White Paper by IAB UK

1. Internet Connected TVs:
The Next Living Room Evolution
A report into the connected TV challenges faced by brands
By Kathryn Meadmore

2. Connected TV Whitepaper
Introduction to Whitepaper
This whitepaper has been produced by Adjust Your Set,
the leading multichannel video agency, and the IAB
(Internet Advertising Bureau), the trade association for
online and mobile advertising. Industry research was
conducted via an online survey of the IAB’s members.
The results from over 200 respondents are included
throughout this paper to illustrate industry reaction
to internet-connected televisions. This paper aims to
understand the issues and challenges associated with
the new platform.
About Adjust Your Set™
Adjust Your Set is the leading multichannel video agency
specialising in content across online channels, connected
TVs and social networks. Clients include Marks &
Spencer, Thomas Pink, Debenhams, BA, The Royal Opera
House and Liz Earle. Founded in 2008, Adjust Your Set
delivers an end-to-end communication service using About the IAB
video as the platform to provide a constant and consistent The Internet Advertising Bureau (IAB) is the trade the best role for online and the emerging
brand engagement. association for online and mobile advertising. With mobile market, helping them engage their
over 650 member companies, the IAB promotes customers and build their brands.
Adjust Your Set was recently shortlisted as one of the growth of these channels, develops best practice for Through the dissemination of research
Media Momentum Top 50 fastest growing Digital Media advertisers, agencies and publishers, and aims to and the organisation of regular events, we aim
Companies in Europe and was named Best Specialist put digital high on the agenda of every marketer in to put digital on the agenda of every marketer
Digital Agency at the Digi Awards 2011. the UK. in the UK, acting as an authoritative and
Online is an exciting and fast-growing objective source for all internet advertising
For Further information please visit: http://www. medium and our job at the IAB is to work with issues whilst promoting industry-wide
adjustyourset.tv/about-us/ members to ensure marketers can identify best practice.
1 Copyright © Adjust Your Set 2011

3. Contents
3 The internet-connected TV
4 The current state of the connected TV market
5 Why connected TVs?
6 What is a Connected TV?
8 What’s on the connected TV schedule?
9 Industry reaction to connected TVs
10 How do you find the content?
11 Revolutionising the business model: “Brands as media companies”
12 How does content retain its crown on connected TVs?
13 Could mobiles become the TV remote or our lives?
14 Filling the connected purse
15 Regulating a connected landscape
17 Social TV – ‘like’ it
18 Conclusion
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5 Copyright © Adjust Your Set 2011

4. The internet-connected TV
“The questions raised
from the research and
discussed within this paper,
?
highlight the uncertainty
that still remains across
the industry.”
Connected TVs have gained significant attention
over the last year, and it’s only set to continue. The BBC
launched an updated version of its iPlayer for web-
connected TVs, Sony and Opera teamed up to provide web
browsing capabilities on the platform and Audi launched
the UK’s first web-connected TV campaign to promote its
A7 Sportback range. In addition, recent research claims
internet-connected televisions are predicted to make up
90% of the TV market in the UK by 2014.1
With so much weight attached to the internet-
connected TV, everyone is asking what this will mean Research from several sources, including sector is in its infancy and needs to gain more
for the TV advertising industry. What will the content Ericsson, clearly shows a growing uptake in momentum from recommendation and information
on connected TVs look like? Who will manage this new connected TV purchases around the world, on advantages, before consumers start to follow
connected landscape? And more importantly, how long anticipating 50bn connected devices globally the trend.”
do brands sit back and wait until they make the leap into by 2020.2 The tech-savvy consumer is again The questions raised from the research
connected TVs? leading the way and technology itself is forcing and discussed within this paper, highlight the
Also, and perhaps more importantly, will anyone the industry to reassess their business models uncertainty that still remains across the industry.
connect their TVs to the web? While the increase in sales as audiences migrate away from traditional As this report shows while many brands, agencies
of internet-enabled devices is undeniable, in order for channels. 72% of IAB and Adjust Your Set survey and broadcasters agree that it’s an exciting platform
audiences to want to plug their device in there must be a respondents disagreed with the statement that warrants investigation, many still cite various
compelling content proposition. This must not be the sole “internet-connected TVs are a passing fad and challenges facing them and only a small percentage
responsibility of the broadcasters; brands too must play will not survive the constantly evolving digital will be implementing a strategy now or in the
their part. landscape”, but as one respondent said, “this near-future.
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7 Copyright © Adjust Your Set 2011
1
Source: Furturesource Consulting March 2011
2
Source: Ericsson March 2011

5. The current state of the connected TV market
Market place 4
With the launch of YouView, a joint venture
60% of new televisions being sold in 2012 are expected to have
between the BBC, ITV, C4 and others, as well as
Internet connectivity.
