Study shows that 40% of the budget should be invested in video on demand based on advertisements (Avod)
Sitting on the couch and watching television has become a habit as complex as the advertising delivered to consumers. Of the base of 14 million Samsung Smart TVs existing today in Brazil, 31% no longer consume linear channels. And the stay of just one hour among the 22% who still opt for traditional players. Streams sprouted in droves, forcing brands to re-target. Samsung Ads advertising solution helps the market understand changes and hit the target. At the head of the operation is Essio Floridi, who explains the job in the following interview.
What has changed in media consumption?
Around 2014, consumers began to consume video on demand, streaming and videogame content. The time spent in front of TV was no longer just for linear, traditional content, from open or closed TV. It was then that Samsung envisioned a business opportunity, and created Samsung Ads, a response to this change.
What is the presence of the operation?
Samsung Ads started in the United States in 2015 with five to six people. In the last eight years, it has grown like few businesses in the world. In 2017, we set up the operation in Europe, based in London, which serves 34 countries. In 2020, we arrived in Latin America, simultaneously in Brazil and Mexico, the largest economies in the region. The pandemic helped to catalyze this habit change. Several providers of streaming and content production applications have emerged.
What is Samsung’s Smart TV base in Brazil?
There are 14 million devices enabled to receive the advertising that we sell, both in native formats on the Smart TV platform, which we call Smart Hub, and on the Samsung TV Plus streaming service. We also deliver advertising, which is a Free Ad Supporter Streaming TV (Fass) service, free to the consumer and monetized by advertising. We have already run more than 800 campaigns for 200 brands in Latin America, with advertisers from all verticals. Today, 31% of our audience no longer consumes traditional linear content, neither open nor closed channels. S consume paid and free video games and streaming. Another 22% of the base consume less than an hour of linear content per day, switching between 14 and 15 channels. Four or five years ago, advertisers spoke to their audience through linear campaigns. Today, he no longer speaks because the chance of meeting these people is small.
Where does the accuracy promised to brands come from?
We saw the chance to join Samsung Electronics, a hardware, computer, cell phone and television giant, with the sale of advertising. Through Automated Content Recognition (ACR) technology, we automatically recognize everything consumed on the device. We do not use personal data. contextual. We were able to find out what the device consumed on open or pay TV, which program and channel it accessed, whether it consumed paid streaming or not, which internet provider it used, which video game it played. The information goes to a database in Korea, and it gives rise to advertising-enabled clusters. The holistic view. Our scale is gigantic because Samsung is the leader in Smart TV sales, and will have an important scale to move the customer’s business needle. It is possible to segment campaigns by purchasing power, considering devices with a screen larger than 75 inches, 4k or 8k, that watch reality shows or play video games. This puts us in a privileged position in the advertising ecosystem.
What is the marketing model?
It is identical to the digital one, based on cost per thousand, number of impressions and views. We unite the best of television, visualization and advertising, with the best of digital, which is measurement. After 25 years of the emergence of the digital medium, we managed to unite both worlds in a single business, which is connected TV.
Which cases stand out?
Mondelez ran a campaign, in partnership with Netflix, for the series Stranger things, in July 2022, to talk about Bis, taking advantage of the moment when people were going to consume a lot of streaming. The context was very favourable. This example shows the possibility of adapting the creation to the connected TV environment. P&G, a BBB sponsor, used our formats to talk about the Pantene brand during one of the parties. Everyone who entered the TV was impacted by the action, which promoted the party that was happening at that moment in the TV program. This is an emblematic case, which shows, from a creative point of view, the possibilities of the CTV market. We were able to find out about all the devices that consume reality shows, and we aggregated the audiences. This action shows the complementarity with traditional television, open or closed, which is important in a country like Brazil, where television still has a lot of strength.
How does this complementarity bring results?
The LOral brand ran a campaign for eight months on pay TV and, in 12 days, we were able to complement the brand’s reach by 10%. We delivered advertising for devices that had not been impacted. We have this role of complementarity, of delivering advertising with the desired reach, increasing frequency, maximizing the advertiser’s investment. We use our intelligence in favor of the brand budget and the audience. If I can understand what people want, I can be relevant, and deliver advertising that will get attention.
How representative should CTV be in the investment mix?
The study The rule of forty, with audience data from Samsung and Nielsen, shows that 40% of the budget previously allocated to television must be invested in video on demand based on advertisements (Avod) or Free Ad Supported Streaming TV (Fast). This is an average across verticals for campaigns to be maximized. There needs to be a shift in the media investment mix. Avod, Fast, where consumers spend their time today.
Are agencies competitors or partners?
We speak directly with clients, but most of our business is intermediated by agencies, which are responsible for creatively exploring this new medium, knowing how to use data in the best possible way. CTV a new medium. We are between TV and digital. If we go back to the end of the 1990s, when the internet appeared, television reigned supreme, promoted the brand, had presence, commercial delivery, and moved people. But it always left something to be desired from a measurement point of view. Needed further research to know if it was efficient or not. In mid-1998, when I started working with digital advertising, the internet brought up the issue of measurement, metrics, clicks, cost per view. It launched a new dimension in advertising, which started to have an impact on the result, and grew a lot. But, from the point of view of scope, TV remains absolute.
What is the role of each medium?
The challenge is to digitize television advertising. We bring to advertising all the characteristics of TV, including the big screen and attention. Even in the display format, attention is focused on the bar, the moment in which the consumer is making a choice. Samsung TV Plus consumption is similar to traditional TV. What differentiates that consumer choice. He who selects the application. dedicated attention, different from traditional TV, often used as a company, for example. Advertising takes advantage of this attention, the most important asset of brands today. And we are concerned about not being invasive. We use data to ensure relevance and create connection. We want consumers who are likely to consume advertising. It doesn’t have to be invasive to make an impact. The consumer who passes the remote control on the Ad Tile, format that we have in Smart Hub, is really interested. That’s because we’ve done the work beforehand to deliver something relevant.
Does the end of cookies interfere?
I often say that we were born in the future. The discussion about the end of cookies is current, but we have never done targeting using cookies. We are cookieless. We do segmentation differently. In the same way that we identify the content consumed on televisions, we are able to find out which advertising arrived on each device, and then we follow up to complement coverage or frequency. If the device was hit twice, why not deliver five more hits?
What is the growth projection?
We advanced more than 200% year on year. The idea will double in size over the next four to five years.
Do you intend to incorporate the cellular base service in Brazil?
At some point, this will deliver, mobile streaming service already exists in the United States, and then we will monetize on mobile as well. It’s in the plans, but it doesn’t have a set date. We have a huge base of cell phones in Brazil, all over the world, but our focus is still on connected TV. Before that, we have the Samsung Gaming Hub on the horizon, which is already part of the television environment. With our solution, the person does not need a video game console to play on TV. All you need is a remote control connected via bluetooth. This audience, the gamer, who plays on cell phones, computers and television is also an opportunity for monetization with advertising. We were able to talk to this audience, which is difficult to find, but an interesting consumer for brands. The level of use of the Samsung Gaming Hub on Brazilian television is very high, much higher than in the United States.
