July 29, 2012

Connected TV, also known as over-the-top TV, smart TV and IPTV, has been gaining advertiser attention as it makes its way into more homes. By year’s end, Leichtman Research Group estimates, 38% of US households will have at least one TV set connected to the internet, up from 30% in 2011.

Earlier findings showed advertisers somewhat reluctant to test the connected TV waters, even though about a third of viewers interacted with connected TV video ads—a higher engagement rate than most desktop and mobile video ad benchmarks.

A December 2011 study from research firm Frank N. Magid Associates and video ad network Tremor Video showed the greatest number of US connected TV viewers visited websites that mentioned the ad or considered purchasing a product or service post-exposure.

Research results from Frank N. Magid Associates and video ad network YuMe were similar: 30% of US connected TV viewers visited an ad’s website post-exposure, and a quarter considered the advertised product for purchase. Other popular actions included searching for more information both in-store and online (26%), “liking” or following a product or brand (25%) and clicking directly on the ad to learn more (23%).

These percentages are significant considering video ad services provider Ooyala found the majority of connected TV content is greater than 10 minutes in length, unlike most video content on desktop and mobile devices. That viewers are willing to delay or interrupt their long-form video viewing to consider or act on an advertisement is noteworthy for advertisers looking to drive direct engagement and consideration.

Ads displayed before the start of programming and content were slightly more common than mid-video ads. YuMe and Frank N. Magid Associates found 57% of US connected TV viewers encountered pre-program ads, compared to half who remembered seeing mid-stream ads.

Undoubtedly, connected TV has the potential to provide advertisers the best of the internet’s interactivity and TV’s captivity. But for now, investment remains minimal. YuMe reported just 1% of online video ads served to US-based audiences in 2011 were served on connected TVs. That number should increase steadily as the industry continues to invest in more seamless methods—and metrics—for cross-platform advertising.

For more information at http://www.emarketer.com

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