connected tv
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White Paper by IAB UKTRANSCRIPT
Internet Connected TVs: The Next Living Room Evolution
By Kathryn Meadmore
A report into the connected TV challenges faced by brands
Copyright © Adjust Your Set 2011
Introduction to WhitepaperThis whitepaper has been produced by Adjust Your Set,
the leading multichannel video agency, and the IAB
(Internet Advertising Bureau), the trade association for
online and mobile advertising. Industry research was
conducted via an online survey of the IAB’s members.
The results from over 200 respondents are included
throughout this paper to illustrate industry reaction
to internet-connected televisions. This paper aims to
understand the issues and challenges associated with
the new platform.
About Adjust Your Set™ Adjust Your Set is the leading multichannel video agency
specialising in content across online channels, connected
TVs and social networks. Clients include Marks &
Spencer, Thomas Pink, Debenhams, BA, The Royal Opera
House and Liz Earle. Founded in 2008, Adjust Your Set
delivers an end-to-end communication service using
video as the platform to provide a constant and consistent
brand engagement.
Adjust Your Set was recently shortlisted as one of the
Media Momentum Top 50 fastest growing Digital Media
Companies in Europe and was named Best Specialist
Digital Agency at the Digi Awards 2011.
For Further information please visit: http://www.
adjustyourset.tv/about-us/
Connected TV Whitepaper
About the IABThe Internet Advertising Bureau (IAB) is the trade
association for online and mobile advertising. With
over 650 member companies, the IAB promotes
growth of these channels, develops best practice for
advertisers, agencies and publishers, and aims to
put digital high on the agenda of every marketer in
the UK.
Online is an exciting and fast-growing
medium and our job at the IAB is to work with
members to ensure marketers can identify
the best role for online and the emerging
mobile market, helping them engage their
customers and build their brands.
Through the dissemination of research
and the organisation of regular events, we aim
to put digital on the agenda of every marketer
in the UK, acting as an authoritative and
objective source for all internet advertising
issues whilst promoting industry-wide
best practice.
1
5
Contents
2
3 The internet-connected TV
4 The current state of the connected TV market
5 Why connected TVs?
6 What is a Connected TV?
8 What’s on the connected TV schedule?
9 Industry reaction to connected TVs
10 How do you find the content?
11 Revolutionising the business model: “Brands as media companies”
12 How does content retain its crown on connected TVs?
13 Could mobiles become the TV remote or our lives?
14 Filling the connected purse
15 Regulating a connected landscape
17 Social TV – ‘like’ it
18 Conclusion
Copyright © Adjust Your Set 2011
7
Connected TVs have gained significant attention
over the last year, and it’s only set to continue. The BBC
launched an updated version of its iPlayer for web-
connected TVs, Sony and Opera teamed up to provide web
browsing capabilities on the platform and Audi launched
the UK’s first web-connected TV campaign to promote its
A7 Sportback range. In addition, recent research claims
internet-connected televisions are predicted to make up
90% of the TV market in the UK by 2014.1
With so much weight attached to the internet-
connected TV, everyone is asking what this will mean
for the TV advertising industry. What will the content
on connected TVs look like? Who will manage this new
connected landscape? And more importantly, how long
do brands sit back and wait until they make the leap into
connected TVs?
Also, and perhaps more importantly, will anyone
connect their TVs to the web? While the increase in sales
of internet-enabled devices is undeniable, in order for
audiences to want to plug their device in there must be a
compelling content proposition. This must not be the sole
responsibility of the broadcasters; brands too must play
their part.
The internet-connected TV
Research from several sources, including
Ericsson, clearly shows a growing uptake in
connected TV purchases around the world,
anticipating 50bn connected devices globally
by 2020.2 The tech-savvy consumer is again
leading the way and technology itself is forcing
the industry to reassess their business models
as audiences migrate away from traditional
channels. 72% of IAB and Adjust Your Set survey
respondents disagreed with the statement
“internet-connected TVs are a passing fad and
will not survive the constantly evolving digital
landscape”, but as one respondent said, “this
sector is in its infancy and needs to gain more
momentum from recommendation and information
on advantages, before consumers start to follow
the trend.”
The questions raised from the research
and discussed within this paper, highlight the
uncertainty that still remains across the industry.
As this report shows while many brands, agencies
and broadcasters agree that it’s an exciting platform
that warrants investigation, many still cite various
challenges facing them and only a small percentage
will be implementing a strategy now or in the
near-future.
?
3
“The questions raised from the research and discussed within this paper, highlight the uncertainty that still remains across the industry.”
1 Source: Furturesource Consulting March 20112 Source: Ericsson March 2011
Copyright © Adjust Your Set 2011
9
With the launch of YouView, a joint venture
between the BBC, ITV, C4 and others, as well as
Google TV, Apple TV, connected set-top boxes and
manufactures like Samsung and LG with Smart TVs, the
major broadcasters are already setting up to deliver a
completely new channel into the home. This will provide
significant functionality for advertisers and an entirely
new way for brands to communicate with consumers.
