LG
Last month, Ars Technica went on a deep dive into the rapid growth of ads in TV software. Less than three weeks later, LG announced that it was adding advertisements to its TVs’ screensavers. The move embodies how ads are a growing and virtually inescapable part of the TV-viewing experience—even when you’re not watching anything.
As you might have expected, LG didn’t make a big, splashy announcement to consumers or LG TV owners about this new ad format. Instead, and ostensibly strategically, the September 5 announcement was made to advertisers. LG appears to know that screensaver ads aren’t a feature that excites users. Still, it and many other TV makers are happy to shove ads into the software of already-purchased devices.
LG TV owners may have already spotted the ads or learned about them via FlatpanelsHD, which today reported seeing a full-screen ad on the screensaver for LG’s latest flagship TV, the G4. “The ad appeared before the conventional screensaver kicks in,” per the website, “and was localized to the region the TV was set to.” (You can see images that FlatpanelsHD provided of the ads here, here, and here.) The reviewer reported seeing an ad for LG’s free ad-supported streaming channel, LG Channels, as well as third-party ads.
LG has put these ads on by default, according to FlatpanelsHD, but you can disable them in the TVs’ settings. Still, the introduction of ads during a screensaver, shown during a pause in TV viewing that some TVs use as an opportunity to show art or personal photos that amplify the space, illustrates the high priority that ad dollars and tracking have among today’s TVs—even new top-of-the-line ones.
According to LG’s ads arm, LG AD Solutions, the screensaver ads activate “across the home screen, LG Channels, and Content Store on LG smart TVs.” The point is to capitalize “on idle screen time, turning what may be perceived as a period of downtime into a valuable engagement opportunity.” LG AD Solutions claims that it has commissioned testing showing that screensaver ads drive “on average a 2.5 times higher lift in brand awareness.”
In a statement, LG AD Solutions CTO Dave Rudnick seemed to acknowledge that people whose TVs are showing screensavers are often trying to do something other than look at adverts.
“In the past, a screensaver ad might have indicated that viewers had left the room, but today’s viewing habits are markedly different,” he said. “Now, 93 percent of viewers multitask while watching TV, engaging in activities like messaging, shopping, browsing social media, or playing games on their phones.”
TV advertising: The next generation
The addition of screensaver ads that users can disable may sound like a comparatively smaller disruption as far as TV operating system (OS) ads go. But the incorporation of new ad formats into TV OSes’ various nooks and crannies is a slippery slope. Some TV brands are even centered more on ads than selling hardware. Unfortunately, it’s up to OS operators and TV OEMs to decide where the line is, including for already-purchased TVs. User and advertiser interests don’t always align, making TV streaming platforms without third-party ads, such as Apple TV, increasingly scarce gems.
LG has been expanding its business for selling and tracking ads shown on LG TVs. It has a partnership with Nielsen that sends automatic content-recognition data gathered from LG TVs to Nielsen, for example. Additionally, LG has boasted of plans to evolve from a hardware business into a “media and entertainment platform,” which includes selling ads. The South Korean company has also expressed strong interest in shopable TV ads.
For its part, LG’s growing ad interests have led it to launch a new LG Ad Solutions division this month that’s focused on developing new ways to show ads to and track smart TV users. In a statement, Rudnick said Innovation Labs is seeking to “push the boundaries” of smart-TV advertising and drive “next-generation advertising,” including interactive ads, on smart TVs.
LG is adapting to a changing market
LG claims to have done its homework before deciding to inject ads into its TVs’ screensavers. LG Ad Solutions-commissioned research, which was reportedly conducted and measured by Lucid, a consumer market research firm, found that screensaver ads increase brand awareness, especially among adults 45 and up and women with a household income greater than $80,000 (assumedly annually).
LG’s ads push comes as it’s challenged to continue finding revenue and growth from its TV business while TVs get more advanced and reliable and are able to get new features via software updates. Meanwhile, advertisers are challenged to find ways to continue reaching TV viewers in a world shifting from linear TV to streaming and web-based entertainment that’s often sold with the option of being commercial-free. Although lower-priced TVs, like those running Roku OS, may have a reputation for more ads, they’re also doing well in the market.
Market conditions and changing TV users’ habits are forcing LG to adapt the way it makes money from TVs. Unfortunately for those adverse to ads, that means pushing more commercials and finding better ways to track viewers.