Internet on TV is the future of home entertainment

Video ads online effectively harness viewer attention

Posted on Feb 13, 2013 by YuMe

When entertainment technology makes a breakthrough, the innovation may seem special at first, but it’s usually not long before it vampirizes the entire industry. Once new products see overwhelming popularity, they don’t just become the standard in their category, they also wipe out whatever people relied on beforehand.

For example, while flat screen televisions were once considered luxury goods less than a decade ago, consumers today have a variety of flat screen options across ranges. It’s also close to impossible to find a new television that is not flat screen in stores and online.

As TVs that connect users to the web gain a stronger grasp on the home entertainment device market, it won’t be long before all televisions have these capabilities, states Arthur Goldstruck for Business Day Live. Goldstruck is the founder of World Wide Worx, a technology research firm.

The future of TV is internet
In “Emerging Growth Opportunities for Connected TV and Advertisers,” YuMe notes year-over-year growth in connected TV for video viewing increased from 30 percent to 35 percent between 2011 and 2012. This surge can be attributed to smart TV growth and a larger number of people connecting their televisions to the internet via game consoles, Blu-ray players and steaming set-tops, which means video ads online are reaching an increasing number of viewers.

In late 2012, 45 percent of respondents to YuMe’s respondents said they plan to purchase a new television in the next 12 months. This rate is up from 33 percent the previous year, which suggests tablets, smartphones and other devices are in no way replacing the television set.

What is likely being replaced though is TV in its traditional sense. One-third of respondents who plan to buy a TV are expecting to purchase a smart TV, meaning nearly 20 percent of homes could have one of these devices in the next year.

Meanwhile, consumers are also showing interest in connecting devices to their TV to view internet content on the big screen.

What and how consumers watch
The majority of smart TV owners use their devices to stream movies and television shows from the internet. Another significant portion use them to watch short videos on sites like YouTube. Both streamed content and short-form videos online provide myriad opportunities for brand marketers. Pre-roll, mid-roll and post-roll ads effectively harness users’ attention.

While many on-demand services provide users with the option of purchasing one video or a monthly subscription to content that is ad-free, the majority of consumers prefer watching free content that integrates commercials throughout the video. While traditional television commercials often get muted or cut off when viewers change the channel, online content viewers understand the tradeoff between free content and being shown ads. They’re more likely to watch ads in their entirety.

A growing advertising platform
In “Connected TV and Multi-screen Advertising: Prospects for 2013,” Smart TV Insider gathered insight from industry experts on the future of video advertising on smart TVs. Jean Paul Edwards of Manning Gottlieb OMD, a communications planning and buying agency, suggested multi-screen advertising is driving the success of video commercials online.

Miles Lewis, the vice president of advertising and sales at Shazam, agreed, adding that multi-screen campaigns give brands the opportunity ”to enable consumers to engage more deeply with a 30-second spot.”

YuMe’s whitepaper supports these claims. More than three-quarters of consumers said they’ve used a laptop, mobile phone or tablet while watching television. More than half reported using two screens at least half as often or more frequently than when they are only watching TV.

Most often, multi-screeners are accessing email, using Facebook or shopping, which explains why brands that have a presence across platforms are getting consumer attention.