Dive Brief:
- TV maker Vizio is creating its own advertising unit to sell ad space on its signature television screens, the company announced in a press release shared with Marketing Dive.
- Vizio Ads, the newly formed business arm, will sell premium display ads across its SmartCast internet-connected TV platform, commercial slots on Vizio's WatchFree streaming service and units on partner over-the-top (OTT) apps. The device maker can offer ads on around 13 million TVs that use SmartCast, The Wall Street Journal reports.
- Vizio is opening an office in New York City run by SVP Mike O'Donnell to support the new business. It has hired six ad sales executives so far, and plans to bring on a total of two dozen through 2020, per the Journal.
Dive Insight:
As the OTT video ad market rapidly changes amid a flurry of streaming service launches and cord-cutting, where and how to buy TV ads is evolving, a development that could create new opportunities as well as confusion for advertisers.
Vizio positioning itself not only as a hardware supplier but also as a provider of premium ad inventory, which could be attractive for advertisers as Vizio has access to viewer data that could prove valuable to marketers seeking more refined targeting capabilities than basic household demographics. Samsung and Roku offer similar direct buy opportunities.
However, the growing options for where and how to place TV ads is creating a fragmented landscape that is likely to become even more crowded as programming providers like Amazon, Hulu and Disney race to capitalize on consumers ditching traditional cable, causing more non-traditional players to wedge into the game and battle for viewer attention.
OTT ad spending is on the rise in the U.S., up 38% in 2019 to $6.94 billion, according to eMarketer. The report predicts connected TV usage will grow 5.3% to reach 195.1 million viewers by the end of this year and will surpass 200 million by 2020. To put it in perspective, CTVs generate double the video impressions than mobile devices, a report by ad software firm Extreme Reach found in October. Vizio is now working to snag a slice of that opportunity by offering ad inventory on the CTVs it already sells.
"As viewing behaviors shift and the marketplace for connected TV advertising explodes, brands need to find new ways to reach audiences on the biggest screen in the house," Vizio's O'Donnell said in a statement. "A direct-to-TV advertising business not only helps brands find new, more relevant ways to engage with viewers, it gives them peace of mind knowing their OTT ad budget is actually making it to the screen of a TV."
