To Grow Its Ad Business, LG Taps SpotX as Primary SSP

SpotX is now the primary global supply-side platform for LG Electronics as the smart TV maker looks to ramp up its advertising business, which competitors Samsung and Vizio have significantly invested in recently. LG, the world’s second-biggest smart TV maker, invested about $80 million in January for a roughly 60% stake in Alphonso, a TV data and measurement company, according to The Wall Street Journal. Seth Walters, head of smart TV advertising for LG, said the company has taken a “calculated and surgical approach to building” its ad business, but the Alphonso investment and SpotX partnership will act as accelerants to its ad products and offerings. Smart TV makers have been bolstering their ad businesses as they look to capitalize on the growth of streaming. Samsung built its own DSP and has rolled out a new measurement offering. Vizio propped up a sales team in late 2019 and reorganized a year later to bolster its platform business by bringing its data company, Inscape, in-house. Walters joined LG from Roku in late 2019. LG does not disclose the value of its ad business or size of its ad sales team. "My task is helping us establish the technology and capabilities in-house to begin to build an ad business, similar to what you're seeing in the marketplace from a Roku, from Samsung, from a Vizio," Walters said. "We obviously play in a far more premium TV space in terms of the sheer price point of our television. So, we believe that we're delivering an extremely premium and highly affluent audience that would be extremely attractive to advertisers." SpotX began its relationship with LG in the U.S. in the third quarter of 2020, and is expected to extend into Latin America in Q1 of this year and into Europe sometime thereafter. The announcement comes days after Magnite said it will buy SpotX for $1.17 billion to create the largest independent connected TV platform. SpotX is also the primary SSP for Samsung. It has partnerships with Vizio and Roku, and represents supply from streaming media owners including Pluto TV, Sling TV, Xumo, Crackle Plus, Philo, Tubi and FuboTV. Smart TV activity on SpotX’s platform has significantly ramped up over the last year. The company saw an 800% spike in smart TV ad inventory on its platform from March to October 2020. Those devices accounted for 38% of all CTV spend on the platform last year, up from 10% in 2019. “These device manufacturers are becoming much more important than they ever have been in our ecosystem, especially as they do control the glass and the access point for where consumers are now reaching and viewing our content,” said Mike Laband, svp of platform at SpotX. LG has more than 120 million smart TVs activated globally, including more than 20 million in the U.S., the company’s largest ad market, Walters said. As CTV platforms, from smart TV makers to the likes of Roku and Amazon Fire TV, grow their ad businesses and emerge as walled gardens, advertisers will have to buy and plan their campaigns across a handful of separate platforms. While this can be a cumbersome task, Walters said it actually can offer a complementary approach to targeting. “If you're reaching a Samsung household or reaching LG household, more often than not it's additive,” Walters said. “And I think that advertisers have begun to recognize that, and realize that in order to effectively accumulate reach across the [over-the-top] landscape, they need to work with smart TV properties, like LG, and buy from them directly in order to best accumulate reach across their footprint.”