One of the best things about streaming content on smart TVs is that they allow owners to consume from various subscription platforms ad-free. However, Vizio plans on destroying that sanctuary with its next generation of products. The California-based company is working with a slew of marketing firms and broadcast networks to develop a standard that will allow for smart TV targeted advertisement distribution.
Vizio calls its new development program Project Open Addressable Ready (OAR). Notably, it involves input from broadcast television heavyweights like CBS and NBCUniversal. Once complete, the standard will be available to all smart TV manufacturers. Consequently, all new internet-enabled televisions would be able to shill products to their owners based on their interests.
Currently, a lack of HTTP cookie support prevents smart TV targeted advertising. However, the public’s growing disinterest in broadcast television means the major networks need a new way to monetize their content. A new industry standard for addressable advertising would solve that problem. Plus, it would provide the smart TV industry with a robust profit stream to serve as a marketing channel.
Currently, Vizio is the number two smart TV brand in America behind Samsung.
Vizio’s First Attempt at Smart TV Monetization
Notably, Project OAR isn’t Vizio’s first attempt at monetizing its customers’ personal data. In 2017, it was revealed Vizio bundled data collection software in 11 million of its TVs. Vizio’s spy program was on by default as opposed to those used by other smart TV manufacturers.
The firm’s application gathered a robust amount of owner data, tracking every second of what viewers watched. Vizio then sold that incredibly valuable personal information to various advertisers. The Federal Trade Commission (FTC) deemed the company’s practice deceptive and reached a $2.2 million settlement with the electronics manufacturer.
The FTC also created new recommendations for smart TV makers about obtaining owner consent before collecting data. That ruling changed the way the internet integrated TV brands approached consumer privacy. However, Vizio’s troubles didn’t end there. The corporation also paid out $17 million to the 16 million people affected by its undeclared spying application.
Why Do Smart TV Companies Want Owner Data?
Given their last disastrous attempt at monetizing owner data, you may wonder why Vizio is launching their new initiative. The answer is the business of making televisions isn’t very profitable. Vizio Chief Technology Officer Bill Baxter explained during a podcast appearance, the TV manufacturing field is a “6-percent margin industry.”
With such razor-sharp margins, a few bad product launches could tank even an established company. So, to stay viable, smart TV manufacturers need to cultivate additional revenue streams. As it happens, the targeted advertising market is worth around $21 billion.
Still, Vizio and its counterparts should consider the perils of information harvesting before making it a core part of their industry. The home electronics giant lost millions by not making the proper disclosures years ago. But these days, people get outraged at data collection even when they agreed to it.
Turning smart TVs into the new social media may not go the way Vizio hopes.