There are still many unknowns about this new market,
not only what the content will look like and the strategies
in place, but how brands and media owners will monetise
the new connected-landscape.
There have been various statistics recently
released citing the growing uptake of internet enabled
devices. Informa expects manufacturers such as
Samsung, LG and Sony to sell a staggering 52 million
internet-connected TVs over the course of 2011 on a
global basis and IHS iSuppli claims that from 2013
internet-enabled devices will out-sell PCs. The range of
products that are already able to connect to the internet
includes set-top boxes, connected TVs, video game
consoles, Blu-ray players and tablets. Collectively, sales
of these devices will surge from 161 million units in 2010
to 504 million units in 2013.3 By 2014, market research
and consulting firm DisplaySearch, has predicted that
123 million internet-connected TV units will be shipped
worldwide annually.
“The rapid uptake of connected TVs should warrant serious consideration from brands on the potential of the platform and future revenue streams to be generated,” said Chris
Gorell Barnes, CEO of Adjust
Your Set.
3 Source: IHS iSuppli4 Source: http://theconnectedset.tv/803/the-connected-tv-opportunity-for-
The current state of the connected TV market
Although the statistics show a growth in
consumer purchase of connected TVs, a case remains
to be proved for those within the industry who
prefer to sit back and wait for a more substantial
uptake in connected TVs until they implement a
strategy. Does more in-depth research need to be
conducted in order to provide further proof that the
newly-emerged platform has significant benefits to
convince many to commit valuable time and spend
on it? Are we facing a catch-22? Is the industry
waiting to see what content is offered first, before
investing in strategies of their own?
60% of new televisions being sold in 2012 are expected to have
Internet connectivity.
Independent research predicts YouView will have a market penetration of 3-4 million by
2014 (high case scenario 8.3million).
Virgin’s new TiVo box will be rolled out to 3.7million customers over the next few years.
TV app downloads are also accelerating: in January 2011 Samsung announced that the Samsung Apps platform, the world’s first app store specifically for TVs, had reached
2 million app downloads. Whilst it took 268 days for Samsung to shift the first million
television apps, it only took 53 days to shift the next million. In May 2011 Samsung
announced that it had surpassed 5 million downloads.
Market place 4
4 Copyright © Adjust Your Set 2011
11
Online video has grown significantly over the
past few years; from home-grown videos of pet cats, to
brand-dedicated website players and channels. YouTube
was the original Grandfather of online video. Started in
2005 it enabled the first uploading and sharing of video
across the internet and became the first aggregator
of content. YouTube established a shared viewing
experience and now video has moved from bedroom
geeks to boardroom level and the power of online
video has shifted. It’s now an expectant part of the user
experience and is the fastest way to reach new audiences
across multiple screens.
For brands, online video has become an
integrated component of the marketing mix; strategies
focus on the easiest and most cost-effective route to
engage with the consumer, and in most cases this
is now video-led. To date the only disadvantage that
online video has had, is its struggle to find a consistent
5 Source: Data from Booze & Co via Gigaom.com July 2011
Why connected TVs?
audience. With so much video content now available
online, particularly via YouTube, and SEO for video
still in its infancy, video strategies have been slow
to evolve. However this is about to change. As
technology evolves, providing more devices and
multiple screens on which to show content on, more
advertising opportunities have arisen. Traditional
TV models make up the bulk of video ad spend
today, with about $160 billion spent worldwide
on broadcast advertising. But the rapid growth of
connected devices will soon add a new dimension
to what the industry has come to know as TV
advertising. Advertising for video on PCs and web
browsers, video delivered to mobile devices and
video delivered to tablets will all grow significantly
in the coming years, and it’s safe to assume that
connected TVs will benefit too. TV is the natural
home for video and thus is a natural fit for video
advertising. Traditional TV won’t lose its share of ad
spend; instead additional revenue will come from
the various new channels that ads can appear on.
In short what connected TVs offer the market
is the ability for brands to connect the massive
offline spend with the rapidly emerging online video
market. TV advertising is about to merge with the
exciting and innovative medium that is online. This
will be happening in living rooms throughout the
world in a very short space of time.
£
5
“In short what connected TVs offer the market is the ability for brands to connect the massive offline spend with the rapidly emerging online video market.”
Copyright © Adjust Your Set 2011
13
“The fact that every manufacturer works on a different platform currently makes it difficult for developers.” Anonymous
survey response
What is a Connected TV?
6
As shown in the statistics earlier in this paper
there are various manufacturers and devices competing
in the connected TV market. It was one of the challenges
cited by respondents in the survey that has limited the
uptake of connected TV strategies so far.
For the sake of this paper we define a connected
TV as the integration of the internet into modern
television sets and set-top boxes, as well as the
technological convergence between TV and computers; it
also integrates the user journey across multiple channels
of content.
What is Google TV? Google TV is a search-based software platform that
combines TV content with internet functionality. Just
as Google’s mobile operating system Android can
be built into multiple handsets, Google TV can run
on multiple connected TV devices including set-top
boxes, satellite boxes and digital televisions. As 75%
of respondents in the IAB and Adjust Your Set survey
believe that content on connected TVs will be found
via search functions, it makes Google’s proposition
seem a likely lead competitor in the UK market. It is
due to launch in the UK and Europe in early 2012.
