• Advertising on Connected TVs Will Be the Next Battleground

    With the launch of Samsung AdHub yesterday, the next big battleground for video advertising is shaping up to be on connected TVs. That makes a lot of sense because as more video viewing occurs on connected TVs (or "Smart TVs as they're also called), audiences will further fragment from traditional linear TV. Connected TVs are projected to account for 155 million units by 2015, or 54% of all flat-panel TV shipped. By then over 500 million connected TVs will have been shipped. In 2011, approximately 27% of TVs shipped will be able to connect to a network. Advertisers have no choice but to figure out how to reach all of those eyeballs and TV manufacturers are now beginning to lay the groundwork.

    The new Samsung AdHub spans multiple types of ad units and viewer behavior. Display ads placed on the home screen offer users the ability to click into a microsite for more information, to view videos or click into the app itself. Samsung will work with third-party ad networks and providers, including deals with YuMe and with Rovi which were announced yesterday.

    Samsung will participate in YuMe's Connected Audience Network and will host an inaugural "TV Brand Lift" study, powered by Vizu. The study's goal is to assess consumers' perceptions of ads shown on Samsung Smart TVs. The charter advertiser for the study is State Farm, which will use its ads featuring Green Bay Packers QB Aaron Rodgers. Samsung and Rovi will expand their existing partnership to leverage new Rovi ad capabilities such as Request for Information, embedded QR codes, social networking and TV commerce.

    The Samsung AdHub initiative follows LG's announcement last November that it was integrating YuMe's ad technology at the firmware level of its Smart TVs, resulting in increased ad performance. LG is also integrating with YuMe's Connected Audience Network to gain immediate scale and offer monetization to its app developer partners. No doubt other manufacturers will follow with their own ad initiatives.

    App developers are being barraged by connected TV and device makers who are eager to feature their apps in order to create promotional buzz and drive unit sales. Ad enablement is so essential because after years of hype around interactive TV, app developers have grown wary and are looking for signs that this time around there's genuine monetization potential.

    Going in its favor, connected TV makers are capitalizing on the tailwinds of massive online video viewing, app proliferation and consumer adoption of interactive devices. All this suggests there's good reason to be optimistic that connected TVs are going to find traction as an important advertising platform. No doubt there's going to be an escalating battle among TV manufacturers to attract brand spending. It's still very early on, and while nobody savors the prospect of more advertising, if the systems are built with the right kinds of targeting and interactivity, connected TVs could usher in a substantial change in what viewers come to expect from on-screen advertising.