Google TV, Apple TV, connected set-top boxes and
manufactures like Samsung and LG with Smart TVs, the
major broadcasters are already setting up to deliver a
Independent research predicts YouView will have a market penetration of 3-4 million by
completely new channel into the home. This will provide
2014 (high case scenario 8.3million).
significant functionality for advertisers and an entirely
new way for brands to communicate with consumers.
There are still many unknowns about this new market,
Virgin’s new TiVo box will be rolled out to 3.7million customers over the next few years.
not only what the content will look like and the strategies
in place, but how brands and media owners will monetise
the new connected-landscape.
TV app downloads are also accelerating: in January 2011 Samsung announced that the
There have been various statistics recently
Samsung Apps platform, the world’s first app store specifically for TVs, had reached
released citing the growing uptake of internet enabled
2 million app downloads. Whilst it took 268 days for Samsung to shift the first million
devices. Informa expects manufacturers such as
television apps, it only took 53 days to shift the next million. In May 2011 Samsung
Samsung, LG and Sony to sell a staggering 52 million
announced that it had surpassed 5 million downloads.
internet-connected TVs over the course of 2011 on a
global basis and IHS iSuppli claims that from 2013
“The rapid uptake of connected internet-enabled devices will out-sell PCs. The range of
TVs should warrant serious products that are already able to connect to the internet
consideration from brands on includes set-top boxes, connected TVs, video game
the potential of the platform consoles, Blu-ray players and tablets. Collectively, sales Although the statistics show a growth in conducted in order to provide further proof that the
and future revenue streams of these devices will surge from 161 million units in 2010 consumer purchase of connected TVs, a case remains newly-emerged platform has significant benefits to
to be generated,” said Chris to 504 million units in 2013.3 By 2014, market research to be proved for those within the industry who convince many to commit valuable time and spend
Gorell Barnes, CEO of Adjust and consulting firm DisplaySearch, has predicted that prefer to sit back and wait for a more substantial on it? Are we facing a catch-22? Is the industry
Your Set. 123 million internet-connected TV units will be shipped uptake in connected TVs until they implement a waiting to see what content is offered first, before
worldwide annually. strategy. Does more in-depth research need to be investing in strategies of their own?
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9 Copyright © Adjust Your Set 2011
3
Source: IHS iSuppli
4
Source: http://theconnectedset.tv/803/the-connected-tv-opportunity-for-

6. Why connected TVs?
“In short what connected
TVs offer the market is
£
the ability for brands to
connect the massive
offline spend with the
rapidly emerging online
video market.”
Online video has grown significantly over the
past few years; from home-grown videos of pet cats, to
brand-dedicated website players and channels. YouTube
was the original Grandfather of online video. Started in
2005 it enabled the first uploading and sharing of video audience. With so much video content now available video delivered to tablets will all grow significantly
across the internet and became the first aggregator online, particularly via YouTube, and SEO for video in the coming years, and it’s safe to assume that
of content. YouTube established a shared viewing still in its infancy, video strategies have been slow connected TVs will benefit too. TV is the natural
experience and now video has moved from bedroom to evolve. However this is about to change. As home for video and thus is a natural fit for video
geeks to boardroom level and the power of online technology evolves, providing more devices and advertising. Traditional TV won’t lose its share of ad
video has shifted. It’s now an expectant part of the user multiple screens on which to show content on, more spend; instead additional revenue will come from
experience and is the fastest way to reach new audiences advertising opportunities have arisen. Traditional the various new channels that ads can appear on.
across multiple screens. TV models make up the bulk of video ad spend In short what connected TVs offer the market
For brands, online video has become an today, with about $160 billion spent worldwide is the ability for brands to connect the massive
integrated component of the marketing mix; strategies on broadcast advertising. But the rapid growth of offline spend with the rapidly emerging online video
focus on the easiest and most cost-effective route to connected devices will soon add a new dimension market. TV advertising is about to merge with the
engage with the consumer, and in most cases this to what the industry has come to know as TV exciting and innovative medium that is online. This
is now video-led. To date the only disadvantage that advertising. Advertising for video on PCs and web will be happening in living rooms throughout the
online video has had, is its struggle to find a consistent browsers, video delivered to mobile devices and world in a very short space of time.
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11 Copyright © Adjust Your Set 2011
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Source: Data from Booze & Co via Gigaom.com July 2011

7. What is a Connected TV?
“There are various So who are the main competitors?
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.”
What is Apple TV?
