Consortium Turns to Vizio ACR Tech to Revive Sagging TV Ad Revenue
As cord cutting erodes the advertising-supported TV model, Vizio and media companies banded together to develop an open standard for “addressable advertising” on connected TVs. Project OAR, for Open Addressable Ready, is working to define technical standards for TV programmers and platforms to deliver “more relevant” ads within linear and on-demand on smart TVs, it said. The standard is designed to deliver “enhanced advertising products to brands, making the ad-supply chain more efficient, and giving audiences advertising content they are more likely to watch and enjoy,” it said.
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OAR was formed last year with founding members CBS, Disney's Media Networks, Comcast's FreeWheel and NBCUniversal, Xandr, Turner (now part of AT&T), Discovery, Hearst Television, AMC Networks, Vizio and Inscape. The charter is to “deliver better advertising experiences to viewers” through dynamic commercials on internet-connected TVs and devices. Consortium boilerplate says it provides technical specifications and best-practice provisions for the selling, targeting and measurement of TV ads “within privacy-compliant, consumer-forward TV environments.” The website also lists AT&T.
Vizio is the lone TV maker in the group, and the technology used to enable OAR will be developed by automatic content recognition (ACR) company Inscape, formerly Cognitive Media Networks, which Vizio bought in 2015 and was a second defendant in a class-action lawsuit brought against Vizio that year. Vizio customers alleged the company's smart TVs violated the Video Privacy Protection Act (see 1512170055).
In an SEC filing that year, Vizio described technology that “collects, aggregates and stores data regarding most content displayed” on Vizio smart TV screens, “including content from cable and satellite providers, streaming devices and gaming consoles.” The Inscape platform would be capable of providing “highly specific viewing behavior data on a massive scale with great accuracy, which can be used to generate intelligent insights for advertisers and media content providers and to drive their delivery of more relevant, personalized content” through Vizio smart TVs.
In 2017, Vizio agreed to pay $2.2 million to settle allegations it fashioned smart TVs to spy on consumers' viewing habits (see 1702060042). Last year, the FTC spelled out steps its smart TVs would have to incorporate to be compliant. On-screen disclosures would need a “Decline” button next to an “Accept” button, signaling a different process for rejecting data collection. Another disclosure would say that declining the TV’s viewing data collection capability “will not change the functionality.”
Tuesday’s OAR announcement said the consortium has “the initial pledge” from Vizio that “once the standard is developed it can be deployed on its opt-in footprint of connected TVs, though the protocol will be open and designed to enable any internet-connected TV maker and connected-device company to leverage it.” It outlined an “oversight” committee with representatives from Disney's Media Networks (ABC, ESPN and Freeform), Comcast's FreeWheel and NBCU, Discovery, CBS, Xandr, Turner, Hearst Television and AMC.
Inscape was spun off two summers ago under the control of Vizio founder William Wang after Chinese internet giant agreed to buy Vizio for $2 billion (see 1607260066). The deal disintegrated into legal acrimony months later. Vizio didn’t respond to questions Tuesday. Tier 1 TV makers LG, Samsung and Sony didn’t comment.
OAR gives programmers and distributors a better way “to monetize every TV impression through segment-based audience targets and addressable insertion,” the consortium said. Mike Dean, CBS senior vice president-advanced advertising and automation, said TV programmers reach a “massive and passionate audience,” but they haven’t been able to target ads. OAR will enable that, he said.
The initiative aligns with FreeWheel's objective to deliver scalable, addressable ads to make TV “an even more valuable platform for brand marketers,” said Dave Clark, general manager. An addressability standard for smart TVs complements MVPDs' solutions, he said.
The standard will define the baseline for ad delivery, impression verification and privacy compliance, said Jodie McAfee, Inscape senior vice president. “Networks will have plenty of room to create unique and enriched advertising experiences.”