What is Apple TV?Apple TV is a digital media receiver, or small set-
top box, that allows consumers to use an HDTV set
to view photos, play music and watch video content
that originates from internet services or local
networks. Apple TV now allows content to be bought
from iTunes, Flickr, Mobileme, YouTube and Netflix,
in the US only. Apple has a number of partnerships
with movie studios and television networks, giving
it an impressive content library. Rumours started
circulating in August 2011 that the company will
launch a digital television in 2012.
So who are the main competitors?
Copyright © Adjust Your Set 2011
“There are various manufacturers and devices competing in the connected TV market. It was one of the challenges cited by respondents in the survey that has limited the uptake of connected TV strategies so far.”
157
What is YouView? YouView, formerly known as Project Canvas, is a
proposed open, internet-connected television platform
for the UK market. The venture is a partnership between
four broadcasters (BBC, Channel 4, Channel 5 and ITV)
and three communication companies (Arqiva, BT and
TalkTalk). The platform, which is planning a full launch
in early 2012, will allow consumers access to a range of
third-party services (television channels, radio stations,
on-demand services and internet content) using a
compliant device (such as a set-top box) built
to a common standard and through a broadband
internet connection.
What is a games console?Various games consoles also allow interaction and
integration with online TV. Until now many online video
services were launched primarily with the game console
in mind to meet the demand from users for interactive
video and game play. PlayStation 3 (PS3) for example,
allows catch up TV services and select channels
accessible under a separate TV channel. It also allows
integration with social networking allowing users to
watch and discuss films with other uses, as well as
access to Netflix in the US to stream content. Microsoft’s
Xbox console and subsequent launch of Xbox Kinect
shows a new level of interaction with your TV, even down
to how you purchase products. A recent prototype shown
in partnership with MasterCard allows you to wave your
hands at an icon and select purchases, all from the
comfort of your sofa.
What is a Connected TV?
What is a Smart TV?There are various manufacturers competing in the
‘Smart TV’ market including Samsung, LG and Sony.
Each has the basic functionality of connecting to
the internet, while pushing their own unique user
experience. For example, Sony’s Qriocity Video on
Demand service allows viewers to rent classic films
or enjoy the latest Hollywood blockbusters which
are immediately streamed to the device, whereas
Samsung has launched the Samsung Smart TV from
which consumers can download apps as well as
view content.
What is Boxee?Boxee is a cross-platform freeware Home Theatre
PC, essentially a software application with a user
interface and social networking features designed
for the TV. Marketed as the first ever “social media
centre”, Boxee enables its users to view, rate and
recommend content to their friends through many
social network services and interactive media.
However you cannot currently watch and record live
TV via over-the-air TV, cable or satellite signals.
Copyright © Adjust Your Set 2011
17
When the IAB and Adjust Your Set asked industry
members what kind of content they believe consumers
will engage with, 80% said they feel that entertaining
short-form content will be the most prevalent. This is
followed by interactive content (71%) where consumers
can change the outcome of the video and app inspired
games (61%). YouTube has been an influential force for
online advertising since its launch and with the rise of
streamed video content on internet enabled devices; its
influence is still noticeable. 69% of respondents either
agree or strongly agree that “snackable” branded content
will become more widespread.
Interestingly when asked to rate on a scale
of 1-5 how frequently they thought people will use
their internet-connected TVs for particular activities,
‘watch catch-up TV’ came out as the most frequent and
‘purchase from a retail brand’ least.
“Until now branded content has been produced at the optimum engagement time for consumers, about 2-3 minutes long. However, on connected TVs brands need to up their game, focusing less on video length and more on creating high-quality content to suit the platform that’s both bold and engaging.” Chris Gorell
Barnes, CEO of Adjust Your Set.
Entertainment Interactive Games
80% 71% 61%
8
In order to provide the type of engaging
content audiences will want to watch and interact
with, a clearly defined strategy must be employed
by each party involved in the connected TV market. While broadcasters and production companies
already employ a 360 degree commissioning
approach that allows audiences to engage in
programming content across a range of other
devices and platforms, brands too must develop a
connected strategy. For too long, brands have got by
using different, loosely combined creative concepts
across digital and traditional channels. They will not
be able to use this same strategy on connected TVs;
everything will appear together and unless there
is a completely ‘glued up’ relationship between all
parties involved on the platform, the result will be a
poor customer experience.
For brands, the connected TV should allow
a rejuvenation of the traditional ad break. It will
While purchasing from a retailer appears low, as more connected TV services become available it’s sensible to expect this activity to increase among consumers. Video commerce platforms by Marks & Spencer and ASOS prove consumers enjoy them and this behaviour will no doubt translate to connected TVs.” Jack Wallington, Head of Industry Programmes, IAB.
What's on the connected TV schedule?
