What you need to know: 

• Alex Spurzem spent a decade building out Google's adtech business across APAC. Four years ago he joined Samsung to do the same thing. Back then it had around a million connected TVs in Australia. Now it has 3 million. It had three employees, and now has 40.
• Spurzem says revenue is tracking at a similar magnitude, because its ad audience has tripled to circa a million regular Samsung TV Plus FAST viewers, attracting north of 400 advertisers.
• Inventory is not an issue, he says, because Samsung Ads can "spin up" a new FAST channel in a week – it's now got more than 100. Spurzem reckons that's levelled the playing field with legacy media players.
• Insights into its customer's viewing habits have told Samsung Ads that there's a 70/30 split in the favour of streamers, and the vast majority of linear TV's viewing time belongs to less than a third of devices.
• Samsung Ads has first-party data at the centre of its offering for advertisers, and has recently engaged Infosum to build a clean room environment. But it does make the "no strings attached" positioning of its FAST channel service seem a little confused. 
• Meanwhile, Spurzem says Samsung Ad's decision to join the Video Futures Collective  – spearheaded by Foxtel Media CEO Mark Frain after a long-running spat with OzTam over audience measurement – came down to what it sees as a "state of imbalance in this country in terms of the understanding of the TV landscape and the investments and how they're made".
• Getting the industry aligned on measurement as the connected TV landscape evolves, says Spurzem, is vital.
• Then there's the issue of prominence, on which Spurzem is largely tight-lipped, but he does suggest that the ongoing debate over BVOD services positioning on smart TV home screens has ultimately "gotten in the way of doing business" for everyone involved.

Four years in, and Samsung's ad business is getting traction as penetration of its smart TVs climbs - there's now north of 3 million units now sitting in households across Australia. 

Samsung Ad's regional boss, Alex Spurzem, says that figure is up threefold from when he first joined the business in 2020, with the tech brand's native Free Ad-supported Streaming (FAST) channel service, Samsung TV Plus, now regularly watched by around 1 million households – up from 350,000 monthly viewers in 2021.

It now has 115 FAST channels courtesy of partnerships with the likes of Sky, Bloomberg and Euro News, as well as owned and operated channels like the Movie Hub Channel, and ‘bingeable’ single IP channels like The Nanny.

The user experience is more akin to “good old fashioned cable television” than a typical streaming platform, says Spurzem – “you tune into a channel, and you follow the programming at that time”. It’s a deliberate approach that he says is intended to solve decision paralysis on streaming services, which, per Samsung’s first-party data, costs users more than ten minutes per day – or 100 days across the average lifetime (and others agree.)

Shifting TV viewing habits in Australia has emboldened Samsung to tackle the traditional broadcast players as well. Based on Samsung’s user insights, Spurzem says there’s now around a 70/30 split in favour of streaming – and 80 to 90 per cent of linear viewing time is attributed to less than a third of TV sets and "quite frankly, that skews older", he suggests.

“We’re in the business of helping marketers and advertisers navigate how those habits have changed and how to reach audiences that are unreachable.”

The size of that opportunity has seen the headcount of Samsung’s Australia ad unit jump from three to 40 people working cross-functionally across sales, marketing, operations, data analytics and acquisition. Revenue, per Spurzem, has “roughly followed in that trajectory”, though he won’t be drawn on specifics. Talking numbers, he half jests, means “going to Samsung prison”.

From an advertiser perspective, Samsung Ads has amassed over 400 clients, and Spurzem says growing inventory to meet demand is as easy as switching on new channels – which has levelled the playing with the local broadcasters.

“Launching TV channels used to be a mammoth undertaking, and arguably, for a long time, it was the moat around some of Australia's media companies,” he says. “Now you can spin up a FAST channel in a week, if you would like.”

“That also means that if there is consumer demand for additional content, and if we see the opportunity to monetise additional content, we can bring that content on the platform.”

First-party data: some strings attached

Sitting natively on Samsung’s SmartTVs, the Samsung TV Plus app is pitched to consumers as the free, “no strings attached”, alternative to the likes of Netflix and Prime. Unlike the free BVOD offerings associated with Australia’s TV networks, users aren’t required to sign into the platform itself – though this is not much of a novelty given that users are required to be logged into their Samsung account to use their SmartTV in the first place.

With oversight of user’s viewing habits across the full-spectrum of AVOD, SVOD, BDOD and linear options available within the Samsung TV ecosystem, Samsung Ads has no shortage of first-party data. It’s also got solid targeting capabilities, enabled by technology partners like Experian and Infosum – with whom Samsung Ads has just built a cleanroom enabling things like data sharing, targeting and attribution "in a privacy-safe way", underlines Spurzem.

Samsung has a strong imperative to get things right ahead of the upcoming privacy overhaul in this market, particularly after copping heat globally in 2015 for burying first party data-gathering capabilities of its Smart TV’s voice recognition feature in the fine-print. It's not the only TV maker to get caught out. Smart TV maker Vizio, which Walmart aims to buy to broaden its own ads business, was fined $2.2m by the Federal Trade Commission in 2017 for collecting viewing data without viewers knowledge or consent.

While Samsung was quick to update its privacy policy to clarify (quite extensively) what exactly was being transmitted – and how the feature could be disabled – it left a bad taste for many. Spurzem, nor his employer, were prepared to discuss how that feature might be used by Samsung Ads today - though by the looks of Samsung's privacy policy, things have been tightened up.

