How smart TVs will redefine viewing behaviors and advertising opportunities

A tipping point in smart TV usage opens up transformative advertising opportunities, and cements shared viewing as an enduring consumer preference.
13 September 2022
smart tvs
Louise Ainsworth
Louise
Ainsworth

Executive Managing Director, Media Division, EMEA

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We often encounter false starts and detours when developing new technologies, and sometimes things that may seem to be the future are launched only to be met with consumer apathy. 

In the context of viewing, 3DTVs, Google Glass, curved screens and red button services all proclaimed to be the next big thing at one stage. Yet to date, consumer adoption tells us otherwise.

Today, it’s the metaverse, blockchain and impossibly HD screens that appear to be paving the way forward - but the acid test for future screen technology is not about what is technically possible, nor what gets Silicon Valley excited; it’s whether it fits with and enhances how audiences actually watch content! 

Certainly, this is the mode of thinking that defines Kantar’s new report, The Future Viewing Experience, which appraises the market with data and objectivity - not to mention a few cautionary notes too! 

And what we see, despite the proliferation of mobile screens, new tech, and competing distractions, is that a lot of viewing remains a shared, lean-back experience with a limited desire to interact or make decisions. 

Meanwhile, of all the new technologies and business models that are opening up future opportunities for the future viewing landscape, there is one shared and persistent view we should pay attention to: over the coming decades the standard for all distribution of content, including advertising, will be through the internet. 

No doubt, broadcast distribution will endure throughout the decade, but with full fiber and 5G network expansion helping to handle the increase in data usage, the consensus is that eventually all TV and video distribution, linear and VOD, will be via IP. 

Marrying these insights together gives us a much clearer idea - beyond hype or hope - of where the TV market is really heading, and we believe it is pushing the reach of Smart TVs towards a tipping point.

A game changer

Although ‘Smart’ television screens with direct internet connectivity have been around for some time, they have suffered in the past from poor user interfaces and clunky broadband connectivity. Consequently, the industry’s focus was aimed at the devices that connected to the TV, such as dongles, smartphones, games consoles and set-top boxes. 

Things have evolved more recently, however; in part because households spent much more time exploiting the functionality of connected screens during the pandemic, but also because Smart TVs are just getting better. 

Furthermore, the global rise in more VOD services could also be fueling Smart TV usage, with viewers expressing a clear desire to experience (increasingly high quality) content on the biggest and best screen.

Indeed, Kantar Comtech data for Q1 2022 shows that across major European markets, including France, Germany, Great Britain, Italy and Spain, 44% of all TV sets are now 45” or more in size, while 64% of households own a Smart TV. 

While mobile is a well-established and dominant medium across many activities, it is the TV set that remains the primary growth driver for long form streaming content. 

Market impact

This has implications for various players. Certainly, for those interested in big ticket brand building ads, it is good news; the best canvas for their advertising is there, as is the audience.

Furthermore, Smart TVs present potentially game-changing opportunities for the targeting of advertising, and even open up the market for new types of advertising, such as display ads in menus.

Additionally, because Smart TVs are set to dominate the streaming experience, we can also expect a battle for their control. We have already seen the first signs of this, with Sky launching its Sky Glass TV set, and Amazon too with its Fire TV Omni.

If the Smart TV is the future portal for streamed entertainment, controlling the hardware will offer media owners (or device manufacturers) a significant advantage, particularly in targeted advertising.

Unlocking audiences

Of course, with Smart TVs playing such a significant role in future home entertainment, there will be some far-reaching implications for audience measurement.

The battle for control of the Smart TV as the main gateway into the home means that measurement of the TV set is even more critical, particularly when we consider router meters.

People Meter measurement technology will remain vital to measure who is watching what, and with more content and advertising delivered directly via IP, their role becomes even more important. 

Meanwhile, router meters are also increasingly the global standard for measuring all relevant IP traffic within the home. Consequently, it will gain further utility determining the source of delivery to the TV set and identifying content in tagged data. 

Finally, we are seeing opportunities for Smart TV data to enhance measurement, offering a more granular view on subsets of the market. However, this will not provide data on the market as a whole - which means panels will still remain an essential way to contextualize and make the most informed decisions.

Download The Future Viewing Experience report here

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