To Watch Catch Up Tv
As Entertainment Platform
Participating Via Mobile Phones
Participating With Social Networks
Playing Interactive Games
Surfing The Web
Purchasing From Retail Brands
allow consumers to pause live TV while ordering a
takeaway or a new outfit via their TV or one day even
test drive a new car from the comfort of the sofa via
a remote control and connected TV.
Frequency Of Activities On Connected TVs
Copyright © Adjust Your Set 2011
19
While this paper has outlined the various
connected devices currently available on the market, or
due to launch, and the growth in sales of such devices,
the research carried out by the IAB and Adjust Your Set
found that just 12% of industry respondents currently
have an internet-connected TV strategy in place. The
majority of respondents (85%) are interested in the
advertising opportunities afforded by internet-connected
TVs, but there was still 10% who are not sure when they
will implement a strategy and 22% who say they have
no plans to implement one at all. In addition over a third
of respondents feel that only a budget of up to £50,000
should be allocated to connected TVs; will this be enough
to create the compelling content proposition needed to
persuade the consumer to plug in?
Many in the industry believe the internet-
connected TV trend needs to take off further to warrant
a strategy and challenges facing the industry include
cost, fragmentation of the manufacturing industry and
that there are still other channels, including mobile,
to explore.
“It’s clear the industry considers the platform an incredibly significant leap for online advertising, but it’s also become apparent that like so many other technological developments we’re waiting for the consumer to leap first.” Jack Wallington, Head of Industry Programmes, IAB.
“This sector is in its infancy and needs to gain more momentum from recommendation and information on advantages before consumers start to follow the trend,” Anonymous
survey response
6 Source: http://www.marketingmagazine.co.uk/sectors/features/article/1083901/brands-really-need-media-agencies/
Once internet-connected TVs do take off, survey
respondents feel that the strategy will be in
the hands of the media company (31%). It’s an
interesting development when agencies are
increasingly adapting across the paid, earned and
owned media spectrum. Agencies have always
defined themselves with terms like “traditional”
or “digital”, but with internet-connected TVs the
relationship between agency, brand and broadcaster
will change. We will likely see a more fully
integrated strategy developing within agencies and
even brands themselves acting like agencies to deal
directly with the broadcaster.
Technology has always played a significant
role in the media and marketing industry and 90% of
respondents in the IAB and Adjust Your Set survey
either agree or strongly agree that new technology
is forcing media agencies to reassess their
business models as audiences migrate away from
traditional channels. This again raises the question
from an organisational perspective and the old
relationships of buying and selling. Media agencies
are increasingly being bypassed by ad agencies and
even brands themselves to book ad slots. During
2010’s X Factor the successful Yeo Valley ad was
created and booked by BBH and Yeo Valley with
Fremantle Media and ITV directly. Will brands be
circumnavigating the media industry in favor of
becoming a media company in their own right? But
as Richard Morris, the deputy managing director for
Carat recently said within a feature for Marketing
Magazine about the ‘endangered media agency’;
“now more than ever, brands are going to need help
managing the complexity inherent in media.”6
Industry reaction to connected TVs
60% have had
discussions
85% interested in ad
opportunities
12% currently have
a strategy
9 Copyright © Adjust Your Set 2011
“We will likely see a more fully integrated strategy developing within agencies.”
21
Persuading a consumer to plug in and utilise
content on their connected TV is no easy task.
Consumers are faced with multiple channels and an
array of content at their fingertips. So how does the
industry persuade the consumer, and more importantly,
how will consumers find the content they want?
Industry analysis has shown that consumers are
already purchasing internet-connected TVs and this is
only set to continue. So while brands and broadcasters
develop their content propositions, consumers will likely
continue to view linear TV and likely access additional
information and content via a service similar to the red
button. As the IAB and Adjust Your Set research shows,
consumers will also continue to consume catch-up
content on internet-connected TVs (this was listed as the
most frequent activity by respondents when asked to rate
how consumers will use internet-connected TVs). As the
content propositions develop so too will the ways
consumers access content. They may initially visit
the related app for additional information regarding
traditional TV ads, but eventually a seamless
transition to click-through from ad to branded
content app will develop.
Earlier in the year Audi launched pre-roll
ads for the A7 Sportback, which directed audiences
to the Audi.tv channel via internet-enabled TVs
where they could watch further content. Brands
such as Debenhams already offer video from its
online TV channel on a mobile app. It’s a potentially
small leap from here to an app on connected TVs.
In addition, users will be able to find content via
search functionality on connected TVs, which 75%
of the IAB and Adjust Your Set survey respondents
agreed would be a key method of discoverability.
Following search, 63% of respondents said content
would be found via recommendation, potentially
from social media. Following search functions, 63%
of respondents said content would be found via
recommendation, potentially from social media.
Search Functions Recommendation
75% 63%
How do you find the content?
