RTL Group has acquired 18.9% of ad-tech company VideoAmp for a sum of $15million. VideoAmp is a US-based online video advertising company which supports cross-screen data. With this acquisition, VideoAmp will now be part of RTL’s online-video arm RTL Digital Hub, working alongside with its ad-tech businesses, SpotX and Clypd.
RTL is one of the largest TV companies in Europe, active across Germany, France, Spain, Benelux and Central & Eastern Europe in broadcast TV, and globally through content production and online video.
RTL’s acquisition for VideoAmp came as no surprise. The company generates nearly 60% of its revenue from advertising sales. Revenue from the digital business went up 26.6% to $326million in the 2014 financial year. IHS expects online video advertising revenue in Europe to grow 19.1% in 2015 and 14.9% in 2016.
Online video is a key pillar of growth for RTL Group, and at the heart of its digital strategy. In order to consolidate its digital activities that span across YouTube multichannel networks and advertising technology, the company launched RTL Digital Hub in June 2015 as a central node to manage its portfolio and drive future investment. Key assets of the hub include two YouTube multi-channel networks (BroadbandTV in 2013 and StyleHaul in 2014) which cost RTL a total of $163million. Since 2014, the German broadcast group has been making a series of ad-tech investments. It first acquired video supply-side platform SpotX in July 2014 for $144million and then linear TV programmatic ad platform Clypd in April 2015 for $19.4million. With this investment, RTL Group now put on the table a complete set of online video advertising capabilities. Most importantly, RTL Group is now able to control not only TV audiences but also non-linear screen video consumption through the data VideoAmp provides. Subsequently, this will allow a more precise targeting for advertisers across multiple devices and screens.
Though broadcasters still stay true to their business focus of broadcast and content, many have forked out budget for digital video. Modern Times's TV3 acquired ad-tech company SmartAD in April 2015. Outside Europe, the top two Australian commercial broadcasters Seven and Nine have highlighted programmatic push as key on the 2016 strategy. As the capability of ad-tech helps to monetize online contents, broadcasters will continue to invest in that as they continue to shift their contents to the non-linear screens.