• by Jack Loechner , Staff Writer @mp_research, September 17, 2013

A new U.S. study into the impact of Smart TV advertising and consumer behavior, by YuMe and LG Electronics, to better understand how consumers are engaging with ads within Smart TVs, includes data on the Smart TV audience’s behavioral, lifestyle and psychographic profile. With global Smart TV shipments reaching 12.7 million units in the first quarter of 2013, the appetite for Internet-connected TV is growing among consumers, creating a thriving platform for brand advertisers, says the report.

The study examined consumers within a natural living room environment, interacting with and sharing their perceptions of different Smart TV ad formats, while testing brand metrics including recall, favorability, and purchase intent. 67% of respondents indicate that they have engaged, or would consider engaging with, a Smart TV ad because it advertises products/brands they are interested in.

Youngjae Seo, Vice President of Smart Business Center at LG Electronics, says “Smart TV… a unique and exciting opportunity for consumers to interact and respond directly to an ad in-screen… brand advertisers find better ad campaign effectiveness and ROI on Smart TVs… accompanied with traditional TV…”

Big screen convenience is the most common primary advantage, say the respondents.

Advantage of Smart TV AD
Benefit	% of Respondents
Big screen more convenient to watch	45%
Large variety of different types of ads	14
Can purchase the product right away	13
More trustworthy	11
More informative	7
Ads are intriguing and interactive	6
Ad format is innovative and interesting	5
Source: YuMe/Nielsen, August 2013

Picture in picture ads on SmartTV leads to increase in most campaign metrics.

Key Campaign Metrics
	(Positive Response; % of Respondents)
Measurement	Traditional TV	SmartTV
General recall	42%	52%
Brand recall	34	66
Message recall	26	44
Ad likeability	54	64
Purchase intent	66	58
Recommendation	66	70
Source: YuMe/Nielsen, August 2013

The Smart TV is being used for more than just TV. Many users report high app usage and 17% are likely to decrease or cancel their cable subscription in the upcoming year, a 13% increase from last year.

Features Used At Least Once A Week
Feature	% of Respondents
Watching free Internet video content	61%
Browsing the Internet	60
Watching paid Internet video content	50
Connecting to social network service	34
Use application	31
Playing online games	29
Downloading application	24
Using video telephone (Skype)	23
Source: YuMe/Nielsen, August 2013

90% of Smart TV owners are satisfied with their devices and 81% prefer using a Smart TV over a traditional TV set. 63% would like a 2nd Smart TV for bedroom.

Viewers of Smart TVs are generally young, higher income professionals. Smart TV users are tech savvy, professionals with an influential role on household purchase decisions. They are also likely to pay a premium for the latest technology and brand names.

Respondent Profile

• 42% under 40 years old
• 35% over $120K HH Income
• Most Smart TV households are multiple person dwellings
• Smart TV purchasers have high purchase decision responsibility within their household
• 78% are Married or Living with partner

 

           Age            % of Respondents

• 25-29     15%
• 30-34     14
• 35-39     13
• 40-44     12
• 45-49     12
• 50-54     12
• 55-59     13
• 60-64     10

Source: Source: YuMe/Nielsen, August 2013

The report indicates that users of Smart TVs can be categorized in four distinct user segments, finding that affluent technologists and social youngsters were most receptive to Smart TV advertising. The four segments are described as:

• Affluent technologists
• Social youngsters
• Traditionalists
• Mid-life families

Segmentation Overview

Affluent Techie (22 %)

• Enthusiastic about new technology and entertainment
• Willing to pay more money on new products and technology
• Younger and well educated
• Higher household income
• Have strong responsibility for supporting family
• Make good use of Smart TV features and react actively towards Smart TV ads
• Have purchased products advertised

Social youngster (25 %)

• Interested in new technology and entertainment
• Regard social bonding important and use social network service frequently
• Younger and well educated
• Medium household income
• Sometimes use Smart TV features
• Accept Smart TV ads by searching more info. of the products advertised

Traditionalist (19 %)

• Don’t have a lot of interest in technology
• Less focus on family and social network
• Don’t want to pay much additional money for new products
• Older and lower household income
• Sometimes watch TV alone
• Use Smart TV like traditional TV (concentrate more on only TV, don’t use Smart features often)
• Rarely click on Smart TV ads

Family oriented midlife (35 %)

• My family is always first
• Don’t have a lot of knowledge in technology
• Purchase goods for family
• Practical in spending
• Older and highest household income
• Spend more time watching TV and satisfied with current TV
• Don’t use Smart TV features skillfully
• Rarely click on Smart TV ads

Michael Hudes, Executive Vice President of Emerging Markets, YuMe, says “… results… affirm a growing Smart TV market… opportunity for advertisers to increase brand engagement through Smart TV… understanding how people engage with Smart TVs… “

For additional key findings from the YuMe-LG study, as well as methodology and a copy of the full report, please visit here.