“As the content propositions develop so too will the ways consumers access content”
10 Copyright © Adjust Your Set 2011
23
As with most industries, as it is in everyday life,
imitation is the sincerest form of flattery. So much so
that brands are re-defining their business models and
taking inspiration from the media industry, in particular
the ways they produce and distribute content. Brands
have had to re-address how they engage across an
increasingly complex media landscape. When the
broadcast industry introduced 360 degree commissioning
and launched Facebook pages, Twitter character profiles
and online competitions alongside programmes such
as Skins, The X Factor and Hollyoaks, it re-defined its
own business model. Now brands need to move
from linear advertising to a multichannel approach.
Where broadcasters have led and won audiences, so
must brands follow with a supporting strategy and
assets to engage consumers.
However, while respondents agree (54%)
with the statement that brands will become media
companies in order to navigate the internet-
connected TV landscape, half (50%) followed this by
saying that both business models will still exist. 22%
disagreed entirely and feel that brands will never be
able to fully produce and manage the same quality
of content as media companies.
In navigating the connected TV landscape,
brands must create their own voice and lead
conversations, not aggregate other people’s
views. They should listen, respond and respect the
customer, and in this regard create innovative and
unique content that suits the consumer’s needs.
No longer will there be just a push message during
the TV ad breaks to buy a product; consumers
are seeking the information they require and the
message has become one of pull as well. The really
smart brand will create a world that will capture the
imagination of consumers, for example Compare the
Meerkat, Tony Tiger, the Nescafe couple and more
recently BT’s Adam and Jane.
By listening to what the customers want
and need, the content can also become more
personalised. 88% of respondents in the survey
either agree or strongly agree that brands need
to create a more personalised experience in
order to meet the growing demand of audiences.
Household demographics are varied but brands
and agencies have long used customer data
gathered via loyalty cards, online subscriptions
and tracking click-throughs to personalise and
connect with their customers. Connected devices
should be no different and we could one day view
bespoke and personalised content in our homes;
for example a young couple with no children could
enjoy the latest travel ad, while the family next
door could view child-care related ads, even if they
are both watching the same programme. Survey
respondents agree with this view with 89% either
agreeing or strongly agreeing that in the future
internet-connected TVs will personalise ads for
different household demographics even if that
household is enjoying the same programme as
others in the area.
Revolutionising the business model: "Brands as media companies"
“With a range of connected TVs coming to market with different platforms, it’s important that media companies and brands work together to standardise and therefore simplify marketing offerings across all of them, which is where the IAB Video Council could help.” Jack Wallington, Head of Industry Programmes, IAB.
“Where broadcasters have led and won audiences, so must brands follow with a supporting strategy and assets to engage consumers.”
11 Copyright © Adjust Your Set 2011
25
While the IAB and Adjust Your Set research
reveals that the industry thinks the content on
internet-connected TVs will be video-led (51% feel that
over 60% of the content will be video led) and that 77%
believe that consumers will want to interact with TV
content, the content proposition ultimately lies in what
the audience wants.
Research released earlier this year by market
researcher Knowledge Networks found that although two
out of five households have a connected TV in their living
room, very few consumers are making the most of its
features. 47% prefer to watch a programme on its regular
TV time slot and 62% “are not connected or not capable”
and “most plan to stay that way.”
While 91% of the industry questioned by the IAB
and Adjust Your Set agree that consumers will plug
in their internet-connected TV, they’re relying on the
consumers themselves to want to find relevant and
engaging content, rather than develop strategies to
persuade them (only 12% currently have a strategy in
place). Events such as the Olympic Games next year
could provide an ideal opportunity to develop the type of
content that will persuade the consumer to plug in. The
Olympic Games could be what the Queen’s Coronation
“It is clear that the real goal for both brands and broadcasters is finding a way to persuade the viewer to ‘turn on’ the installed but inactive device. This should be the key growth area for the next 6 to 12 months.” Chris Gorell
Barnes, CEO of Adjust Your Set
7 Source: Knowledge Networks
was for colour TV. Consumer research does show a
positive reaction to internet-connected TVs with two-
thirds believing the quality of connected TVs is about
the same, or better, than their regular TV reception
and one quarter of those cite watching TV shows
through connected devices as their number one
platform choice.7 So why, if the audience wants to
engage with the content on connected TVs, does the
industry not seem prepared for this phenomenon?
If the industry is to take small baby steps
across the connected TV landscape, then gaming
could be the first of these. Connected TVs could
see the “gamification” of advertising. TVs in the
home don’t just support television content; they
also support the hugely successful gaming industry.
Gaming consoles are one such device to connect
to the internet and game-shows are one of the
most popular programme formats. Could bringing
together gaming and TV be a major aspect of the
new digital landscape? 61% of survey respondents
think that app inspired games, similar to those
available on a smartphone, will be relevant
to consumers and therefore could encourage
engagement on connected TVs. Some of the most
successful red button applications were around
sporting programmes and interactive voting on
reality shows. It follows that we are on far more than
just the cusp of gamification of the TV ad.
How does content retain its crown on connected TVs?
“Internet-connected TVs will change consumers’ viewing habits for good.” Anonymous survey response
“The Olympic Games could be what the Queen’s Coronation was for colour TV.”
