Smart TV and
Multi-screen
Advertising:
Prospects for 2012
In-depth analysis
addressing the major
technical challenges,
investment opportunities
and innovations that
are changing advertising
in the connected era
By Lisa Roner and
Tom Sapsted
With Insights from:
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Introduction
With smart TV revenues set to reach $95 bln by 2015 and 15 bln
video enabled connected devices predicted by 2020, advertising
on Smart TV and across multiple platforms will inevitably mean
big business. The opportunities are endless. That being said,
advertisers, broadcasters and technology vendors are exploring
this nascent industry only tentatively.
Last year alone $29 billion was spent on TV advertising. On
online video advertising a further $3.1 billion was spent. Online
video ads are expected to grow 20% in 2011 and then average
20% global growth through 2016 [Magna Global]
Huge problems hinder the growth of the Smart TV advertising
market. The move away from linear broadcasting means the
industry must adapt.
With the new opportunities on Smart TV and across multiple
devices, broadcasters, content owners, TV manufacturers
and advertisers are changing their strategies, adapting to new
technologies and offering new services. This can only mean
increased exposure for advertisers- new ways to reach the
masses.
Research covering 124 advertisers across 16 major industries
discovered that there is experimentation with advanced ad
placements [Forrester]. Nearly half of the advertisers said they
were testing or planning to test advanced TV ad placements in
the next 12 months via platforms such as video on connected
TVs. All the signs are there: advertisers are now tuning into the
opportunities.
Despite these remarkable figures uptake with Smart TV
and multi-screen advertising has been tentative at best.
Fragmentation is a massive deterrent for investment, increasing
scale and reach needs to be a priority, creating an effective
business model is now vital.
Questions need to be answered. How to form effective
partnerships be formed between advertisers, broadcasters
and the leading technology players? How can we overcome a
fragmented market? How can we build a business model that
suits both advertisers and publishers alike? What can be done to
get the reach and targeted style commercials that advertisers’
desire? What will the tablet mean for broadcasters and
advertisers? How do we get investment from the major brands?
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
The Smart TV and Multi-screen Advertising Summit takes
place on 13-14 November in San Francisco will bring together
leading content owners, broadcasters, advertisers, brands, OEMs
and platform providers to allow you build effective business
models and increase scale and reach for innovative advertising in
the connected and multi-screen TV era
Ahead of Summit, Smart TV Insider spoke to four of our speakers
who have kindly given their thoughts on the most important
questions:
• What are major technical challenges that are currently
hindering the growth of Smart TV and Multi-screen
advertising?
• What are the new and exciting innovations with Smart TV
advertising?
• How can we encourage investment form the major media
buyers, advertisers and brands? What needs to be done?
• What is the forecast for Smart TV and multi-screen
advertising in the future? When will widespread adoption
take place?
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Expert Speakers:
Michael Bologna, Director, Emerging Communications,
GroupM
Mike Bologna, Director of Emerging Communications at GroupM
is known throughout the industry for his expertise in the field
of digital communications. Mike’s primary role is to assist in
the development of marketing and advertising applications
for GroupM clients on advanced digital platforms, including
Addressable Television, interactive iTV, video on-demand, DVR
and wireless; he has handled key digital campaigns for American
Express, Conaga Foods Paramount, Mattel, and AT&T.
As more and more clients choose to explore these new digital
platforms, Mike helps them identify suitable partners and
manages their initiatives to maximize learning, ROI and client
satisfaction.
Mike has been featured on Television Week’s Hot List as one of
the top 10 players, age 35 or younger, who are making a mark
on the industry. He is currently a member of the 4A’s Digital
Video Innovation Committee and regularly authors an agency
newsletter which provides news, views, and insights from the
cutting edge of Emerging Communications.
Dietrich von Behren, VP, Digital Media & Investments, A&E
Television Networks
Dietrich von Behren is Vice President, Digital Media and
Investments for A+E Television Networks. He leads business
development on the west coast, identifying new ventures,
partnerships and investment opportunities for distribution,
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
enhanced revenue and increased engagement for all online
properties within A+Es portfolio. Dietrich opened and manages
the company’s flagship west coast digital media office located in
San Francisco.
Prior to A+E, as founder & CEO of ParentsClick Network, Inc.,
Dietrich established MothersClick.com as the recognized
flagship site and successfully positioned it as one of the world’s
first social networks for the rapidly growing audience of moms
online. ParentsClick Network was acquired in 2008 by Lifetime
Entertainment. Dietrich is a director of the Connected TV
Marketing Association (CTVMA).