What is Google TV? Apple TV is a digital media receiver, or small set-
As shown in the statistics earlier in this paper Google TV is a search-based software platform that top box, that allows consumers to use an HDTV set
there are various manufacturers and devices competing combines TV content with internet functionality. Just to view photos, play music and watch video content
in the connected TV market. It was one of the challenges as Google’s mobile operating system Android can that originates from internet services or local
cited by respondents in the survey that has limited the be built into multiple handsets, Google TV can run networks. Apple TV now allows content to be bought
“The fact that every uptake of connected TV strategies so far. on multiple connected TV devices including set-top from iTunes, Flickr, Mobileme, YouTube and Netflix,
manufacturer works on a For the sake of this paper we define a connected boxes, satellite boxes and digital televisions. As 75% in the US only. Apple has a number of partnerships
different platform currently TV as the integration of the internet into modern of respondents in the IAB and Adjust Your Set survey with movie studios and television networks, giving
makes it difficult for television sets and set-top boxes, as well as the believe that content on connected TVs will be found it an impressive content library. Rumours started
developers.” Anonymous technological convergence between TV and computers; it via search functions, it makes Google’s proposition circulating in August 2011 that the company will
survey response also integrates the user journey across multiple channels seem a likely lead competitor in the UK market. It is launch a digital television in 2012.
of content. due to launch in the UK and Europe in early 2012.
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13 Copyright © Adjust Your Set 2011

8. What is a Connected TV?
What is YouView?
YouView, formerly known as Project Canvas, is a
proposed open, internet-connected television platform
for the UK market. The venture is a partnership between
four broadcasters (BBC, Channel 4, Channel 5 and ITV)
and three communication companies (Arqiva, BT and
TalkTalk). The platform, which is planning a full launch
in early 2012, will allow consumers access to a range of
third-party services (television channels, radio stations,
on-demand services and internet content) using a
compliant device (such as a set-top box) built
to a common standard and through a broadband
internet connection.
What is a games console?
Various games consoles also allow interaction and
integration with online TV. Until now many online video
services were launched primarily with the game console
in mind to meet the demand from users for interactive
video and game play. PlayStation 3 (PS3) for example, What is a Smart TV?
allows catch up TV services and select channels There are various manufacturers competing in the
accessible under a separate TV channel. It also allows ‘Smart TV’ market including Samsung, LG and Sony. What is Boxee?
integration with social networking allowing users to Each has the basic functionality of connecting to Boxee is a cross-platform freeware Home Theatre
watch and discuss films with other uses, as well as the internet, while pushing their own unique user PC, essentially a software application with a user
access to Netflix in the US to stream content. Microsoft’s experience. For example, Sony’s Qriocity Video on interface and social networking features designed
Xbox console and subsequent launch of Xbox Kinect Demand service allows viewers to rent classic films for the TV. Marketed as the first ever “social media
shows a new level of interaction with your TV, even down or enjoy the latest Hollywood blockbusters which centre”, Boxee enables its users to view, rate and
to how you purchase products. A recent prototype shown are immediately streamed to the device, whereas recommend content to their friends through many
in partnership with MasterCard allows you to wave your Samsung has launched the Samsung Smart TV from social network services and interactive media.
hands at an icon and select purchases, all from the which consumers can download apps as well as However you cannot currently watch and record live
comfort of your sofa. view content. TV via over-the-air TV, cable or satellite signals.
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9. What's on the connected TV schedule?
Frequency Of Activities On Connected TVs
To Watch Catch Up Tv
As Entertainment Platform
Participating With Social Networks
Surfing The Web
Participating Via Mobile Phones
80% 71% 61% Playing Interactive Games
Entertainment Interactive Games
Purchasing From Retail Brands
In order to provide the type of engaging allow consumers to pause live TV while ordering a
content audiences will want to watch and interact takeaway or a new outfit via their TV or one day even
When the IAB and Adjust Your Set asked industry with, a clearly defined strategy must be employed test drive a new car from the comfort of the sofa via
members what kind of content they believe consumers by each party involved in the connected TV market. a remote control and connected TV.
will engage with, 80% said they feel that entertaining While broadcasters and production companies
short-form content will be the most prevalent. This is already employ a 360 degree commissioning
“Until now branded content followed by interactive content (71%) where consumers approach that allows audiences to engage in
has been produced at the can change the outcome of the video and app inspired programming content across a range of other While purchasing from a retailer
optimum engagement time for games (61%). YouTube has been an influential force for devices and platforms, brands too must develop a appears low, as more connected
consumers, about 2-3 minutes online advertising since its launch and with the rise of connected strategy. For too long, brands have got by TV services become available it’s
long. However, on connected streamed video content on internet enabled devices; its using different, loosely combined creative concepts sensible to expect this activity to
TVs brands need to up their influence is still noticeable. 69% of respondents either across digital and traditional channels. They will not increase among consumers. Video
game, focusing less on video agree or strongly agree that “snackable” branded content be able to use this same strategy on connected TVs; commerce platforms by Marks &
length and more on creating will become more widespread. everything will appear together and unless there Spencer and ASOS prove consumers
high-quality content to suit Interestingly when asked to rate on a scale is a completely ‘glued up’ relationship between all enjoy them and this behaviour will
the platform that’s both bold of 1-5 how frequently they thought people will use parties involved on the platform, the result will be a no doubt translate to connected
and engaging.” Chris Gorell their internet-connected TVs for particular activities, poor customer experience. TVs.” Jack Wallington, Head of
Barnes, CEO of Adjust Your Set. ‘watch catch-up TV’ came out as the most frequent and For brands, the connected TV should allow Industry Programmes, IAB.
