ALAN WOLK (AW): Your new report calls TV a "conversion medium." Can you explain what that means?

JUSTIN FROMM (JF):  Conversion is all about driving purchase at the bottom of the funnel—helping our advertiser partners drive sales of their products. TV has always been an upper funnel, brand message medium, though there have always been corners of it that drove sales like direct response TV. But today, there's this confluence of expectations and capabilities and data that make TV really performant in a way that it never was before.

It starts with the consumer. Consumers expect their screens to be interactive. Every other screen in your home is responsive, interactive and actionable, and the TV has to be too. We did a survey asking 1,000 Smart TV owners how they use their television. 84% of Americans use their TVs for more than just watching TV shows and movies. For younger viewers aged 25 to 34, that's 95%.

AW: What are some of the other things they use TVs for?

JF: They use it for smart home control—you can control all your connected appliances and lights through your Smart TV. There's gaming, and with Samsung's Gaming Hub, you don't even need a console. The games are right there on the television. But there's more than that. We have all of these apps on television sets, and we tend to talk about streaming apps, but there are plenty of other apps that are educational, like TED, or fitness apps. 

AW: How does the group viewing experience factor into TV becoming this centerpiece?

JF: TV has always been the center of the home, and now it's central to the home because it powers everything around it. While tablets and phones are personal devices, people gravitate towards the biggest and best screen in the home. That viewing is often done together, but that doesn't change the fact that TV can be performant. All of the data that comes off of the television set—everything that people watch, all of the interests they have, all the apps they use—that is interest-driven data. We know more than just what they want to watch. We know what they're interested in. On top of that, we have machine learning that helps us serve the right ad at the right time so that we're confident that an action will take place.

AW: How is “performance-driven advertising” different from traditional direct response?

JF: It's sort of not at all the same. DR TV was time-based—they knew when an ad aired and looked for a response within X minutes after. Those worked for specific products but required certain costs and aired at different times.

Today, any ad can be performant because we're in a one-to-one ad serving world. We understand and can build target audiences that we know will be responsive based on our first party data. As the TV manufacturer, we have line of sight across everything that happens on the TV, as well as our clients' first party data. We can build audiences that are predictive of action, and we have data and machine learning about ad serving.

Multiple variables can be predictive of whether someone who sees an ad will actually take action. Our models are driving tremendous performance, well above benchmarks, for actions like app downloads or in-app purchases and return on ad spend.

AW: Are today's performance ads also doing branding work, unlike traditional DR?

JF: Every television ad is also a branding ad. What's different now is we can really be scientific about making sure there's seamless branding that works across an advertiser's campaign, whether it's the brand ad building awareness or the performance ad driving performance. That continuity in brand messaging exists so it's all working together. When we talk about conversion TV, we emphasize the power of television being performant because that's new. But the truth is, it's really the best full funnel medium because every ad is also driving awareness, and that repeated awareness is part of what drives performance.

AW: You mention buy buttons in the report. Are you looking at reducing friction the way Amazon does with stored payment information?

JF: Our approach is to reduce friction for consumers and advertising partners as much as possible, really taking the consumer's lead. We have interactivity on our television sets and announced we'll be launching shopping breaks. We already have game breaks where consumers can use their remotes to play trivia games during ad breaks. That type of activity will also lead to using the remote control to buy through their TV set. We've done research with consumers—they're comfortable and ready to buy through television. It comes down to brand trust, and Samsung is among the top three brands that consumers trust most.

AW: How does shopping work in group viewing situations?

JF: The user experience of television is to sit and consume content. The idea of stopping to go out of the experience to buy can be jarring and maybe not the best user experience. That's why shopping breaks and buy buttons where you make it seamless, where you don't need to pause the television to buy but have the experience built in—that's where the seamless experience works. The excitement in a group around something like "Mahomes has these crazy glasses, you need to buy them"—that excitement is actually very positive for advertisers.

AW: Could a lot of this happen on second screen devices?

JF: There can be click to buy on your phone, click to SMS, click to email, click to save for later. If we follow the consumer's lead and they want to buy on their phone, we want to make it available. We don't want to force behavior on them. The behavior exists, the expectation and excitement about being able to buy what you see on television exists. We're just making it seamless and serving ads at the right time, in the right moment to the right person, so advertisers see performance.

AW: You say TV needs to evolve to meet this need. How specifically?

JF: It's an advertising evolution. We've been talking about evolving the 30-second ad for a very long time. The 30-second ad is great because it drives awareness, but we can evolve that and drive performance. We can utilize the same ads with slightly different messages and use all of the data we have at Samsung as the OEM that sees everything consumers are doing on that television set to understand their interests. We can use machine learning to serve the ad at exactly the right moment to drive purchase.