According to ArsTechnica, companies such as LG, Samsung, and Roku are now placing greater emphasis on ad sales and user tracking capabilities within their televisions.
Automatic content recognition (ACR) technology, which scrutinises viewing habits, is becoming a pivotal tool for advertisers. TV manufacturers are collaborating with data firms to bolster targeting capabilities, with LG recently sharing data with Nielsen and Samsung enhancing its ACR technology to monitor streaming ad exposure.
This evolution raises concerns about privacy and user experience as televisions become more commercialised and data-centric. Industry experts foresee a "shoppable ads" surge and a deeper integration between TV viewing and e-commerce platforms.
Omdia practice leader of consumer electronics analyst Patrick Horner said that the trend of smart TV advertising revenue surpassing hardware revenue (along with ad sale margins exceeding those of hardware) is currently confined to the US. However, it shows no signs of waning.
OLED technology has become a staple in the TV market, and until the next significant display technology emerges, original equipment manufacturers (OEMs) are scrambling to generate revenue in a saturated market brimming with budget options. Selling ads is an obvious strategy to bridge the gap until the advent of the next major innovation in television technology.
Samsung and LG are forging substantial deals with analytics firms and other brands centring their business models around advertisements, the industry's fixation on ads is set to intensify.
TV commercials, which have become more frequent over time, once the advertising genie is out of the bottle, it tends to expand rather than retreat. One consequence already noted by Horner is "a proliferation of more TV operating systems."
While increased choice is often beneficial for consumers, it is crucial to consider whether new options from companies like Amazon, Comcast, and TiVo genuinely enhance the smart TV experience for users.
OS operators' financial success is linked to the number of hours users spend viewing content on their platforms.
In May, Roku's senior director of ad innovation, Peter Hamilton, mentioned to Digiday that his team collaborates closely with Roku's consumer team, "whose goal is to drive total viewing hours." Consequently, many smart TV OS operators focus on simplifying content navigation through artificial intelligence.
