The big shift: Smart TV manufacturers such as Vizio and Samsung are creating ad-supported streaming channels in their OS to compete with Roku and Amazon.
Share of U.S. TV households with a smart TV according to Nielsen:
1) 2018 – 39%
2) 2019 – 47%
The goal for Smart TV manufacturers: The profit margin on a smart-TV is roughly 6% (ex: $30 of profit on a $500 smart TV) which is leading the manufacturers toward other revenue streams such as addressable advertising.
The benefit for consumers: Cheaper smart TVs and more free video content that is supported through advertising.
The benefit for advertisers: More addressable advertising inventory to reach consumers.
Quote from William Wang – CEO @ Vizio:
“For us to sell more TVs, we need to have better TV content. We need to have more free content,”
TV content + digital attribution: Addressable advertising through a smart TV is able to provide digital like attribution (purchases, store visits, etc.) through a technology called ACR.
What is ACR? Automatic Content Recognition (ACR) is a technology that identifies the content that is playing (TV show, etc.) based on what it hears. It is alternative to collecting viewership through panels (Nielsen, etc.) and/or set-top box data (ComScore, etc.).
The players in ACR:
1) Nielsen Gracenote
2) Inscape
3) Samsung Ads
4) Roku
5) Alphonso
6) Samba TV
Advertiser plans for advanced TV over the next 12 months according to the IAB:
1) Increase – 59%
2) Stay the Same – 38%
3) Decrease – 3%
Podcast: How We Get To Better Measurement
More #1: Waiting For Addressable: Why It’s Taking So Long For The Industry To Get Its Act Together
More #2: Paul Haddad Explains How a4 Is Inventing the Way Advertising Works