‘purchase from a retail brand’ least. a rejuvenation of the traditional ad break. It will
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17 Copyright © Adjust Your Set 2011

10. Industry reaction to connected TVs
“We will likely see a more
fully integrated strategy
developing within agencies.”
60% 85% 12%
have had interested in ad currently have
discussions opportunities a strategy
“This sector is in its
infancy and needs to gain
more momentum from While this paper has outlined the various
recommendation and connected devices currently available on the market, or
information on advantages due to launch, and the growth in sales of such devices,
before consumers start to the research carried out by the IAB and Adjust Your Set
follow the trend,” Anonymous found that just 12% of industry respondents currently Once internet-connected TVs do take off, survey is forcing media agencies to reassess their
survey response have an internet-connected TV strategy in place. The respondents feel that the strategy will be in business models as audiences migrate away from
majority of respondents (85%) are interested in the the hands of the media company (31%). It’s an traditional channels. This again raises the question
advertising opportunities afforded by internet-connected interesting development when agencies are from an organisational perspective and the old
TVs, but there was still 10% who are not sure when they increasingly adapting across the paid, earned and relationships of buying and selling. Media agencies
will implement a strategy and 22% who say they have owned media spectrum. Agencies have always are increasingly being bypassed by ad agencies and
“It’s clear the industry no plans to implement one at all. In addition over a third defined themselves with terms like “traditional” even brands themselves to book ad slots. During
considers the platform an of respondents feel that only a budget of up to £50,000 or “digital”, but with internet-connected TVs the 2010’s X Factor the successful Yeo Valley ad was
incredibly significant leap for should be allocated to connected TVs; will this be enough relationship between agency, brand and broadcaster created and booked by BBH and Yeo Valley with
online advertising, but it’s also to create the compelling content proposition needed to will change. We will likely see a more fully Fremantle Media and ITV directly. Will brands be
become apparent that like persuade the consumer to plug in? integrated strategy developing within agencies and circumnavigating the media industry in favor of
so many other technological Many in the industry believe the internet- even brands themselves acting like agencies to deal becoming a media company in their own right? But
developments we’re waiting connected TV trend needs to take off further to warrant directly with the broadcaster. as Richard Morris, the deputy managing director for
for the consumer to leap a strategy and challenges facing the industry include Technology has always played a significant Carat recently said within a feature for Marketing
first.” Jack Wallington, Head of cost, fragmentation of the manufacturing industry and role in the media and marketing industry and 90% of Magazine about the ‘endangered media agency’;
Industry Programmes, IAB. that there are still other channels, including mobile, respondents in the IAB and Adjust Your Set survey “now more than ever, brands are going to need help
to explore. either agree or strongly agree that new technology managing the complexity inherent in media.”6
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19 Copyright © Adjust Your Set 2011
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Source: http://www.marketingmagazine.co.uk/sectors/features/article/1083901/brands-really-need-media-agencies/

11. How do you find the content?
“As the content propositions
develop so too will the ways
consumers access content”
75% 63%
Persuading a consumer to plug in and utilise
Search Functions Recommendation
content on their connected TV is no easy task.
Consumers are faced with multiple channels and an
array of content at their fingertips. So how does the
industry persuade the consumer, and more importantly,
how will consumers find the content they want?
Industry analysis has shown that consumers are content propositions develop so too will the ways online TV channel on a mobile app. It’s a potentially
already purchasing internet-connected TVs and this is consumers access content. They may initially visit small leap from here to an app on connected TVs.
only set to continue. So while brands and broadcasters the related app for additional information regarding In addition, users will be able to find content via
develop their content propositions, consumers will likely traditional TV ads, but eventually a seamless search functionality on connected TVs, which 75%
continue to view linear TV and likely access additional transition to click-through from ad to branded of the IAB and Adjust Your Set survey respondents
information and content via a service similar to the red content app will develop. agreed would be a key method of discoverability.
button. As the IAB and Adjust Your Set research shows, Earlier in the year Audi launched pre-roll Following search, 63% of respondents said content
consumers will also continue to consume catch-up ads for the A7 Sportback, which directed audiences would be found via recommendation, potentially
content on internet-connected TVs (this was listed as the to the Audi.tv channel via internet-enabled TVs from social media. Following search functions, 63%
most frequent activity by respondents when asked to rate where they could watch further content. Brands of respondents said content would be found via
how consumers will use internet-connected TVs). As the such as Debenhams already offer video from its recommendation, potentially from social media.