12 Copyright © Adjust Your Set 2011
27
Try asking your friends or work colleagues how
many of them use their mobile phone as soon as they
wake up in the morning? It’s often the first thing they do before they even turn on the light. An August 2011
“Communications Market Report” from Ofcom shows
that 60% of teens and 37% of adults in the UK are “highly
addicted” to their smartphone device, with a staggering
81% leaving their handsets turned on all the time.
It’s little wonder then that the mobile device
will play a significant role with the internet-connected
TV. Earlier in the year marketing agency Digital Clarity
found that 80% of under-25s use a second screen to
communicate with friends while watching TV and 72%
used Twitter, Facebook or a mobile app to comment
on shows.
For connected TVs it’s likely the mobile device
will merge with the traditional TV remote. Owners of a
“Mobile will dominate the interaction between consumer and TV (TV will dominate the viewing, mobile the conversation).” Anonymous
survey response
Samsung Smart TV can already use their iPhone,
iPad or Android handset to control their TV, using
a downloadable app or the touch remote that
comes with most of its high-range sets. Other TV
manufacturers, like Mitsubishi and Samsung, are
working on smartphone remotes and phone apps
as part of both Apple and Google’s TV offering
and LG offers a remote control that works more
like a computer mouse. Over 30% of respondents
from the IAB and Adjust Your Set survey feel that
consumers will access internet-connected TVs via
the TV remote into an app store controlled by the TV
manufacturers. There are still issues to work out of
course; if your phone goes into sleep mode, or you
receive a call during a TV programme, you’ll need to
switch between applications. And if only one phone
controls the TV, if you’re not in the house, how will
the other household members change
the channel!
And it’s not just mobile apps and devices
that will allow greater interaction with connected
TVs. Broadcasters will likely develop companion
apps for their channels and programmes that will
aggregate all the information for the consumer.
The recent launch of Zeebox by Anthony Rose and
Ernesto Schmitt reflects just this. The free zeebox
app automatically syncs an iPad, phone or computer
with a TV, shares the viewing and shows the
audience what their friends are watching in
real-time.
Could mobiles become the TV remote of our lives?
13
“For connected TVs it’s likely the mobile device will merge with the traditional TV remote.”
Copyright © Adjust Your Set 2011
29
Accessing content on the range of competitive
devices and platforms currently available raises
the inevitable question of monetisation and revenue
streams. Each piece of the connected puzzle, from the
TV manufacturer to the broadcaster, media company
and brand, will each be looking at the ROI of providing
content and technology for the connected TV. While the
manufacturers can clearly see sales rising, Samsung
sold two million Smart TVs in just 90 days with Europe
and North America accounting for more than 700,000
units, brands and broadcasters will need to measure the
effectiveness of their connected TV strategy.
There are a number of ways to create revenue,
depending on what sector the brand operates in;
automotive, retail or FMCG for example. Retailers
will want to develop an e-commerce strategy for their
connected TV proposition, FMCG to push vouchers
and automotive to book test drives. While the IAB and
Adjust Your Set research revealed that respondents felt
‘purchase from a retailer’ was the least likely activity for
customers on connected TVs, the platform is not solely to
encourage shopping, there are a number of possibilities
for brands. Even for retailers there is strong reason to
believe customers will purchase via the platform. At
MIPCOM 2011 Google TVs Director of Content Donagh
O’Malley said that once connected TVs achieve mass
adoption, they should allow consumers the ability to
purchase any item of their choosing at the click of the
button.8 Ultimately it’s about conversion.
In May of 2011 the UK Online Measurement
Company (UKOM) and Nielson unveiled the first industry-
backed online video metric. The news meant brands and
broadcasters could directly compare web viewing with
TV for the first time. Another measurement body,
the Broadband Measurement Working Group made
up of a range of broadcasters, has not yet launched
its standard metric for video on demand across
web-connected devices. As the industry continues
to launch content across mobile, connected TVs and
other platforms, these forms of measurement will
have to keep pace. Throughout 2011 Brightcove, the
video content platform, has been releasing tools
and support resources to help organisations take
advantage of LG’s Smart TV. The platform provides
media companies and brands with control over user
experiences, programming and business operations,
such as advertising and analytics. Brightcove said
earlier in the year that distributing content onto
the connected TV market requires a focus on how
content can be measured and therefore monetised.
The tools are currently only available for one
connected device – the LG Smart TV, with potentially
more to follow. Alternatively another video platform
Ooyala has launched ‘Ooyala Everywhere’, a
video solution aimed at providing large content
distributors a framework to develop online video
experiences with more flexibility around how the
video is consumed. However, until one definitive
guide is launched, there is no way to successfully
measure the effectiveness and thus revenue of
all content on connected TVs. Will the value chain
end up so large that no ads get served at all? Or
will only the biggest advertisers be able to afford
it? We could inevitably end up limiting consumer
choice on connected TVs if a new buying, selling and
measuring model is not found.
Another piece to this puzzle is the
standardisation of ad formats on connected TVs.
