First Study on Smart TV Ad Effectiveness, Reveals Interactive Ad Formats Increase Brand Engagement
YuMe-LG research shows positive consumer attitudes toward Smart TV advertising in U.S
Redwood City, Calif.(10 Sep 2013)
The first-ever U.S. study into the impact of Smart TV advertising and consumer behavior highlights the opportunity that Smart TV provides advertisers to reach a differentiated audience, validating why Smart TV is an essential component to complementing current TV media plans.
YuMe, Inc. (NYSE: YUME), a leading provider of digital video brand advertising solutions, and Smart TV leader LG Electronics (KSE: 066570.KS) conducted the study in the United States to better understand how consumers are engaging with ads within Smart TVs, while studying the Smart TV audience’s behavioral, lifestyle and psychographic profile data.
Part of a global Smart TV consumer research project spearheaded by LG, the U.S. study examined consumers within a natural living room environment, interacting with and sharing their perceptions of different Smart TV ad formats, while testing brand metrics including recall, favorability, and purchase intent.
Ad Effectiveness Findings:
- Smart TVs are an effective advertising medium when accompanied with traditional TV advertising. While pre-roll and accompanying companion banner advertising performs well across all brand and ad metrics, the study found that full-package ads are most effective.
- Ad targeting and relevance are keys to driving impact. Sixty-seven percent of respondents indicate that they have engaged or would consider engaging with a Smart TV ad because it advertises products/brands they are interested in.
“Smart TV creates a unique and exciting opportunity for consumers to interact and respond directly to an ad in-screen, which has not been possible with traditional TV,” says Youngjae Seo, Vice President of Smart Business Center at LG Electronics. “The research clearly underscores that brand advertisers can find better ad campaign effectiveness and ROI on Smart TVs when accompanied with traditional TV.”
Usage and User Demographics:
- Smart TV owners enjoy and prefer their devices over traditional TV sets. Ninety percent of Smart TV owners are satisfied with their devices and eighty one percent prefer using a Smart TV over a traditional TV set.
- The Smart TV is being used for more than just TV. Many users report high app usage and seventeen percent are likely to decrease or cancel their cable subscription in the upcoming year – a thirteen percent increase from last year.
- Viewers of Smart TVs are generally young, higher income professionals. Smart TV users are tech savvy, professionals with an influential role on household purchase decisions. They are also likely to pay a premium for the latest technology and brand names.
- Users of Smart TVs can be categorized in four distinct user segments. Among the four segments—affluent technologists, social youngsters, traditionalists and mid-life families—affluent technologists and social youngsters were most receptive to Smart TV advertising.
“The results not only affirm a growing Smart TV market, but also highlight a tremendous opportunity for advertisers to increase brand engagement through Smart TV,” says Michael Hudes, Executive Vice President of Emerging Markets, YuMe, Inc. “By understanding how people engage with Smart TVs, advertisers can better plan and target their audiences to improve brand awareness.”
With global Smart TV shipments reaching 12.7 million units in the first quarter of 2013, the appetite for Internet-connected TV is growing among consumers, creating a thriving platform for brand advertisers.
For additional key findings from the YuMe-LG study, as well as methodology and a copy of the full report, please visit: http://www.yume.com/insights/video-advertising-research
About the Research
The study was conducted on behalf of YuMe and LG by Nielsen as a pilot study in the form of a gang survey of 500 participants in June 2013. A follow up call and online survey was then carried out with the same group
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and 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.
About LG Electronics
LG Electronics, Inc. (www.lg.com) is a $45 billion global leader and technology innovator in consumer electronics, mobile communications and home appliances, employing 87,000 people working in 113 locations around the world. LG Electronics Inc. is one of the world’s leading producers of flat panel TVs and home entertainment products. LG’s award-winning Smart TV products offer viewers a wide range of streaming video services, games, 3D movies and applications that are easily accessed through the LG Smart TV’s intuitive user interface. Since 2011, LG has offered brand advertisers the opportunity to reach Smart TV viewers in the U.S., Canada, UK, Germany and 13 other countries with interactive brand advertisements and branded Smart TV applications. For more information on LG’s Smart TV advertising, see www.lgsmartad.com.
YuMe, Inc. is a leading provider of digital video brand advertising solutions. Its proprietary data-science driven technologies and large audience footprint drive inventory monetization and enable advertisers to reach targeted, brand receptive audiences across a wide range of Internet-connected devices. Designed to serve the specific needs of brand advertising, YuMe’s technology platform simplifies the complexities associated with delivering effective digital video advertising campaigns in today’s highly-fragmented market. YuMe (NYSE: YUME) is headquartered in Redwood City, CA with European headquarters in London and nine additional offices worldwide. For more information, visit YuMe.com/pr, follow @YuMeVideo and like YuMe on Facebook. Current YuMe logos can be found at www.yume.com/news/logos.