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12. Revolutionising the business model:
"Brands as media companies"
“Where broadcasters have led and won audiences, so
must brands follow with a supporting strategy and
assets to engage consumers.”
own business model. Now brands need to move Meerkat, Tony Tiger, the Nescafe couple and more
from linear advertising to a multichannel approach. recently BT’s Adam and Jane.
Where broadcasters have led and won audiences, so By listening to what the customers want
must brands follow with a supporting strategy and and need, the content can also become more
assets to engage consumers. personalised. 88% of respondents in the survey
However, while respondents agree (54%) either agree or strongly agree that brands need
with the statement that brands will become media to create a more personalised experience in
companies in order to navigate the internet- order to meet the growing demand of audiences.
connected TV landscape, half (50%) followed this by Household demographics are varied but brands
saying that both business models will still exist. 22% and agencies have long used customer data
disagreed entirely and feel that brands will never be gathered via loyalty cards, online subscriptions
able to fully produce and manage the same quality and tracking click-throughs to personalise and
“With a range of connected of content as media companies. connect with their customers. Connected devices
TVs coming to market In navigating the connected TV landscape, should be no different and we could one day view
with different platforms, As with most industries, as it is in everyday life, brands must create their own voice and lead bespoke and personalised content in our homes;
it’s important that media imitation is the sincerest form of flattery. So much so conversations, not aggregate other people’s for example a young couple with no children could
companies and brands work that brands are re-defining their business models and views. They should listen, respond and respect the enjoy the latest travel ad, while the family next
together to standardise and taking inspiration from the media industry, in particular customer, and in this regard create innovative and door could view child-care related ads, even if they
therefore simplify marketing the ways they produce and distribute content. Brands unique content that suits the consumer’s needs. are both watching the same programme. Survey
offerings across all of them, have had to re-address how they engage across an No longer will there be just a push message during respondents agree with this view with 89% either
which is where the IAB Video increasingly complex media landscape. When the the TV ad breaks to buy a product; consumers agreeing or strongly agreeing that in the future
Council could help.” Jack broadcast industry introduced 360 degree commissioning are seeking the information they require and the internet-connected TVs will personalise ads for
Wallington, Head of Industry and launched Facebook pages, Twitter character profiles message has become one of pull as well. The really different household demographics even if that
Programmes, IAB. and online competitions alongside programmes such smart brand will create a world that will capture the household is enjoying the same programme as
as Skins, The X Factor and Hollyoaks, it re-defined its imagination of consumers, for example Compare the others in the area.
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13. How does content retain
its crown on connected TVs?
“The Olympic Games
could be what the
Queen’s Coronation
was for colour TV.”
While the IAB and Adjust Your Set research
reveals that the industry thinks the content on
internet-connected TVs will be video-led (51% feel that
over 60% of the content will be video led) and that 77%
believe that consumers will want to interact with TV
content, the content proposition ultimately lies in what
the audience wants.
was for colour TV. Consumer research does show a
Research released earlier this year by market
positive reaction to internet-connected TVs with two- “Internet-connected TVs will change
researcher Knowledge Networks found that although two
thirds believing the quality of connected TVs is about consumers’ viewing habits for good.”
out of five households have a connected TV in their living
the same, or better, than their regular TV reception Anonymous survey response
room, very few consumers are making the most of its
and one quarter of those cite watching TV shows
features. 47% prefer to watch a programme on its regular
through connected devices as their number one
TV time slot and 62% “are not connected or not capable”
platform choice.7 So why, if the audience wants to
and “most plan to stay that way.”
engage with the content on connected TVs, does the
“It is clear that the real While 91% of the industry questioned by the IAB
industry not seem prepared for this phenomenon? together gaming and TV be a major aspect of the
goal for both brands and and Adjust Your Set agree that consumers will plug
If the industry is to take small baby steps new digital landscape? 61% of survey respondents
broadcasters is finding a way in their internet-connected TV, they’re relying on the
across the connected TV landscape, then gaming think that app inspired games, similar to those
to persuade the viewer to ‘turn consumers themselves to want to find relevant and
could be the first of these. Connected TVs could available on a smartphone, will be relevant
on’ the installed but inactive engaging content, rather than develop strategies to
see the “gamification” of advertising. TVs in the to consumers and therefore could encourage
device. This should be the persuade them (only 12% currently have a strategy in
home don’t just support television content; they engagement on connected TVs. Some of the most
key growth area for the next place). Events such as the Olympic Games next year
also support the hugely successful gaming industry. successful red button applications were around
6 to 12 months.” Chris Gorell could provide an ideal opportunity to develop the type of
Gaming consoles are one such device to connect sporting programmes and interactive voting on
Barnes, CEO of Adjust Your Set content that will persuade the consumer to plug in. The
to the internet and game-shows are one of the reality shows. It follows that we are on far more than
Olympic Games could be what the Queen’s Coronation
most popular programme formats. Could bringing just the cusp of gamification of the TV ad.
