Buyers now have a smorgasbord of BVoD, streaming and FAST channels through which to reach consumers at home. But smart TV inventory commands higher engagement rates from viewers because they remain within the home screen menu while choosing which TV show or film to watch.

Nielsen estimates that viewers spend as long as 10.5 minutes browsing on the home screen before they decide what to watch. And Hisense-owned VIDAA account for 7.8% of the smart TVs used worldwide, second only to Samsung’s Tizen OS (12.9%), per the Connected TV Marketing Association, giving advertisers access to a decent chunk of the CTV-viewing population.

“It’s essentially a billboard in your living room,” said Nexxen chief strategy officer Kenneth Suh.

As such, they’re a favored means of connecting with audiences for media and entertainment advertisers, including movie studios and streamers. VIDAA’s CEO Guy Edri hopes its integration with Nexxen can help it “open up this inventory to many more partners.” 

VIDAA is the first owner to make such inventory available programmatically. Though other players have programmatic arrangements in place  – Samsung Ads works with Magnite and The Trade Desk for non-smart TV ads, and also operates its own DSP – they’ve been reluctant to lean too far away from direct relationships for native home screen ads. 

Michael Scott, vp and head of ad sales and operations at Samsung Ads, said that selling direct means that the company can maintain a curatorial approach to selling ads. Opening the gate too wide, he suggested, might compromise viewers’ experience using its models.

“We’re a consumer electronics company first, and we want to make sure that the consumer experience is paramount,” he said. Rather than focus on its programmatic offering, Samsung’s worked to make its network more appealing to upper-funnel brand budgets. This week it added a “Competitive Conquesting” feature that allows advertisers to target the same audience cohorts as its competitors.

That’s a consideration media buyers also take into account. “We apply rigor around frequency capping, design placements that provide utility, and diversify OS partners to protect the experience,” said Lyndsey Garza, vp of programmatic at Dept. “If an ad feels disruptive, it won’t drive outcomes and, ultimately, no amount of targeting or data will justify it.”

The formats available on smart TVs represent another obstacle to programmatic investment. Operating systems use different format specs, and advertisers have to provide special cut-down assets to make use of them. It’s not an enormous cost, but it adds friction relative to other, more standardized channels.

As such, LG Ad Solutions’ CMO Tony Marlow expects direct to remain the primary tap for advertisers buying smart TV. “It’s [programmatic] not likely to be the majority any time soon,” he said.

Some players are working to sand down those differences; Samsung has gradually reduced the number of formats it offers from eight to just two, for example. “Those technical barriers are dissipating,” noted Dept’s Garza.

Currently, smart TV ads are a specialty play for advertisers that understand the value of a good first impression, noted Randy Gudiel, svp, media director at media agency Orci. LG Ads, for example, works with Disney, as well as IG Group, Jack in the Box, Clairol and Wells Fargo.

“These placements are not built for everyone,” he explained. “For brands that want visibility and impact, like entertainment, retail or automotive, the value is clear. If you are chasing immediate conversions, they will feel too premium.”

Gudiel estimated that smart TV ad spending might typically translate to 5% of an overall campaign budget at most. Programmatic buying and standardization of formats should open up the channel to more brands, though. “Even that little bit of access makes a difference. It takes out some of the friction, gives buyers a clearer sense of CPMs, and brings more competition into the mix,” he said.

Smart TV execs hope that advertisers will pick up on the format’s potential as a conduit for guerilla or reactive marketing. Brands priced out of soccer World Cup or Super Bowl inventory could, in theory, run “Big Game” ads on home screens without having to negotiate with NBC or Fox. Per an LG Ad Solutions survey of 500 U.S. adults, 63% of viewers say they tuned into a live event due to a home screen teaser ad, while 43% say they learn about where to watch sports from their home screen.

“Maybe you don’t have the wallet to be a sponsor of the Super Bowl or official sponsor of the Olympics, but you can buy a premium home screen CTV unit,” suggested LG Ad Solutions’ Marlow.

They’re also betting that increased spending by small and mid-sized advertisers on CTV as a whole can provide more fuel for the fire. “I believe the long tail will become increasingly a bigger part of the pipe,” said Marlow. “We saw it with regular, sort of digital, mobile Facebook. Meta has built an incredibly strong long tail, and we’re going to see that in the CTV environment as well.”

Nexxen expects to add more smart TV partners to its DSP in the future. “There are active conversations with a variety of OEMs,” said Suh.

“The ads will always carry a premium, but as more TV makers open up their inventory, they start to feel less like a one-off and more like something you can actually plan for,” added Gudiel.