Introduction
A recent analysis by GroupM and analytics company iSpot has uncovered an expensive problem for advertisers: commercials on connected TVs persist even when the television is turned off, resulting in an estimated $1 billion per annum in squandered advertising spend. Conducted in June 2022, the study discovered that one main contributor to this issue was external devices providing streamed content, as bid requests remained active even when the TV was switched off. This phenomenon has led to a significant portion of marketing budgets being wasted on ads that never reach their intended audiences. To combat this problem, advertisers and ad tech companies must work together to develop more accurate metrics and strategies that account for these ‘ghost impressions,’ ensuring that ad spend is optimized for meaningful reach and engagement.
Smart TV Apps vs. External Devices
Interestingly, smart TV apps did not exhibit this concern, leading purchasers to examine their advertising investments more precisely to guarantee that ads don’t run while the TV is off. This problem underscores the obstacles advertisers encounter in the streaming video market, where advertising technology and deal arrangements are primarily geared for linear television or internet video content, not a blend of both. As a result, advertisers are now looking to optimize their strategies to ensure they effectively target their desired audience in this hybrid environment. This includes developing a deeper understanding of ad placements, working closely with smart TV manufacturers and platforms, and constantly adapting to the ever-evolving landscape of streaming and linear TV consumption.
Addressing the Issue and Improving Results
Advertisers are proactively addressing this issue, although opinions regarding its cause differ. MediaMonks observed a significant reduction in ad occurrences with the TV off after assessing the issue and prioritizing direct arrangements with content owners. Matthew Kramer, Head of Brand Investment, noted that TV-off ad instances have decreased to a low single-digit percentage. This improvement can be attributed to the collaborative efforts between advertisers, content owners, and technology providers to pinpoint the root of the problem and develop strategies to minimize its impact. As the industry continues to evolve, these key players aim to maintain transparency, open communication, and data-driven solutions to further reduce TV-off ad occurrences and enhance the overall viewer experience.
Popularity of Smart TVs and Future Concerns
As smart TVs’ popularity grows, industry experts debate whether TV-off advertising will be a persistent concern. Smart TVs have experienced a significant rise in market share compared to external devices, with viewership on the former increasing by 31% from Q2 2021 to Q2 2022, while connected TV device viewing expanded by only 7.8%. This trend indicates that more and more consumers are gravitating towards the convenience and integration offered by smart TVs. However, the increasing dependence on these devices also raises concerns regarding TV-off advertising, as data collection and targeted advertising practices may become more invasive.
The Shift Towards Smart TVs
The general shift towards smart TVs, where ads are less likely to play when the TV is off, may help ease some anxieties related to lost ad revenue. Moreover, the integration of streaming platforms and targeted advertising on smart TVs can potentially generate new avenues for revenue. As viewers continue to transition from traditional cable or satellite TV to connected devices, companies will need to adapt their marketing strategies to ensure visibility and reach in the ever-evolving landscape.
Conclusion
In conclusion, the advertising industry faces significant challenges as the consumption of video content shifts towards a combination of streaming and linear TV. The costly issue of commercials persisting on connected TVs when they are turned off highlights the importance of collaboration between advertisers, content owners, and technology providers to optimize advertising strategies. As the popularity of smart TVs increases, industry players must continue to innovate and adapt to this dynamic environment to minimize inefficiencies and maximize return on advertising investment.
FAQs
What is the issue with ads on connected TV devices?
The issue is that commercials on connected TVs persist even when the television is turned off, resulting in an estimated $1 billion per annum in wasted advertising spend. This occurs because bid requests remain active even when the TV is switched off, causing ads to never reach their intended audiences.
Why are smart TV apps immune to this problem?
Smart TV apps do not exhibit the same issue, as they seem to have better mechanisms in place to prevent ads from running when the TV is off. This has led advertisers to examine their advertising investments more precisely and prioritize direct arrangements with content owners, thus optimizing their ad placements on smart TVs.
How are advertisers addressing TV-off ad occurrences?
Advertisers, content owners, and technology providers are working collaboratively to pinpoint the root of the problem and develop strategies to minimize its impact. As a result, TV-off ad occurrences have decreased significantly, indicating the effectiveness of their data-driven solutions and transparency in communication.
What is the impact of the increasing popularity of smart TVs on this issue?
As the popularity of smart TVs grows, it is expected that TV-off advertising will become less of a concern. With viewership on smart TVs increasing and the integration of streaming platforms and targeted advertising on these devices, companies now must adapt their marketing strategies to ensure visibility and reach in the evolving landscape.
What is the overall impact of the shift towards smart TVs?
The general shift towards smart TVs may help alleviate some concerns related to lost ad revenue, as ads are less likely to persist when the TV is off. As viewers continue to transition from traditional cable or satellite TV to connected devices, companies will need to adapt their marketing strategies to ensure visibility and reach in the ever-evolving landscape.
First Reported on: adweek.com
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