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Source: Knowledge Networks

14. Could mobiles become
the TV remote of our lives?
“For connected TVs it’s
likely the mobile device
will merge with the
traditional TV remote.”
Try asking your friends or work colleagues how
many of them use their mobile phone as soon as they
wake up in the morning? It’s often the first thing they
Samsung Smart TV can already use their iPhone, switch between applications. And if only one phone
do before they even turn on the light. An August 2011
iPad or Android handset to control their TV, using controls the TV, if you’re not in the house, how will
“Communications Market Report” from Ofcom shows
a downloadable app or the touch remote that the other household members change
that 60% of teens and 37% of adults in the UK are “highly
comes with most of its high-range sets. Other TV the channel!
addicted” to their smartphone device, with a staggering
manufacturers, like Mitsubishi and Samsung, are And it’s not just mobile apps and devices
81% leaving their handsets turned on all the time.
working on smartphone remotes and phone apps that will allow greater interaction with connected
It’s little wonder then that the mobile device
as part of both Apple and Google’s TV offering TVs. Broadcasters will likely develop companion
will play a significant role with the internet-connected
and LG offers a remote control that works more apps for their channels and programmes that will
“Mobile will dominate the TV. Earlier in the year marketing agency Digital Clarity
like a computer mouse. Over 30% of respondents aggregate all the information for the consumer.
interaction between consumer found that 80% of under-25s use a second screen to
from the IAB and Adjust Your Set survey feel that The recent launch of Zeebox by Anthony Rose and
and TV (TV will dominate communicate with friends while watching TV and 72%
consumers will access internet-connected TVs via Ernesto Schmitt reflects just this. The free zeebox
the viewing, mobile the used Twitter, Facebook or a mobile app to comment
the TV remote into an app store controlled by the TV app automatically syncs an iPad, phone or computer
conversation).” Anonymous on shows.
manufacturers. There are still issues to work out of with a TV, shares the viewing and shows the
survey response For connected TVs it’s likely the mobile device
course; if your phone goes into sleep mode, or you audience what their friends are watching in
will merge with the traditional TV remote. Owners of a
receive a call during a TV programme, you’ll need to real-time.
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27 Copyright © Adjust Your Set 2011

15. Filling the connected purse
£
Accessing content on the range of competitive TV for the first time. Another measurement body,
devices and platforms currently available raises the Broadband Measurement Working Group made
the inevitable question of monetisation and revenue up of a range of broadcasters, has not yet launched
streams. Each piece of the connected puzzle, from the its standard metric for video on demand across
TV manufacturer to the broadcaster, media company web-connected devices. As the industry continues
and brand, will each be looking at the ROI of providing to launch content across mobile, connected TVs and
content and technology for the connected TV. While the other platforms, these forms of measurement will
manufacturers can clearly see sales rising, Samsung have to keep pace. Throughout 2011 Brightcove, the
sold two million Smart TVs in just 90 days with Europe video content platform, has been releasing tools
and North America accounting for more than 700,000 and support resources to help organisations take
units, brands and broadcasters will need to measure the advantage of LG’s Smart TV. The platform provides Another piece to this puzzle is the
effectiveness of their connected TV strategy. media companies and brands with control over user standardisation of ad formats on connected TVs.
There are a number of ways to create revenue, experiences, programming and business operations, While the measurement of online advertising is
depending on what sector the brand operates in; such as advertising and analytics. Brightcove said debated by UKOM and regulation is clarified by
automotive, retail or FMCG for example. Retailers earlier in the year that distributing content onto bodies including Ofcom, the industry needs to
will want to develop an e-commerce strategy for their the connected TV market requires a focus on how address the various opportunities available to
connected TV proposition, FMCG to push vouchers content can be measured and therefore monetised. them. From pre-rolls to branded content hubs,
and automotive to book test drives. While the IAB and The tools are currently only available for one the opportunities on connected TVs are greater
Adjust Your Set research revealed that respondents felt connected device – the LG Smart TV, with potentially than what is currently available spread across a
‘purchase from a retailer’ was the least likely activity for more to follow. Alternatively another video platform number of devices. Currently pre-roll ads serve
customers on connected TVs, the platform is not solely to Ooyala has launched ‘Ooyala Everywhere’, a the online market, while traditional advertising
encourage shopping, there are a number of possibilities video solution aimed at providing large content still plays its role on linear TV. However, each of
for brands. Even for retailers there is strong reason to distributors a framework to develop online video these opportunities will be available to brands on
believe customers will purchase via the platform. At experiences with more flexibility around how the internet-connected TVs and thus a clear definition
MIPCOM 2011 Google TVs Director of Content Donagh video is consumed. However, until one definitive and regulation needs to be decided in a competitive
O’Malley said that once connected TVs achieve mass guide is launched, there is no way to successfully market. In addition, how will broadcasters measure
adoption, they should allow consumers the ability to measure the effectiveness and thus revenue of and monetise a customer journey from a 30 second
purchase any item of their choosing at the click of the all content on connected TVs. Will the value chain ad to branded content. Will the broadcaster receive
button.8 Ultimately it’s about conversion. end up so large that no ads get served at all? Or a share of the profits if a consumer interacts with
In May of 2011 the UK Online Measurement will only the biggest advertisers be able to afford branded content found via an ad? Will brands be
Company (UKOM) and Nielson unveiled the first industry- it? We could inevitably end up limiting consumer allowed to serve TV ads, pre-rolls and produce a
backed online video metric. The news meant brands and choice on connected TVs if a new buying, selling and branded content app? And who will be in control of
broadcasters could directly compare web viewing with measuring model is not found. the media buying and selling across each platform?