According to the policy, “some interactive voice commands may be transmitted (along with information about your device, including device identifiers) to a third-party service provider (currently, Nuance Communications, Inc.) that converts your interactive voice commands to text”. It can be deduced that this text falls under the “log information” (usage data) Samsung may provide to advertisers and suppliers. But the window for information gathering in that respect is fairly narrow – the voice recognition feature must be enabled by users, and it only collects voice commands when activated through a button on the screen or remote control.

Old guard vs. new guard

The tension between between Samsung Ads and the free-to-air networks goes beyond Spurzem's dig at linear TV’s disappearing audience share. The business is also part of a new coalition of non-traditional players that ruffled the feathers of Australia’s broadcast TV cohort by launching their own industry think tank earlier this year.

Instigated by Foxtel Media (which pledged in last year’s Upfronts to bring an alternative audience measurement currency to market), the Video Futures Collective promises to “spark conversation, solve issues, and shine a spotlight on the fast-growing Australian digital video and streaming landscape”. It could also be viewed as the CTV-streamers answer to ThinkTV – the industry collective funded by the commercial networks, Seven, Nine and Ten.  

Samsung Ads is one of several high-profile members to have signed onto the new consortium, along with Foxtel Media, Disney Advertising, YouTube, and hybrid-funded domestic broadcaster, SBS. Netflix and Amazon have yet to commit, but are said to be supporting the initiative from the sidelines.

The think tank launch with three priorities, starting with building consensus on streaming basics, before moving into measurement, and then agency partnerships – a plan for which Omnicom Media Group (OMG) and Mediabrand’s Magna were early public backers.

“From our point of view, it was very clear that we wanted to not just partake, but drive this,” says Spurzem. Getting the industry aligned on things like measurement is “vitally important”, he added, given the money at stake. “We think there's a there's a state of imbalance in this country in terms of the understanding of the TV landscape and the investments and how they're made.”

As much as the Video Futures Collective initiative appears to have deepened division between the three main commercial free to air networks and the pay TV and streamer arrivistes, Spurzem says it’s in the best interests of advertisers.

“My view is that who needs to win is the advertiser,” he says. "What I’ve found consistently in my career is that smart advertisers will buy media that works. Let's make the advertisers smart, and then [let’s] have some media that works.”

Spurzem thinks that the competition between media owners for budgets, and their corresponding reluctance to collaborate with those on the other side of the fence, is “perfectly legitimate”.

“Maybe there's even something to be said about incumbents in this industry that have actually done a really good job at holding the line so far, in convincing advertisers that CTV equals BVOD,” he quips. “Whether that remains like this is to be seen. I don't know if it’s good for advertisers, but that will play out..."

Prominence battle

Another battleground between free-to-air networks and their streaming peers is that of prominence. And Samsung's electronics business, like all smart TV suppliers, has wound up in the middle of the debate.

Australia’s free-to-air television broadcasters have been lobbying hard for a prominence framework that would require smart TV manufacturers to prominently display their BVOD services on device homepages. It’s a push that comes hand in hand with their calls to safeguard free-to-air sport via reforms to the anti-siphoning scheme. Both are well on the way to becoming reality, with the Prominence and Anti Siphoning Bill having last month passed the lower house – though from the perspective of the network bosses it doesn’t go far enough.

For smart TV suppliers, like Samsung, the new legislation could throw a spanner in its commercial agreements with streaming apps that pay big bucks for a star position on their devices.

Those agreements result in free-to-air TV apps and content being pushed down the pecking order, with TV networks’ apps much harder to find and install in the first place than, for example, Netflix, Youtube or Amazon Prime.

Spurzem won't give much away on that front – he says the deals don’t fall under Samsung Ads.

However, he is happy to share his piece on the prominence debate itself.

“No matter where you sit on the arguments that have been brought forward, I think it has got in the way of doing business, maybe on occasion, even between Australia's largest media companies and OEMs [original equipment manufacturers, or in other words TV makers] in, objectively, ways that would be mutually and commercially beneficial to all parties involved.”

“And because of that, we're very much hoping that there's a quick and pragmatic end to this discussion.”

Officially, the Samsung position aligns with the submission put forward to the senate in January by the Consumer Electronics Suppliers Association (CESA), which represents all major television suppliers in Australia – including Samsung.  That is to say that Samsung opposes the proposal of a minimum prominence requirement for a pre-installed app, tile or link for each of Australia’s commercial and public BVOD services (i.e. 9Now, 7Plus, 10Play, ABC iView and SBS On Demand).

On behalf of its members, CESA argues that there’s no evidence Australians have difficulty navigating live or on-demand free-to-air TV, and they take issue with the burden of compliance (and associated costs) placed on suppliers and manufacturers if the proposed amendments to prominence legislation were to get up. It presents other alternatives that would see BVOD apps appear first in the App Store page for consumers to download or else have them grouped in a single tile on the homepage of smart TVs. Naturally, CESA argues that the networks should be made responsible for updating their apps to meet manufacturer’s development requirements, “at their own cost”.

But the TV networks don't buy those arguments.

"We’re not afraid of competition from SVOD players [streamers], that is not going to go away," one network exec told Mi3. "We’re afraid of being gate-kept. It's not about being given preference, it’s about consumers not being given a choice via a level playing field. Do we really want to get to a situation when all they can [readily] access is TV content they have to pay for, or Youtube?"

Spurzem would likely reply that FAST TV is free – and a million viewers appear to agree.