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Connected TVs score advertising gains via reach, targeting, data attributes

More consumers are consuming video programming through connected devices from Roku Inc. and Apple Inc. and Samsung Electronics Co. Ltd.'s line of smart TV. As a result, advertisers are turning to connected TV as an effective means to reach displaced viewers.

Mark Rotblat, chief revenue officer of ad-supported streaming service Tubi Inc., told attendees at a Sept. 25 panel at Advertising Week that legacy pay TV providers lost 1.5 million subscribers in the second quarter. Connected TVs provide brands with a way to recover some of the audience tied to the exit from the traditional video platforms. Moreover, he said for cord nevers, connected TVs represent incremental touchpoints to consumers who otherwise might have never been exposed to advertisers' messages.

Ivan Markman, vice president and chief business officer at Verizon Communications Inc.'s media unit, said amid the increasingly fragmented media world, more advertisers are trailing viewer migration to the platform. As such, connected TVs generated triple-digit advertising growth during the second quarter, Markman said.

Reach aside, connected TVs offer some of the targeting and data benefits associated with digital video. Noah Levine, chief revenue officer at data measurement firm 605, said those capabilities are convincing advertisers to allocate more dollars to the platform. The benefits associated with targeting and data collection are self-reinforcing values for the platform, according to Markman.

Rotblat echoed his fellow panelists, noting that connected TV growth follows the long-held thesis of advertisers moving weight to vehicles that build brand awareness and ultimately drive sales.

Similarly, he believes ad-supported video-on-demand, or AVOD, offerings are poised to become more prominent parts of media advertising planning. Rotblat said while more subscription video-on-demand services are gearing up to enter the market, related costs will result in consumers only paying for a couple of such products.

Such budget reallocation has yet to meaningfully occur during the upfront negotiations season when programmers look to sell inventory in their content ahead of the upcoming TV season.

Levine said during the upfront that agencies are highly focused on securing linear schedules that enable their clients to deliver messages during specific weeks and times of the year.

A bridge is needed during the upfront to connect the buying and selling sides within the traditional TV ecosystem, including more digital-based offerings, whether AVOD, delayed viewing opportunities through DVRs or on-demand services, and/or the connected TV space, Levine said.