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Source: New Media Age article: http://www.nma.co.uk/news/connected-tvs-are-commerce-platforms-says-google-tvs-donagh-omalley/3030634.article

16. Regulating a connected landscape
“Ultimately regulating the
connected TV landscape
will mean a decision over
control and ownership”
With any new consumer service regulation issues
always arise. For example, with online video on TV, does
that count as TV rights clearance or online? In May 2011,
Jeremy Hunt, the Secretary of State for Culture, Media “Connected TVs represent the merger
and Sport, officially began a “wide-ranging review” of of two huge advertising mediums which
the 2003 Communications Act, the rules that govern are regulated in different ways. Online
the regulation of broadcasting and communications video is still incredibly new and we’re still
To ensure internet-connected within the UK. His goals are to build a communications Convention, voted unanimously against the need trying to figure out how this fits alongside
TVs take off and reach their framework “that will drive growth and innovation, remove for a new Communications Act. It’s clear there is a broadcast from a regulatory perspective.
full potential, the industry unnecessary burdens and continue to protect consumers disjointed opinion on this matter across the industry. However, advertising on connected TV,
needs to work together as a and the public.” It is still unclear how internet-connected Ultimately regulating the connected TV like all advertising, will be covered by
whole. Both broadcasters and TVs will fit into Jeremy Hunt’s local TV service strategy. landscape will mean a decision over control and the Advertising Standards Authority’s
brands should agree formats Interestingly IAB industry members questioned in ownership. The IAB and Adjust Your Set research Committee of Advertising Practice who
and decisions together.” the survey are like-minded, with 66% of respondents reveals that once connected TVs take off, survey will offer guidance in due course.”
Chris Gorell Barnes, CEO of agreeing that Ofcom will need to issue new regulations respondents feel that the strategy will be in the Jack Wallington, Head of Industry
Adjust Your Set for internet-connected TV. However, delegates who hands of the media company (31%). Programmes, IAB.
attended the 2011 Royal Television Society Cambridge
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17. Social TV - “like” it
Before analysing the impact of social TV it’s worth
noting that social TV is nothing new. TV has always driven
social interaction; whether it was the ‘water cooler’
moment the next morning in the office or comments
posted on Facebook during a Saturday night programme.
Love them or hate them, we all have something to
say about content, and those who produce it. Steve
McCattery, VP of home business EMEA at Motorola
Mobility said recently in the Daily Telegraph that “social
television is essentially the act of discussing what is
being watched on the main TV using internet services.”
60% of respondents in the IAB and Adjust Your Set
survey agree, or strongly agree, that internet-connected
TVs will further encourage the use of social networking
sites. Internet connectivity fundamentally changes the Connected TVs will further revolutionise this with branded content that has bearing. Jim Kite,
nature of television by giving viewers access to video- trend by integrating social networks directly into the strategic development director, said “the deeper
on-demand, web video and new online services, such as TV platform via apps, or have browsers that bring the interaction with social media, the greater the
social networking. Social media in particular has already social media to the screen. Zeebox for example likelihood of moving the consumer from enquiry
shaken the world of online video with various tools now provides an app that automatically syncs an iPad, to brand preference.” Within their research 86% of
integrating the two. Facebook video players for retailers phone or computer with a TV, shares the viewing those who watch videos in social media would then
in particular, now allow consumers to browse product experience and shows the audience what their visit the brand website. The more involvement from
videos while engaging with their friends. friends are watching in real-time. consumers in content, the more likely someone is to
This trend for ‘social TV’ is spurring This form of integration will allow viewers to move down the purchase funnel.
