demographic, thereby maximising exposure.
Carolyn McCall, chief executive of the FTSE 100-broadcaster, said the agreement would accelerate the company’s development of its VOD advertising capability and “create an industry standard” to match the system for linear TV advertising.
"This agreement enables ITV to respond to our customers' needs of frictionless targeted advertising in a brand safe environment complementing what they currently do on our channels.”
The move to targeted online advertising forms part of McCall’s plan to bolster the companies content production arm as well as investing more heavily into digital and online technology to help counter a decline in revenues from TV advertising.
Deal will help VOD revenues “significantly”, says broker
In a note to clients, analysts at broker Liberum said that the deal could help ITV “significantly” in its attempts to grow revenues generated from its VOD platform.
“This should be a significant help in ITV’s attempts to increase its share of the online video advertising market, which already makes up an estimated 10%> of ITV’s advertising spending and which we think will grow 35% in [2019].”
The broker added that the fully automated and programmatic platform would be “more efficient” in selling and targeting adverts compared to the current process used for ITV Hub which was “a very manual process”.
Investors, however, seemed fairly unenthused with ITV’s shares down 0.9% at 132p in late morning.