Advertising on connected TVs is continuing to improve, as Rovi late last week announced a new polling feature in its Rovi Advertising Network. Jeff Siegel, SVP, Global Media Sales, told me that this is one of the top capabilities advertisers have been asking for. Advertisers will typically seek a viewer's opinion on something and as a reward will offer a coupon or other incentive.
Rovi is a key player in the budding connected TV advertising market, as it both powers and sells ads for connected TV manufacturers Sony, Samsung, Toshiba, Panasonic. NPD recently estimated that 27% of TVs shipped in Q1 '12 had Internet connectivity. However that number can be a little deceiving, since not all these buyers will actually connect their TVs. Jeff explained that Rovi breaks the TV market into four buckets: total number of TV sets shipped, the percent of these that are connectable, the percent of these that are actually connected, and finally what they are used for.
Jeff said Rovi's advertising is focused on the number that are actually connected. Jeff wouldn't disclose what this amounts to, except to say it's now "in the millions" (for Rovi's purposes, this does include connected Blu-ray players, but doesn't include TVs connected via gaming consoles, digital media players, etc. which is a far larger universe).
One of the challenges of advertising on connected TVs - as with any new medium - is gaining sufficient critical mass to attract the attention of advertisers. Jeff agreed that up to a year ago this was an issue, but says it no longer is. In fact Jeff said that connected TV impressions have grown 30% since beginning of year (though he wouldn't disclose the number) and the connection rate for connectable TVs has increased as well.
Rovi offers 23 different types of ad units, which today are mainly static or lightly animated and Flash-like. Ads often appear on SmartTVs' start screens from which users navigate to available apps. Rovi also powers millions of pay-TV users' electronic programming guides, which also provide ad inventory. When users click on an ad they're often then taken to a richer mini-site with additional features including video.
Jeff said that the click-through rates for these ads are stronger than found with online display ads, and that that time spent within the subsequent mini sites is also strong. Separately, research from YuMe and Frank Magid in August found that 90% of connected TV viewers notice ads and 66% of them are likely to interact.
Advertising on connected TVs is still in the very early stages. But with forecasts for growth in purchases and deployments strong, coupled with early indications of acceptance by consumers, this is a part of the market poised to gain momentum.