Wendell Wenjen, Director of Strategic Alliances, LG
Electronics
Wendell Wenjen is director at LG Electronics Innovation
Development Group located in San Jose where he is responsible
for the US Smart TV advertising business and interactive
TV strategy. Previously he has held marketing and business
development positions at Intel and Acer. Wendell received
Bachelors and Masters degrees in Electrical and Computer
engineering from Harvey Mudd College and an MBA in Marketing
from UCLA’s Anderson School.
Kemal Altintas, Senior Manager Business Development and
Product Innovation, LG Electronics
Kemal is an expert business development and product
management professional focusing on Connected Consumer
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Electronics, Digital Media and Pay TV space. Currently, he is a
part of LG Electronics Innovation Development Group, bringing
new technologies, services and business models to LG Smart TV
products. Specifically, he is bridging the gap between tablets and
smart TVs, introducing social TV experiences to the market and
building cloud based services on the platform.
Prior to LG, he spent time at DivX, working with global pay
TV operators and set top box manufacturers. He spent many
months in Europe talking to operators and manufacturers and
still enjoys jumping on the plane and going there. He holds BS
and MS degrees in Computer Science and an MBA with a focus
on Technology Marketing.
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Michael Bologna: Advertising today operates fairly consistently
across the majority of “traditional” media outlets. In most
cases, media is planned using the content as the surrogate for
the audience and messages are distributed according to an
advertiser’s reach and frequency goals. There are creative and
economic standards for each channel that keep the business
operating on course. Unfortunately, similar standards and
processes do not yet apply when talking about “Smart” TV’s. As
with any “Connected” device, a “Smart TV” presents significant
advertising potential once scale is achieved and some of the
complexities are reduced and potential conflicts resolved.
In an ideal world, the advertiser would have access to the entire
footprint of “Smart” TV’s regardless of the manufacturer; this
would allow them to seamlessly insert their message to reach
the appropriate audience within that national segment. We
would then overlay the necessary interactive features which
would be consistent across the desired footprint. This is not
the case today, as advertisers must cut specific deals with each
manufacturer (Samsung, LG, Panasonic, Sony, etc.) and cobble
these together to generate scale. This process is complex, time
consuming, and costly, and it is currently hindering the short
term growth of the medium.
These challenges are consistent with all of the Advanced
Television business, where the primary technology and
capabilities reside within each system. Advanced advertising on
Comcast is different from advanced advertising on TimeWarner
versus Direct TV versus Dish. In many cases, advertisers express
interest in the benefits of advertising on these platforms, but
are ultimately discouraged from campaign execution because
it is costly to build the applications for all the different systems.
This is the key hurdle we are faced with today in Smart and/or
connected televisions.
Over time, this will improve. Technology will evolve, creating
a consistent platform and multiple consistent platforms equal
scale. This evolution has already begun with companies like
YuMe and Rovi that have cut deals with several of the Smart
TV manufacturers to represent their inventory and act as
an insertion engine for deploying an advertiser’s message
consistently across more than one manufacturer.
Multi-screen viewing is defined as the consumer’s ability to
watch a piece of content on their own terms across a variety
of different screens. There are 7 to be exact: TV, DVR, VOD,
FEP, Tablet, Smart Phone, and Connected TV. This applies to
What in your view
are major technical
challenges that are
currently hindering the
growth of Smart TV and
Multi-screen advertising?
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
programming that originated
on television as well as non-
TV based video content that
was produced and deployed
specifically for non-linear
formats.
Today, our biggest challenge is
that there is no single source
that measures the viewing
of a piece of video across
the multiple screens in a
consistent manner. Multiple
data sources like Nielsen and
ComScore are used to measure each medium individually, but
it is currently not feasible to measure the sum total of all video
viewing, specifically when it relates to tablets, smartphones and
connected TVs.
Multi-screen viewing is a good thing because it gives viewers
the ability to watch what they want, when they want, however
they want, and on whichever device they choose. It benefits
advertisers, because it allows us to get our message out to a
myriad of different consumer targets, regardless of their viewing
habits. The number of alternative screen viewers continues to
grow, however, for efficiency’s sake, we need consistency of
measurement so that the advertiser can achieve an accurate
count of a campaign’s impressions, reach, frequency, and
unduplicated audience across all screens.
Dietrich von Behren: Technical challenges are actually
secondary to marketplace pressures. The primary issue for Smart
TV and cross-platform advertising is audience size. While digital
consumption is growing rapidly, the numbers are still greatly
outweighed by broadcast. However, given the adoption curve of
connected devices and future projections, advertisers will soon
see more viable sales opportunities and should start considering
fully integrated campaigns.
