The next living-room revolution: internet-connected TVs

By The Drum Team, Editorial

Internet Advertising Bureau (IAB)



October 13, 2011 | 6 min read

Research undertaken by the Internet Advertising Bureau (IAB) and multi-channel video agency Adjust Your Set has revealed that 88% of marketers are yet to develop connected TV strategy. The survey of over 200 IAB members uncovered industry reactions to internet-connected TVs, and the report aims to illustrate these reactions and understand the issues and challenges associated with the new platform.Here we take a look at the report's main findings.

The internet-connected TVConnected TVs have gained significant attention over the last year, and it’s only set to continue. Recent research from Future Source Consulting claims internet-connected televisions are predicted to make up 90% of the TV market in the UK by 2014.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? The questions raised from the research and discussed within the report highlight the uncertainty that still remains across the industry. The results of the report show that 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.

The current state of the connected TV Market

This information from The Connected Set indicates that 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.The report defined the main competitors as Google TV, Apple TV, YouView, games consoles, Smart TV and Boxee.
The above shows what kind of content industry members believe consumers will engage with. The report recommends that 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.
Respondents were asked to rate, on a scale of 1-5, how frequently they thought people used internet-connected TVs for particular activities. Watching catch-up TV was named as the most frequent activity, and purchasing from a retail brand came out the least frequent.Another question posed by the report was how does the industry persuade the consumer to utilise content on their connected TV, and more importantly, how will consumers find the content they want?
The report found that 75% of respondents agreed search functionality would be a key method of discovering content. 63% of respondents thought that content would be found via recommendation – potentially from social media.What is the industry reaction to internet-connected TVs? The research found that just 12% of industry respondents currently have an internet-connected TV strategy in place. The ajority of respondents (85%) are interested in the advertising opportunities afforded by internet-connected TVs, but another 10% stated they are unsure when they will implement a strategy and 22% say they have no plans to implement one at all.
The report suggests that brands must move from linear advertising to a multichannel approach. It says that brands should follow where broadcasters have led, with a supporting strategy and assets to engage consumers. 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 needsThe research found that 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.The next question is, how does content retain its crown on connected TVs? While 91% of the industry questioned 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).
The report suggests that 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.So in what way will internet-connected TVs change advertising?
In the past, worries over how content would be affected by internet-connected TVs have perhaps overshadowed discussions on strategy. It was stated 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.” However, the IAB and Adjust Your Set research has shown that 85% of respondents are interested in the advertising opportunities afforded by connected TVs, and the report suggests that broadcasters should accept that this phenomenon is happening regardless. 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 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.As one survey respondent said, “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.”

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Internet Advertising Bureau (IAB)

The Internet Advertising Bureau (IAB) is the UK trade association for digital advertising, representing most of the UK’s leading brands, media owners, publishers...

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Adjust Your Set

A full-service digital content agency designed for next generation marketing We have been pioneers & distributors of video in a multi-screen world since 2008....

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