The Liberty Global-owned company unveiled its UK red-button offering last year, intended to challenge Sky's dominance of the iTV advertising market.
However, industry sources suggest that the Chellomedia Interactive UK business unit is now being relocated to the Netherlands to focus on advertisers in other European territories.
Chellomedia Interactive provides brand-owners with a range of red-button advertising applications spanning digital satellite and digital terrestrial TV. The company also sells the bandwidth necessary for brands to launch iTV campaigns.
Last November, Turner Broadcasting signed a deal with Chello Interactive to design, publish and manage iTV services for its Cartoon Network, Cartoon Network Too and Boomerang channels in Europe. Channel 4 also uses its technology to run red-button activity on the Sky platform.
It is not known whether these agreements will be affected by Chello Interactive's decision to pull out of the UK market. The company was unavailable for comment as Marketing went to press.
Sky's dominance of the red-button market was first challenged in 2006 when Emuse launched an iTV service allowing advertisers to run campaigns simultaneously across digital satellite, digital terrestrial and mobile platforms.Since then, it has worked to reduce the cost of iTV ad campaigns to encourage brands to experiment.
Chellomedia is the content division of Liberty Global. It provides iTV applications and services for distribution on TV and broadband platforms across Europe