VIZIO’s Well-Timed Entry Into The Ad Business Is Just The Latest Iteration For The Brand

This interview is an excerpt from TVREV’s new Special Report on the Emerging Smart TV Ecosystem. Download your copy here.

“The way I look at it is that this is the next phase of what has been a 19-year journey for VIZIO. We came to market as a scrappy American start up offering the first connected TV that consumers could afford. We kicked ass in picture quality and price and steadily held roughly 20% of device sales for the last seven years. 

Fast forward to today and we’re offering consumers an integrated software solution with hundreds of free channels, easy integrations with platforms like Apple, Google and Amazon and we are partnered with every major media company as a key driver of tune in and commerce. ” explains Mike O’Donnell, Chief Revenue Officer of VIZIO’s Platform Business.

“In 2015, we created our own operating system, and over the past six years, we’ve spent a lot of time and effort towards making that a great user experience. For us that meant making it quick to respond, easy to use, and providing the user with great content right out of the box—that’s where WatchFree+, our FAST comes into play.”

Q: What factors made VIZIO decide it was time to get into the ad business?

A:  It’s always been on the roadmap and we were able to sell ads before SmartCast, our currently operating platform. But in late 2018 the market finally reached a point of maturity where we had the scale of activity across AVOD and FAST to make investing in a full-fledged, next-generation advertising operation a reality. 

We launched VIZIO Ads in 2019, and that gave us a powerful new revenue stream. We already had a best-in-class ACR-based data business in Inscape, so the combination of the two has proven very attractive to brands. That’s generated new revenue that we’re plowing back into content, so we’re able to offer more and better programming along with a continually evolving and improving interface.

Q: What advantages do consumers and advertisers get from working with a company that owns both the programming and the hardware?  

Two words: integrated experience. What I mean by that is integrating the hardware and the software creates the best consumer experience possible. We don’t rent our operating system or the hardware that carries it. So when we invest in the consumer experience we can think and act based on what will be the best experience possible. 

We’re able to source all the right content, the shows people want to see, and using data, we can start to optimize what people discover, when and how. 

When you can provide the consumer with a huge benefit like that, it also becomes a huge benefit to the advertiser, because you have a more engaged viewer who is watching more TV.

We’ve got over 160 free channels and even more free content available across a really wide range of genres. And we have the ability to marry that with our ACR data. And that enables great addressable targeting which in turn creates an even better user experience and an even better ad experience.

For advertisers, there’s an additional advantage to the direct-to-device strategy—we can help marketers reach consumers not just on the TVs but across all devices in the home. The combination of a unique inventory footprint coupled with data that you can only get by going direct to device is a huge plus for advertisers, as it gives them more precise targeting that is easier to buy and easier to measure.

Q: One of the biggest complaints you hear from both consumers and advertisers is that there’s no frequency capping on CTV, that the same ads play over and over. How can owning the hardware and software help solve that?

A: In order for us to continue to focus on building a great user experience, we need to be able to manage frequency. It’s important that consumers are seeing an advertiser’s message at the right time in the right environment, but it’s also important to manage how many times that consumer is going to see that ad on a daily basis. 

Owning the hardware and the software gives us the ability to look at everything that hits the glass, regardless of where it comes from. So we can see what ads people are seeing on linear, on streaming, even on a gaming console, and then determine how many times they’re seeing them that week, that day or that hour. 

We recently rolled out a product called universal frequency, which is an opportunity for advertisers to manage frequency by user or by device across both the linear and streaming environments. We can do that precisely because we own the hardware and the software, so we can track exactly what they are watching and which ads they’ve seen.

Most brands don’t reach households enough, however. Linear isn’t delivering the saturation and reach it once did, which is why CTV has taken off. We are the best possible solution for hitting the millions of consumers that turn on our products — every day for 7 years.

Q: You recently launched something called Household Connect, what is that?

A:  I mentioned earlier that we aren’t just selling access to a unique audience and inventory on our TVs, we are offering advertisers to use the biggest screen in the house as the anchor to reach VIZIO audiences across mobile, desktop, and tablets both inside and outside the home.

And when you do that, the Household Connect product that the VIZIO ad team sells now becomes one of the largest audience extension platforms in the market. That is a huge, huge advantage to advertisers and agencies who are looking to extend the reach and frequency of their linear and streaming campaigns onto personal digital devices.

So maybe the consumer was exposed to an ad at seven o'clock last night in primetime. And tomorrow when they’re taking their morning walk and browsing the web, they can actually then receive a secondary message from that same advertiser, along with other relevant ads.That’s going to help with reach and awareness and help create multiple touchpoints for the brand in a way that doesn’t seem overly aggressive the way many cross-platform campaigns can seem. So we see it as a huge advantage for our advertisers.