Vizio Pursues A Late-Mover Advantage In CTV Ad Sales

With the launch of an ad sales division in December, Vizio is taking full advantage of the work its competitors have done to educate buyers on CTV advertising.

“We’re piggybacking on the success of Roku, Samsung and Amazon,” said Mike O’Donnell, SVP of Vizio’s platform business.

Similar to other device makers, Vizio’s proposition is to continue to monetize one-off smart TV sales through ongoing ad sales. For buyers, the opportunity is to reach a unique audience on one of the nation’s largest smart TV manufacturers.

“One out of five smart TVs sold in the United States is a Vizio television,” O’Donnell said. “We’ve got a consumer base that isn’t on any other platforms.”

Vizio’s inventory consists of an owned-and-operated ad-supported channel and display ads on its home screen. Like competitors, it also negotiates rev-share deals with publishers that distribute content on its platform, and it uses proprietary ACR data to package and sell audiences across its network.

But unlike Roku or Samsung, Vizio came to market first with its data unit Inscape, which allows brands to manage reach and frequency and deduplicate audiences across OTT and linear buys.

“We enter the marketplace with experience and brand recognition about why we have quality data,” O’Donnell said.

He spoke with AdExchanger.

AdExchanger: Why does Vizio need an advertising business?

MIKE O’DONNELL: It’s no secret TV margins aren’t very good. We’ve looked at ways we can drive incremental revenue streams. Data was one we focused on early to help with the user experience. It’s very easy for us to transition that into an ads business.

Clients continue to tell us direct-to-device offerings are of high interest. They can buy CTV inventory at scale and layer on ACR data. And [they get] comfort with the protections we have from owning the device.

Why did you model your business off of Samsung and Roku?

I give Roku tremendous credit in educating the marketplace on why they should shift dollars into connected TV. As we’re jumping in, we wanted to add another supply source for advertisers to be able to shift those dollars out of linear TV, because that’s where it’s coming from.

We’re very competitive with Samsung and TCL on the hardware side. When it comes to the operating system, rising tides lift all boats.

Is there anything unique about your offering besides your audience footprint?

It’s pretty standard. Providing targeting and measurement solutions that are similar to others in the space makes it easy for an advertiser to buy one way in one similar format across the board. But we’re focused on making it easy to work with us.

How have agencies received your pitch?

We launched subtly early last year doing some programmatic. We started to get our supply in the marketplace and layer on targeting through Inscape.

Now we’re bringing direct sales to the fold. But we’re not going to reinvent the wheel. We’re packaging up the offering in both an addressable and an extended reach format, which is the two ways advertisers and agencies buy connected TV.

Why did you launch Inscape before Vizio Ads?

We did the hard part first. We built out our ACR data set. We started to work with agencies, networks and app partners to get them acclimated with our data.

Inscape has been helpful from a measurement perspective by educating agencies and networks about where viewers are watching. Now you can leverage that to target against our supply.

What’s the incentive for a buyer to go through Vizio rather than content owners directly? 

TV networks will always have direct sales efforts across multiple distribution channels. We’re packaging those so marketers don’t have to go through multiple channels.

The challenge is frequency. If I’m buying ads from Pluto, Vizio and Tubi, how am I making sure I’m not hitting someone over the head with the same ad five times in a row? That’s where the Inscape data comes in. We have the ability to manage against incremental reach and frequency and recognize what’s being viewed on our platform across both linear and in-app.

How do rev-share deals with content owners get made? What goes into those discussions?

They want their app on our platform. That model is no different than for a cable channel to be on an MVPD.

Most of it is standard stuff: What are the data and measurement opportunities? How can you help us drive engagement, subscriptions and reduce churn? Everyone will tell you there’s a streamlined approach. That’s not the case. All of those deals are slightly different.

Roku bought dataxu. Samsung has a DSP. Do you need a DSP?

We just launched a team. We don’t have to buy a DSP yet. There are pros and cons to doing that. As we ramp up we’ll assess parts of the tech stack that we may want to build or buy.

What are the pros and cons?

It’s less for us about a DSP and more about our approach toward a walled garden. We’re still sorting that out. As of now, we’re an open marketplace.

How are you innovating on ad units to make the viewing experience better? 

We’re working with partners to enable advertising experiences, whether those be interactive or commerce-enabled. Where there’s demand for it, we’ll make it accessible.

But as you see in digital, that’s only going to be a portion of the marketplace. Clients are still going to want to buy either in an addressable fashion or against incremental reach.

This interview has been edited and condensed.

 

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