The Rise Of The Walled Gardens Around ACR Tech In Smart TVs

 ACR techIn the wake of Nielsen losing its National and Local TV accreditation from the Media Rating Council, networks are eyeing alternative measurement companies.

Sitting within many of these data sets is automated content recognition (ACR) tech. ACR tech captures and interprets audio and video snippets on a TV, helping data companies understand the totality of content watched on a smart TV.

The tech is hardly new. Companies such as VideoAmp and iSpot use ACR to measure audiences and advance alternative currencies, ACR is integrated into most smart TVs, and it is used to enable novel forms of targeting, like showing an ad on CTV to someone unexposed to the same ad on linear TV.

For the past few years, however, ACR data has been used for a wider swath of marketing activities. As its value increases, the companies controlling ACR data have made it harder to access.

ACR had primarily been for retargeting on the buy side, but marketers are increasingly turning to the tech for measurement, said Ken Norcross, VIZIO’s senior director of data strategy.

“The data itself is a cross-platform tool – it’s a bridge that sits between both streaming and linear,” he said.  Using an IP address, ACR data can link to other data sets, showing marketers how well a campaign is performing and offering an apples-to-apples comparison of a CTV and linear TV campaign.

Smart TV manufacturers like Samsung, LG, Roku and VIZIO are using ACR as a way to bolster their respective ad businesses and ad-supported channels.

Fewer companies are sharing their ACR data, instead using the data to support their own businesses.

As CTV attempts to improve its measurement, including alternate currencies to Nielsen, these walled gardens are ensuring the space remains fragmented.

“If you're a measurement company, it’s becoming a walled garden,” said Jane Clarke, CEO and managing director of CIMM, a coalition for media measurement.

Rise of the walled gardens

One of the biggest developments came when Roku acquired Nielsen’s Advanced Video Advertising business earlier this year, giving the company access to Nielsen’s ACR and dynamic ad insertion capabilities. Nielsen had previously licensed its ACR data, including to Roku. But that ACR data is now exclusive to Roku.

Besides Roku, LG and Samsung also make their ACR data accessible only to their advertiser customers.

That leaves VIZIO as the only smart TV manufacturer licensing ACR through Inscape. Samba TV, which integrates with 24 smart TV brands, including Sony and Panasonic, also licenses its data, Clarke said.

“One of the weaknesses of smart TV data is you can't get it all – there's been a pullback in the licensing of that data for measurement purposes,” she said. “If you want to buy advertising through LG, for example, they're going to use their ACR data to help you plan and execute, and give you attribution on their inventory that they have access to.”

Even VIZIO has been making moves to limit access. In July, the company announced it would only allow some ad tech companies to tap into Inscape targeting data as the company develops its own programmatic services platform. Verizon Media was a notable exception to that new rule. VIZIO still lists VideoAmp, iSpot, Data Plus Math, Nielsen and Comscore among its measurement partners. Because of those partnerships, VIZIO’s Norcross resists classification as a walled garden.

One reason for the walled gardens: TV manufacturers are keeping their data now that they’re spinning up their own ad businesses.

“All the major OEMs [original equipment manufacturers] have brought ACR in house” so they can scale their ad monetization, said Roku’s VP of product management Louqman Parampath.

The rise in CTV viewership over the past four to five years has also popularized ACR data. “As TV dollars are moving over to CTV, ACR data helps to solve for important measurement capabilities like reach and frequency,” Parampath said.

Pros of ACR

One of ACR tech’s secret weapons is the ability to measure ad frequency in a fragmented ecosystem. Its tech measures how many times an ad appears on the TV screen by recording an ad and matching it to the same ad in a provider’s reference library (an exhaustive repository of content and ads running on TV).

“Measuring everything that hits the screen is the fundamental difference between ACR and every other television measurement technology in use today,” according to a recent report by Sequent Partners underwritten by Roku.

LG Ads CEO Raghu Kodige said that advertisers can no longer rely on older panel-based measurement solutions, especially when it comes to reach and frequency.

“With streaming advertising taking off, this is becoming even more important because most advertisers now want to plan linear TV and CTV together,” he said. “If you want to do that, you pretty much need this ACR technology.”

Challenges and limitations

While ACR data may be positioned as superior to panel-based measurement, it has its own set of weaknesses.

One relative weakness is identity. ACR data samples are built from devices, not households or individuals.

More sophisticated applications of ACR data require identity resolution, linking a device to a household of an individual. Only then can a TV buy truly de-dupe reach and frequency or monitor frequency capping.

Not all smart TVs in a household have ACR technology or the opt-ins to collect the right viewing data. Those limitations can result in less than half of the TV sets in a household being measured by any ACR data provider, according to Sequent Partners.

The report called for the adoption of Ad-ID – a standard ad identification and encoding system – an industry solution to “make viewership data reconciliation simpler and more precise.”

The challenge, LG Ads’ Kodige said, is creating a uniform industry standard that would allow multiple OEMs to share exclusive data.

“Until then, it will still be multiple walled garden solutions,” he said.  Advertisers must do the extra work to adopt multiple ACR-rich solutions in order to reach the majority of US households.

Potential for alternative currency?

When it comes to measurement, ACR works best as part of a mix of data sets, such as combining it with set-top box data, Clarke said.

ACR data is becoming part of alternative currencies.

“I strongly believe that we'll be powering the future of currencies,” VIZIO’s Norcross said.

Case in point: As VideoAmp pilots alternate currency programs with five of the six major holding companies, it renewed its partnership with VIZIO to access Inscape ACR data from more than 18 million smart TVs. VideoAmp then commingles that ACR data with set-top box, smart TV, census, first- and third-party data, as well as census and panel sources.

NBCUniversal, which plans to adopt multiple currency providers to drive cross-screen measurement, is reviewing more than 80 responses from measurement companies to an RFP it issued last month.

“[ACR] is definitely a piece of the puzzle,” said Rich Hogan, NBCU’s VP of advanced advertising products. “ACR and a lot of these technologies give us a bit more insight into understanding how people are watching more content in different ways.”

Justin Evans, global head of analytics and insights at Samsung Ads, said advertisers can create their own measurement stack using ACR data at scale – a “powerful contributor” to insights about business performance. “Advertisers and agencies are living in a time of abundance,” he said.

The numbers: ACR footprint

Samsung Ads: 42 million opted-in Samsung smart TVs.

VIZIO: 19 million opted-in devices in the market.

LG Ads: 20 million US households.

Roku: Declined to specify

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