“At Adjust Your Set we’ve entertainment companies and brands to create an even interact with TV shows without the second screen; Peer recommendation has also had a long-
measured up to 50% higher greater interaction between the two media. recommending shows or movies to friends and established impact on sales and brand engagement
engagement in videos Social video combines the interactive experience family and posting reviews in real-time. and companies like Amazon have had success
recommended by peers via into one channel. Scrolling through peer reviews Ultimately social video can greatly impact with recommendation in the past; “others who
social media than those found and friends’ tweets whilst still viewing video content; the point of sale as well. As research from have bought this book, also liked…” The power
via search engines.” Chris changing the outcome of the film with your own ideas, Starcom MediaVest Group claimed, it is not just of customer data can ensure recommendations
Gorell Barnes, CEO of Adjust or purchasing a featured product from the video with the being aware of brands on social media that leads are made based on consumers viewing habits
Your Set click of a button. It is the ultimate fusion between content people to continue that relationship or buy goods, and connected TVs with integrated social media
and experience. it is the level of interaction or “doing something” comments, could take this to the next level.
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18. Conclusion
When the TV platform first emerged, producers
filmed radio programmes that were already being
broadcast in studios. The likes of David Attenborough
re-defined the medium by creating formats that went
further than studio programming had ever gone. Now
we’re seeing the development of social media impact
how we interact with our favourite programmes and
technology that enables us to consume on any device,
from any location. What is the defining connected TV
format? Will the interactivity and connectivity of the latest
platform take both brand and broadcaster to new levels
of production, creativity and engagement?
It was reported from the 2011 Royal Television
Society Cambridge Convention that “broadcasters are available on it. As the world becomes better distracted from linear TV as the almost endless
not yet ready to embrace internet-connected television connected across multiple devices and screens, array of media is offered to them on connected
platforms, due in part to the lack of control they would the industry too needs to connect its strategies and TVs and recommended from friends. Video already
have over the advertising appearing next to their content propositions. provides a more direct and personalised customer
content.”9 What broadcasters need to understand is The connected TV has created a new relationship, particularly when integrated with
that this phenomenon is happening regardless and integrated, collaborative and interactive ecosystem. social media, but it also has numerous challenges
the IAB and Adjust Your Set research has shown that Viewers can now post a blog, order a dress, play a ahead for it.
“No one knows what will 85% of respondents are interested in the advertising game and update their Facebook status all from More compelling than the content itself is
happen and it is very early opportunities afforded by connected TVs. Advertising their TV sets, and by pausing the TV, they can do the interactive package that it can be wrapped in;
days to guess who will win. models will need to be re-addressed as connected this without interrupting the programme. The result comments posted via Twitter or Facebook, peer
However, it is certain that TVs create a more personalised user experience. 75% is that brands will need to work harder to target recommendations, requests for information and
the traditional TV model will of respondents from the survey revealed they agree their customer and keep audiences engaged. It’s smart-commerce – the purchase of products via
change.” Anonymous survey that internet-connected TVs will change the type of become easier to click away from the TV ad and your Smart TV. Products could soon be sold via an
response advertising used by brands. The platform will allow a we may not want to watch the same advert as our ‘interactive purchase cycle’ that involves friends,
pull message, rather than push, with the type of content neighbours. Viewers will also become increasingly brands and even TV programme endorsements.
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Source: http://www.marketingweek.co.uk/disciplines/digital/iptv-is-a-scary-prospect-for-old-school-broadcasters/3030204.article

19. Conclusion
For the connected TV to deliver on its promise
it needs to reach its full potential and become an
indispensible tool for the customer to access, interact
and engage with content. That content however has
to create and deepen the viewer experience and
The End
relationship. As already mentioned in this paper, it’s clear
the industry is waiting for someone to make the first
move. Broadcasters and media owners can easily slot
into the connected schedule with programmes such as
The X Factor easily transportable to a connected device.
Broadcasters have shown the way forward by creating
the market, now it’s up to the industry as a whole to
navigate connected TVs together. Each plays a part; the
broadcasters and media owners, brands and agencies.
“I think internet TVs are just It could ultimately reveal a whole new digital landscape,
an early step on the path to with new regulations and revenue opportunities for all.
fully integrated broadcast For brands in particular, it’s a whole new strategy.
and internet media. People Most brands already have a dedicated branded video babies to walk, BT could offer tips on the internet- the constantly evolving digital landscape”. We can’t
will undoubtedly access channel but rarely direct their customers toward it from connected home, or Nike could show interviews with deny that the platform is here, that customers
personalised content on the a banner ad, TV commercial or email newsletter from their celebrity stars, while you purchase the latest are purchasing connected TVs and that content is
big screen but I think the one device to another. But brands should soon realise products from these retailers; the list for potential needed to sustain them. Innovation is at the heart
format that will take is yet that in addition to serving customers an ad between connected TV content is endless. of the media and marketing industry. As the latest
to be decided and probably their favourite TV show, they now have the opportunity to Regardless of the debate surrounding gadgets arrive on the market, consumers want to
not even developed yet.” compete for the customer’s attention and create content strategies and content propositions, 72% of the digest content on them. Whether the content and
Anonymous survey response consumers want to watch. New mothers could watch survey respondents disagree that “the internet- strategies will emerge to support connected TVs is
a Pampers programme on the best ways to encourage connected TV is a passing fad and will not survive the key question.
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