Secondly, as the Smart TV and multi-screen opportunity
develops, the ad industry and content distributers will define
standards and measurements which will both improve and
encourage growth around social engagement and experience.
Kemal Altintas: Generally, there are no major technical
difficulties right now. It’s more an issue that there are not
many examples yet. This lack of experience is the biggest
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
challenge right now. But in terms of technical difficulty, making
the two devices talk to each other is possible today. Two-
way communication channels on the cloud and syncing to
applications and devices is possible. So I don’t really see a major
challenge in terms of technology. If anything, it’s about settling
on a standard technology that everyone agrees upon. But
otherwise, I think the technology is almost there.
Wendell Wenjen: In terms of the Smart TV based advertising, I
concur that there are very few major technical challenges. LG
launched an advertising service last November on our Smart TV
platforms. And in March, we launched the second generation
of that. Other manufacturers have done similar initiatives.
We are continuing to work on new types of ad units that are
more engaging and more immersive. There are some technical
improvements that allow multiple video screens to be shown
simultaneously, but we’re in the very early stages of developing
these types of ad experiences. I think that as advertisers and
agencies get more experience in trying out different concepts,
and testing and measuring their effectiveness at audience
engagement and increasing brand awareness, those kinds of
experiences will be more common.
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Wendell Wenjen: We’re in the very early stages of these
kinds of advertisements. I think right now we’re seeing what’s
been adapted from the Web and online worlds shuttled
to the connected TV and multi-screen. Things like banner
advertisements, pre-roll and mid-roll video advertisements and
different kinds of interactive advertising models are beginning
to be seen on these devices. What’s very interesting now is that
we’re starting to see the TV and tablet paired. That content
can be pushed from one device to the other. Different kinds of
interactivity can be placed on the device type that most easily
provides a user interface for interactivity. And there are new
types of technology under development to detect the kinds of
content being viewed on the TV in order to provide relevant
recommendations and companion content, and doing that
relatively automatically. Those are interesting areas that we’ll
start to see expand in the next year or so.
Kemal Altintas: I think the device types have their own distinct
advantages. For instance, TV is a larger screen, and by definition
is a device for viewing content. But mobile devices are very good
at interaction - you can touch it, you can do gestures…shake it
even - and it will respond in a certain way. I think a combination
of the two has advantages. Depending on what you want to
achieve, or which device you’re focusing on, you can create
a lot of great experiences. For instance, if the focus is on the
mobile device, you can continue to interact on that one while I’m
simultaneously showing a video on the TV. Or vice-versa, while
your attention is on the big screen TV, you can start showing
interactive advertisements on the second screen. If the user
chooses to interact with it, it’s always in their hands. They also
can put it aside for awhile without interrupting the main content
on the big screen. I think the real key is a pairing of the two
devices. But we’re really at the early stages. We don’t necessarily
understand all the possibilities or opportunities out there. We’re
just scratching the surface right now.
Dietrich von Behren: I believe the real excitement for advertisers
tapping into the new digital platforms comes around contextual
targeting and leveraging time-based meta data, which is being
built out by content providers and other services. New revenue
channels and real-time commerce opportunities are going
to explode with Smart TV and second-screen interactions.
The unique ability for advertisers and marketers to increase
brand awareness through more meaningful engagements with
consumers—reaching them at the right time, while also being
able to measure campaign performance—is driving the industry
evolution.
Smart TV and multi-
screen possibilities with
advertising are endless,
what are the new and
exciting innovations in
this space from your
perspective?
Smart TV and Multi-screen
Advertising: Prospects for 2012
Smart TV and Multi-screen
Advertising Summit
13-14 November, Hotel
Kabuki, San Francisco
Build effective business models
and increase scale and reach
for innovative advertising in
the connected and multi-screen
TV era
www.smarttvsummit.com/advertising
Michael Bologna: Smart TV’s offer advertisers a very powerful
capability - the ability to make a national 30-second commercial
interactive. Providing viewers with the option to spend more
than 30 seconds with an advertiser’s brand is something we’d
love to offer, but we currently do not have the functionality to
do so on a national basis. A Smart TV has the ability to read an
embedded code, which triggers interactivity on a 30-second
commercial. This capability allows a viewer to click on the TV
spot and link through to an enhanced advertising experience,
which provides viewers with the opportunity to engage more
deeply with the brand through additional video content or a
game.
This presents a great potential value to advertisers, however, the
key will be, again, for manufacturers to make the execut