TORONTO—Although Canada is behind the United States in the adoption of addressable linear television advertising—owing largely to inadequate set-top boxes—that’s going to change quickly. “Disruption is here” in the form of Netflix and other OTT providers, says Rich Astley, Global Chief Product Officer of GroupM’s Finecast agency.
Canada is a “fascinating market and for many reasons,” Astley says in this Beet.TV interview conducted by Furious Corp.’s Ashley J. Swartz at last week’s Future of TV Advertising Forum in Toronto. Foremost among those reasons is that Canada has one of the world’s highest rates of pay-TV subscriptions, at some 85% to 90%.
“So that means obviously you’ve got boxes in living rooms, in pretty much every living room in Canada. Which is a pretty good base to start for an addressable TV business,” Astley explains.
The challenge is that many set-top boxes are older-generation devices not equipped with modern ad-serving capabilities. Currently, Ericsson and Comcast are rolling out new boxes with all of the latest technology.
“That’s going to change a lot because it’s going to create a new universe of addressable boxes in Canadian homes and we hope that will scale pretty quickly,” Astley says. “Where there’s been a lot of VOD inventory available in Canada historically but with no real ad insertion capabilities, suddenly that will unlock over the next year or so.”
Until quite recently, Canadian broadcasters have not really been under “a huge amount of threat from international distribution businesses,” he adds, but this year and going into next year “the threat is very real.”
Netflix adoption in Canada is “incredibly high. We’ve seen OTT start to grow massively.”
Launched a year ago in the U.K. to serve as a single access point to inventory across different broadcasters and operators, Finecast sees three pillars to the success of addressable, with an ecosystem being the foundation. Those are advertiser demand, content distribution and content.
“We think collaboration across those three areas is really important because what a marketer really wants is scale against unique addressable segments,” Astley says. “To achieve that scale you’ve got to collaborate on data and you’ve got to collaborate on a multi-broadcaster basis to really achieve that scale.”
While the transformation in Canada won’t happen overnight, “the change is there and I think over the next six to twelve months, we’ll start to see some pretty interesting developments.”