While the measurement of online advertising is
debated by UKOM and regulation is clarified by
bodies including Ofcom, the industry needs to
address the various opportunities available to
them. From pre-rolls to branded content hubs,
the opportunities on connected TVs are greater
than what is currently available spread across a
number of devices. Currently pre-roll ads serve
the online market, while traditional advertising
still plays its role on linear TV. However, each of
these opportunities will be available to brands on
internet-connected TVs and thus a clear definition
and regulation needs to be decided in a competitive
market. In addition, how will broadcasters measure
and monetise a customer journey from a 30 second
ad to branded content. Will the broadcaster receive
a share of the profits if a consumer interacts with
branded content found via an ad? Will brands be
allowed to serve TV ads, pre-rolls and produce a
branded content app? And who will be in control of
the media buying and selling across each platform?
Filling the connected purse
£
14 8 Source: New Media Age article: http://www.nma.co.uk/news/connected-tvs-are-commerce-platforms-says-google-tvs-donagh-omalley/3030634.article
Copyright © Adjust Your Set 2011
31
With any new consumer service regulation issues
always arise. For example, with online video on TV, does
that count as TV rights clearance or online? In May 2011,
Jeremy Hunt, the Secretary of State for Culture, Media
and Sport, officially began a “wide-ranging review” of
the 2003 Communications Act, the rules that govern
the regulation of broadcasting and communications
within the UK. His goals are to build a communications
framework “that will drive growth and innovation, remove
unnecessary burdens and continue to protect consumers
and the public.” It is still unclear how internet-connected
TVs will fit into Jeremy Hunt’s local TV service strategy.
Interestingly IAB industry members questioned in
the survey are like-minded, with 66% of respondents
agreeing that Ofcom will need to issue new regulations
for internet-connected TV. However, delegates who
attended the 2011 Royal Television Society Cambridge
To ensure internet-connected TVs take off and reach their full potential, the industry needs to work together as a whole. Both broadcasters and brands should agree formats and decisions together.” Chris Gorell Barnes, CEO of Adjust Your Set
Convention, voted unanimously against the need
for a new Communications Act. It’s clear there is a
disjointed opinion on this matter across the industry.
Ultimately regulating the connected TV
landscape will mean a decision over control and
ownership. The IAB and Adjust Your Set research
reveals that once connected TVs take off, survey
respondents feel that the strategy will be in the
hands of the media company (31%).
Regulating a connected landscape
“Connected TVs represent the merger of two huge advertising mediums which are regulated in different ways. Online video is still incredibly new and we’re still trying to figure out how this fits alongside broadcast from a regulatory perspective. However, advertising on connected TV, like all advertising, will be covered by the Advertising Standards Authority’s Committee of Advertising Practice who will offer guidance in due course.” Jack Wallington, Head of Industry Programmes, IAB.
15
“Ultimately regulating the connected TV landscape will mean a decision over control and ownership”
Copyright © Adjust Your Set 2011
33
Before analysing the impact of social TV it’s worth
noting that social TV is nothing new. TV has always driven
social interaction; whether it was the ‘water cooler’
moment the next morning in the office or comments
posted on Facebook during a Saturday night programme.
Love them or hate them, we all have something to
say about content, and those who produce it. Steve
McCattery, VP of home business EMEA at Motorola
Mobility said recently in the Daily Telegraph that “social
television is essentially the act of discussing what is
being watched on the main TV using internet services.”
60% of respondents in the IAB and Adjust Your Set
survey agree, or strongly agree, that internet-connected
TVs will further encourage the use of social networking
sites. Internet connectivity fundamentally changes the
nature of television by giving viewers access to video-
on-demand, web video and new online services, such as
social networking. Social media in particular has already
shaken the world of online video with various tools now
integrating the two. Facebook video players for retailers
in particular, now allow consumers to browse product
videos while engaging with their friends.
This trend for ‘social TV’ is spurring
entertainment companies and brands to create an even
greater interaction between the two media.
Social video combines the interactive experience
into one channel. Scrolling through peer reviews
and friends’ tweets whilst still viewing video content;
changing the outcome of the film with your own ideas,
or purchasing a featured product from the video with the
click of a button. It is the ultimate fusion between content
and experience.
“At Adjust Your Set we’ve measured up to 50% higher engagement in videos recommended by peers via social media than those found via search engines.” Chris
Gorell Barnes, CEO of Adjust
Your Set
Connected TVs will further revolutionise this
trend by integrating social networks directly into the
TV platform via apps, or have browsers that bring
social media to the screen. Zeebox for example
provides an app that automatically syncs an iPad,
phone or computer with a TV, shares the viewing
experience and shows the audience what their
friends are watching in real-time.
This form of integration will allow viewers to
interact with TV shows without the second screen;
recommending shows or movies to friends and
family and posting reviews in real-time.
Ultimately social video can greatly impact
the point of sale as well. As research from
Starcom MediaVest Group claimed, it is not just
being aware of brands on social media that leads
people to continue that relationship or buy goods,
it is the level of interaction or “doing something”
Social TV - “like” it
with branded content that has bearing. Jim Kite,
strategic development director, said “the deeper
the interaction with social media, the greater the likelihood of moving the consumer from enquiry
to brand preference.” Within their research 86% of
those who watch videos in social media would then
visit the brand website. The more involvement from
consumers in content, the more likely someone is to
move down the purchase funnel.
