Connekt is a new advertising start-up that’s hoping to help future-proof the monetization of television content by enabling viewers to interact with the adverts on the TV set. The company, which just launched earlier this month, is also attempting to bring t-commerce – that’s television commerce – to market with a solution that pairs the connected TV set to the viewer’s mobile phone.
“We’re focused on future-proofing TV advertising, to make it more effective and more targeted and make it behave, frankly, more like digital advertising,” Mike Fitzsimmons, CEO of Connekt, told Faultline Online reporter, “from the perspective that consumers can engage with ads, they can take action with those ads, and in some cases consumers can even directly purchase within those ads.”
The solution uses an AI machine to deliver in-ad or in-content overlays offering opportunities for engagement. The AI machine, named CARL, can identify what program the viewer is watching, and what’s going on, on the screen, within the content, whether that be a character driving a specific car, or a Target commercial highlighting specific brands of clothing.
“Really what CARL is doing is being able to process millions of pieces of data in real time to be able to identify what’s on and what’s in what you’re watching,” Fitzsimmons said. “Carl has a series of algorithms that enables it to dynamically deliver more relevant offers to you the end user. That’s what happening behind the scenes.”
CARL is able to do all that using automatic content recognition (ACR) technology from Nielsen-owned Gracenote. But in order for CARL to work, Connekt needs to have integration at the device level. Device integration typically presents a scaling issue itself, if the company can’t get enough device makers to sign up. So far, Connekt’s partners include LG, TiVo, Hisense, Amazon and Sony. Fitzsimmons didn’t give a precise number of households reached but said it’s in the tens of millions. Connekt’s publisher partners include HBO, Showtime and CBS, at present.
The idea is that a brand or agency will work with Connekt to develop, for example, a set of advertising overlays for a specific campaign, aimed at delivering a specific KPI. Dunkin Donuts, for example, might run a campaign hoping to drive donut purchases across a specific region. Working with Connekt, Dunkin Donuts can create a set of geographic-specific coupons for a free coffee that will appear as an in-ad overlay when a viewer watches the campaign ad on a connected TV. From the viewer’s perspective, when the Dunkin Donut’s campaign begins playing on the TV set, an overlay pop-ups on the screen offering the viewer a coupon for a free coffee. If the viewer is interested, the coupon can then be pushed to the viewer’s mobile phone.
But Fitzsimmons insists Connekt isn’t just another way to buy Jennifer Aniston’s famous sweater. “That’s a potential use case, but that’s not the real opportunity,” he said. “It’s undeniable that it’s a different day and age than when Jennifer Aniston was on television.”
According to research firm NPD Group, 60% of households have at least one TV connected to the Internet, which to Fitzsimmons means there’s scale for this type of offering that wasn’t available five years ago. And he pointed to other trends that may support the rise of t-commerce.
“The other thing to think about is consumer purchasing,” he said. “You’ve got an e-commerce business that is now $400 billion – but that was zero 20 years ago. Consumers are getting more trained to purchasing directly online. We don’t even think about some of the things we use to worry about in the early days of e-commerce.”
Then there’s the fact that consumers are more glued to their smartphones now than ever before. Consumers are happy to use their smartphones for price checking or coupon redemption while in a store, and increasingly consumers are shopping directly from their phones.
And finally, brands have modernized their own relationships with consumers. “Most brands weren’t selling directly back then,” he said. “Only about 60% of brands are actually selling directly to their users. There’s still growth on that front. P&G now has an online store. That’s the age we’re in.”
Instead, he claims that adding a layer of interaction onto TV ads will help those ads become more effective, by essentially bringing in some of the same engagement principles of marketing used on digital devices like mobile phones. In other words, Connekt’s platform is more about bridging digital, interactive advertising principles and features with lean-back, linear TV viewing scenarios.
“Advertisers spend billions of dollars to get you to buy stuff on TV. The real opportunity is to help shorten that purchase funnel with that end user,” he said. “If the machine works properly, and the advertiser is happy, they’ll ultimately buy more advertising from the publisher.”