Ownership of Smart TVs is rising, while over-the-top (OTT) viewership continues its steady climb. OTT market size globally is expected to reach $1,039 billion by 2027, with a CAGR from 2020 to 2027 of nearly 30%. Meanwhile, as of 2022, 71% of U.S. households have at least one Smart TV, and half of all TVs in use are Smart TVs. This represents a sharp increase since 2012, when only 11% of households owned a Smart TV.
This represents an unprecedented opportunity for marketers because, unlike traditional television, Smart TVs and OTT platforms can track viewership data using Automatic Content Recognition (ACR) – an invaluable tool for marketers to create efficient, targeted campaigns that maximize efficacy and ROI.
What is Automatic Content Recognition (ACR)?
ACR is an advanced technology embedded in smart devices that recognizes audio and video content. This technology is used in a variety of ways. For example, recognition software like Shazam uses ACR to identify songs playing in a public place. YouTube Content ID uses ACR to track the usage of copyrighted audio in videos.
When it comes to TV, ACR tracks viewership, which has far-reaching implications for marketers and content distributors. Viewing habits can be tied to viewers’ other data such as email addresses, IP addresses, and even physical addresses, giving marketers insight into what kind of content to suggest, which ads are being viewed, and even which ads seem to lead to purchases.
How does ACR Work?
ACR comes in many forms. In audio, songs are recognized using a method called audio fingerprinting, which recognizes audio based on the unique waveform of a particular recording. The technology then references a large database with matching fingerprints to identify content. Shazam uses this method to identify songs anywhere a user wants to identify what they hear. YouTube’s Content ID uses audio fingerprinting to monitor the usage of copyrighted material in videos.
OTT platforms and Smart TVs typically use video fingerprinting to collect viewership data. The reference database is mostly created automatically by computers in data centers that monitor TV and catalog what they see. This library is then cross-referenced against broadcast schedules to match video fingerprints to titles.
OTT platforms can easily embed ACR functionality into their apps with an SDK or library, and the software can track and catalog user actions like play, pause, stop, view count, and view length, presenting that data in management dashboards for decision making.
Smart TV ACR data is supplied via a convoluted and complicated network of vendors, some of which specialize in only one step of the process. There are a few companies embedding chips in Smart TVs, and only two of those – Inscape and Nielson Gracenote license data to other companies.
What is CTV and OTT Advertising?
ACR data is the key to effective CTV and OTT advertising. CTV – or connected TV – usually refers to Smart TVs – internet-connected televisions that can serve traditional linear TV or OTT content to viewers in their homes. But CTV can also mean any connected device that can serve OTT content.
OTT – or over-the-top – refers to content served via the internet without the need for traditional television networks. Netflix, Disney+, and Hulu are well-known examples of OTT services. OTT content can be delivered via Smart TVs, PCs, smartphones, gaming consoles, or other similar devices.
CTV and OTT advertising, then, is advertising specifically meant for these devices and platforms, with strategies informed by ACR data.
How Can Marketers Leverage ACR Data?
When it comes to advertising, CTV and OTT ads can leverage data that linear TV cannot. Viewership data alone can inform these ads which shows to promote to certain viewers, and since that data can be connected to other personal information, targeting for other ads can be tightly focused, giving advertisers an opportunity for a cheaper, more effective ad spend.
Furthermore, CTV ads can be served to viewers who haven’t seen linear TV ads, boosting reach by double-digit percentages. This can help TV ad buyers compensate for the declining reach that’s plaguing linear TV.
This kind of targeting is just the beginning for ACR data. Since ACR can also track ad viewership and even tie purchases to ads watched, this data can inform advertisers about the effectiveness of their OTT/CTV campaigns. ACR data can also help advertisers retarget viewers on other platforms and devices such as mobile devices and even social media.
With the right reporting and visualization, such as with MNI’s Motto, companies can understand the full scope of an OTT/CTV campaign – not just view count.
Understanding ACR Tracking
U.S. law requires permission to be obtained before enabling ACR on Smart TVs. This requirement has been monitored and enforced since 2016 when Vizio was fined by the FTC for using ACR without permission. Most manufacturers now include a tracking clause in initial agreements with ACR turned on by default. Users can, however, turn off ACR.
What it means when viewers opt out is simple: targeting those viewers effectively is harder. But as it turns out, most viewers don’t. In fact, according to Vizio, only about 10% opt out of ACR. This is partly due to confusing processes regarding changing privacy settings and long agreements that leave ACR on by default – most viewers simply say yes without reading and move on.
These practices aren’t without controversy, and this is part of why the future of ACR isn’t completely written. In the future, more opt outs may limit the effectiveness of ACR data, unless advertisers, content creators, and television manufacturers can leverage ACR data to not only create better campaigns but to improve the viewer experience.
Find Out How You Can Leverage ACR and CTV/OTT Advertising
ACR and CTV/OTT advertising can be a game changer for your bottom line – if you know how to use it. To get the most out of these tools, it’s important to work with experienced marketers who understand just how to leverage this type of data and build smart campaigns around it.
If you’re ready to find out how this kind of expert help can put you over the top, contact us to talk about your CTV/OTT advertising strategy.
