Smart TVs are Driving the Evolution of Television

Smart TVs drive the evolution of TV data

TV is preparing itself for the next great chapter in its already rich history. Thanks to the proliferation of smart TVs—and the vast amount of useful TV data that they can provide—television has an opportunity to position itself prominently in the digital future and continue to be an immensely powerful platform for advertisers.

While television is certainly at a crossroads, given the rise of cord-cutting and streaming services, there’s no question that TV is still one of the most effective mediums for advertisers because of its ability to engage and connect with consumers. In 2016, Americans spent an average of 4.3 hours per day watching television, and with the influx of over-the-top content, the numbers are only increasing. TV will command an astonishing $72.2 billion on ad spending this year alone, and that number is predicted to rise over the next several years.

TV viewing data

Compared with digital platforms, however, television’s audience targeting and real-time data collection capabilities have been limited. For advertisers, the digital solutions that are available for TV lack scale, household-level addressability, and real-time reporting. Until recently, the available technology was unable to provide a viable solution for TV to reinvent itself at scale and truly unlock its digital future.

For years, savvy advertisers have been clamoring for a way to customize TV campaigns the way that their digital counterparts can. The technology has now caught up with those ideas. Spark, a platform that provides next-generation TV through analytics, addressability, and interactivity, allows TV to function as a digital medium and empowers broadcasters and cable owners to find and engage the right audiences at the right times.

The Best of Both Worlds

In the past, leveraging the advantages of digital platforms, such as real-time feedback, accurate measurements, and data-driven audience targeting with the scale of TV, was nothing short of a pipe dream.

Spark allows companies to access real-time viewing data. These more immediate insights allow broadcasters to break down everything from the number of impressions and retention rates to demographics and viewer habits, which, in turn, empowers advertisers to craft more effective marketing strategies and richer content across numerous platforms and devices.

Addressability is one of the cornerstones of Spark. With Sorenson Ad Suite, slated for release in late 2017, national and local broadcasters as well as national cable owners have an incredibly powerful tool that allows them to more effectively reach households by overlaying targeted ads on purchased linear inventory that has been identified as being “replaceable.” This refers to ads that marketers and broadcast companies have agreed to replace in homes in which a smart TV is present. In place of those spots, highly targeted addressable ads are used in exchange for other inventory of equal value at a discounted rate.

Two factors are necessary for these types of swaps to occur: The household must meet an advertiser’s targeting requirements, and the inventory must be categorized as replaceable. Previously, set-top boxes were necessary for the swap to take place. However, with set-top boxes, the TV can be turned off while the set-top box is left on, which can result in ads being swapped when no one can see them. With Spark, software applications within smart TVs simplify the process while allowing these swaps to occur across a vastly larger inventory of addressable ads that are available to national and local broadcasters and national cable owners.

Taking advantage of the most useful aspects of TV and digital advertising, Spark ensures not only premium TV inventory, zero wasted reach, and addressability across screens, but also instant TV data collection for identifying quick solutions.

TV Data in Real Time

Imagine a TV news block that has dropped in viewership month-over-month. With very few changes in the program itself and the competition in the market, it’s hard to pin down exactly what could be going wrong. Using Spark’s TV Analytics Audience Flow reporting tool, broadcasters could put a magnifying glass on specific audience retention rates and get same-day insights to take swift action.

A local broadcaster wants to increase its yield by optimizing the way it monetizes promo spots. If the viewing data shows that a smart TV household is a loyal viewer of its 6:00 news, why not replace a promo with a highly targeted BMW commercial for that household? Instead of getting no money for that impression, the broadcast can charge a significant CPM, especially because the ad exposure data can be linked to purchase or location data.

Perhaps an advertiser is A/B testing two ads within a campaign and would like the winning creative to be distributed to a larger segment of the targeted audience. Spark allows broadcasters and cable owners to measure the impact and present the highest yielding ad more broadly mid-campaign.

In all three scenarios—the first of which focus focuses on real-time analytics while the latter two highlight the potential of addressability—data is collected in real time and ad placement decisions are made within a split second. And with a wealth of anonymized data, advertisers and broadcasters can find any audience they want.

Harnessing the insights behind viewer behaviors is critical, and that makes Spark a necessary addition to every advertiser’s toolkit. Spark’s TV analytics suite has already launched in more than 80 markets across hundreds of channels. The addressable platform is launching later in 2017, at which point smart TVs will be even closer to realizing their full digital potential for broadcasters and cable owners.

Advertisers still feel held back by television’s data tracking and addressability limitations. Spark is changing that and driving television’s digital evolution. The steady convergence of digital advertising with the scale of TV proves that, while television is at a crossroads, smart advertisers will adopt the tools that show them which way to go.

Stefan Maris
Stefan Maris
SVP Product Strategy and Partnerships
With a background in engineering and marketing, Stefan has spent his career taking cutting edge technologies to market. Foremost among those is the Sorenson Media product portfolio. Stefan also helped lead the Phillips Electronics spin-out, Civolution, where he filled roles in project and product management, sales, marketing, and business development.