Peer recommendation has also had a long-
established impact on sales and brand engagement
and companies like Amazon have had success
with recommendation in the past; “others who
have bought this book, also liked…” The power
of customer data can ensure recommendations
are made based on consumers viewing habits
and connected TVs with integrated social media
comments, could take this to the next level.
16 Copyright © Adjust Your Set 2011
35
When the TV platform first emerged, producers
filmed radio programmes that were already being
broadcast in studios. The likes of David Attenborough
re-defined the medium by creating formats that went
further than studio programming had ever gone. Now
we’re seeing the development of social media impact
how we interact with our favourite programmes and
technology that enables us to consume on any device,
from any location. What is the defining connected TV
format? Will the interactivity and connectivity of the latest
platform take both brand and broadcaster to new levels
of production, creativity and engagement?
It was reported from the 2011 Royal Television
Society Cambridge Convention that “broadcasters are
not yet ready to embrace internet-connected television
platforms, due in part to the lack of control they would
have over the advertising appearing next to their
content.”9 What broadcasters need to understand is
that this phenomenon is happening regardless and
the IAB and Adjust Your Set research has shown that
85% of respondents are interested in the advertising
opportunities afforded by connected TVs. Advertising
models will need to be re-addressed as connected
TVs create a more personalised user experience. 75%
of respondents from the survey revealed they agree
that internet-connected TVs will change the type of
advertising used by brands. The platform will allow a
pull message, rather than push, with the type of content
“No one knows what will happen and it is very early days to guess who will win. However, it is certain that the traditional TV model will change.” Anonymous survey
response
available on it. As the world becomes better
connected across multiple devices and screens,
the industry too needs to connect its strategies and
content propositions.
The connected TV has created a new
integrated, collaborative and interactive ecosystem.
Viewers can now post a blog, order a dress, play a
game and update their Facebook status all from
their TV sets, and by pausing the TV, they can do
this without interrupting the programme. The result
is that brands will need to work harder to target
their customer and keep audiences engaged. It’s
become easier to click away from the TV ad and
we may not want to watch the same advert as our
neighbours. Viewers will also become increasingly
Conclusion
distracted from linear TV as the almost endless
array of media is offered to them on connected
TVs and recommended from friends. Video already
provides a more direct and personalised customer
relationship, particularly when integrated with
social media, but it also has numerous challenges
ahead for it.
More compelling than the content itself is
the interactive package that it can be wrapped in;
comments posted via Twitter or Facebook, peer
recommendations, requests for information and
smart-commerce – the purchase of products via
your Smart TV. Products could soon be sold via an
‘interactive purchase cycle’ that involves friends,
brands and even TV programme endorsements.
17 8 Source: http://www.marketingweek.co.uk/disciplines/digital/iptv-is-a-scary-prospect-for-old-school-broadcasters/3030204.article
Copyright © Adjust Your Set 2011
37
“I think internet TVs are just an early step on the path to fully integrated broadcast and internet media. People will undoubtedly access personalised content on the big screen but I think the format that will take is yet to be decided and probably not even developed yet.” Anonymous survey response
For the connected TV to deliver on its promise
it needs to reach its full potential and become an
indispensible tool for the customer to access, interact
and engage with content. That content however has
to create and deepen the viewer experience and
relationship. As already mentioned in this paper, it’s clear
the industry is waiting for someone to make the first
move. Broadcasters and media owners can easily slot
into the connected schedule with programmes such as
The X Factor easily transportable to a connected device.
Broadcasters have shown the way forward by creating
the market, now it’s up to the industry as a whole to
navigate connected TVs together. Each plays a part; the
broadcasters and media owners, brands and agencies.
It could ultimately reveal a whole new digital landscape,
with new regulations and revenue opportunities for all.
For brands in particular, it’s a whole new strategy.
Most brands already have a dedicated branded video
channel but rarely direct their customers toward it from
a banner ad, TV commercial or email newsletter from
one device to another. But brands should soon realise
that in addition to serving customers an ad between
their favourite TV show, they now have the opportunity to
compete for the customer’s attention and create content
consumers want to watch. New mothers could watch
a Pampers programme on the best ways to encourage
babies to walk, BT could offer tips on the internet-
connected home, or Nike could show interviews with
their celebrity stars, while you purchase the latest
products from these retailers; the list for potential
connected TV content is endless.
Regardless of the debate surrounding
strategies and content propositions, 72% of the
survey respondents disagree that “the internet-
connected TV is a passing fad and will not survive
the constantly evolving digital landscape”. We can’t
deny that the platform is here, that customers
are purchasing connected TVs and that content is
needed to sustain them. Innovation is at the heart
of the media and marketing industry. As the latest
gadgets arrive on the market, consumers want to
digest content on them. Whether the content and
strategies will emerge to support connected TVs is
the key question.
The End
Conclusion
18 Copyright © Adjust Your Set 2011
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