FIRST STUDY ON SMART TV AD EFFECTIVENESS, REVEALS INTERACTIVE AD FORMATS INCREASE BRAND ENGAGEMENT

Smartclip and LG Electronics – conducted international research in the UK, Germany, Spain, Russia and Australia shows positive consumer attitudes towards Smart TV advertising:

· Smart TV ads combined with advertising on traditional TV increases the advertising effect of TV campaigns

· Connectivity is a key factor for 81% of Smart TV users

· A third (31%) of people engage in an action as a result of a Smart TV ad

smartclip, the multiscreen and video brand advertising platform, today reveals the results of the first pilot study into the impact of Smart TV advertising in collaboration with LG Electronics (LG).  As recent research reveals that global Smart TV shipments reached 12.7 million units in Q1 2013, [1]the appetite for the device is growing amongst consumers which opens a booming platform for advertisers.

Shirlene Chandrapal, SVP of Connected TV at smartclip commented: “Our research has shown that combined with ads on traditional TV, Smart TV ads are extremely effective for engaging viewers, and as a focal medium the TV set continues to bring the family together in the living room. Traditional TV is losing users to Smart TV though; its interactive quality creates a deeper engagement between the viewer and the content being viewed, including brand advertising.”

News and entertainment at prime time still pertinent

Smart TV is mainly used as an entertainment service with nearly half of people in the study citing news and entertainment programmes as their favourite content on the device.  As with traditional TV, most people interviewed (62%) watch Smart TV during the evening, meaning that prime time advertising also reigns supreme for Smart TV.  Furthermore, the fact that these programmes can be watched on-demand on the Smart TV platform means that advertising on this device is an effective way for advertisers to reach consumers with highly relevant ads. Combined with the effects of advertising on traditional TV, Smart TV advertising can particularly be used to boost engagement across on-demand content.

Connecting the family

However, despite multi-device adoption, the TV is regarded as the unifying device within the household as 80% of Smart TV users in the study choose to use their Smart TV set for internet [2]features. In fact, 81% said that connectivity is one of the main reasons they looked to purchase a Smart TV device.

The Smart TV continues to be the centre of the living room; with nearly 80% of the study’s users watching with family or friends. In addition, these Smart TV users are hard to reach with advertising. Comprised of a key demographic of above average educated people, they are 20-49 years old with high purchasing power.

Youngjae Seo, Vice President of Smart Business Center at LG commented: “The interactive features that smart TV offers are the key to advertising effectiveness. This research really highlighted that viewers are now predisposed to take action as a result of viewing an ad and advertisers of course need to take advantage of this. For example, the LG Magic Remote enables much easier interaction with an ad on screen. Being able to control the television experience through pointing, drag and drop, voice or gesture brings a new dimension to viewing which is engaging and interactive.”

Size matters

The big screen appears to be in fashion as over 80% of Smart TVs are more than 40 inches in size. According to the study’s Smart TV users across the world, this big screen coupled with interactive ad formats are key reasons that Smart TV ads are so effective.

Shirlene Chandrapal, SVP of Connected TV at smartclip added: “The screen size of the Smart TV compared to other devices makes it effective for advertising. We have seen an increase in traffic across all LG Smart TVs; whereas brands often grapple with the small screen size on mobile, Smart TV offers alternatives to engage the audience.”

Interactive ads drive activation for brands

Smart TV advertising prompts interaction with eye catching content, as over two thirds of interviewed Smart TV users stop to watch interactive ads and have a positive attitude towards advertising on the platform. Half of the study’s Smart TV users say that they have already interacted with an ad and 31% of people engage in an action as a result of watching a Smart TV ad. 15% of these users who interact with an ad think about buying the product straightaway, 20% talk about the ad; and 24% search for more information on the brand or product on the internet. 

In order to stand out from the crowd though, ads need to be relevant, informative and easy to understand with nearly half of respondents citing these as the key considerations. Other factors that tempt users to interact with ads are incentives such as discounts and coupons.

Chandrapal continues: “By creating interactive, relevant campaigns for Smart TV, brands can more easily track the influence of their content and measure engagement and resulting actions. All over the world users are now looking for a more connected viewing experience where apps and the internet play a larger role, so it is imperative that brands monitor whether they are achieving this by measuring engagement.  This research has revealed that Smart TV has huge potential to engage audiences and we expect to see more and more advertisers capitalising on this platform in more creative ways.”

This research was conducted by smartclip in association with LG. smartclip is a global multiscreen and brand advertising platform specialising in video ad formats across all internet-connected devices and has strong relationships with all players in the Smart TV field from content partners to hardware manufacturers.

For additional key findings from this study, as well as methodology and a copy of the full report, please visit:www.smartclip.com/download/smartclip_Ad Effectiveness Study_EN_20130903.pdf

[1] Strategy Analytics, Global Smart TV Vendor Market Share Q1 2013, July 2013

About the research

The survey was carried out as a pilot study in the form of a gang survey amongst 2,000 participants across Germany, UK, Spain, Russia and Australia by Nielsen in June 2013. A follow up call and online survey was then carried out with the same group. Questions were tailored towards each individual market.

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing an consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com