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How Publishers Can Defend Revenue When OEMs Build Native Ad Sales Into Smart TV Home Screens

Discover strategic approaches for CTV publishers to protect ad revenue as smart TV manufacturers expand native advertising on home screens.

How Publishers Can Defend Revenue When OEMs Build Native Ad Sales Into Smart TV Home Screens

Introduction: The Living Room Land Grab

The connected television revolution promised publishers a golden opportunity: a return to the premium, brand-safe, living room environment that broadcast television had dominated for decades, now supercharged with digital targeting and measurement capabilities. That promise is being tested. Original Equipment Manufacturers (OEMs) like Samsung, LG, Vizio, TCL, and Roku are no longer content to simply manufacture the glass through which content flows. They are building sophisticated native advertising businesses directly into their smart TV operating systems, capturing user attention and advertiser dollars before viewers ever launch a streaming app. For publishers who have invested heavily in CTV content and advertising infrastructure, this represents both an existential challenge and a strategic inflection point. The home screen has become the new battleground, and OEMs hold the keys to the castle. This article explores the dynamics at play, the revenue implications for publishers, and most critically, the strategies that forward-thinking content companies can deploy to defend and grow their advertising businesses in this increasingly competitive landscape.

Understanding the OEM Advertising Expansion

The Home Screen Advantage

When a consumer powers on their smart television, they do not immediately see a publisher's content. They see the OEM's home screen, a carefully designed interface that serves as the gateway to all streaming experiences. This home screen real estate has become extraordinarily valuable. OEMs control:

  • First-party viewing data: ACR (Automatic Content Recognition) technology captures what users watch across all inputs, including linear TV, gaming consoles, and streaming apps
  • Device-level identity: Persistent device identifiers that span all applications and viewing sessions
  • Content discovery: Algorithmic recommendations that influence which apps and content users engage with
  • Native ad placements: Banner ads, sponsored tiles, screensavers, and interstitial experiences that appear before any app loads

The strategic calculus for OEMs is straightforward: hardware margins are thin and competitive, but advertising margins are substantial. A smart TV that sells for $400 might generate $50-100 in annual advertising revenue over its 7-10 year lifespan, fundamentally changing the economics of the television business.

The Scale of OEM Advertising Operations

The numbers tell a compelling story. Roku, which operates primarily as a platform rather than a hardware manufacturer, generated over $3.8 billion in platform revenue in 2024, with the vast majority coming from advertising. Samsung Ads has grown into a multi-billion dollar operation serving ads across 75+ million connected TVs in the United States alone. LG Ad Solutions, Vizio's Inscape and WatchFree+ businesses, and Amazon's Fire TV advertising operations have all scaled dramatically. Even traditional manufacturers like Sony and Hisense are building advertising capabilities into their Google TV and proprietary interfaces. These are not peripheral businesses. They are central to OEM strategy and profitability.

What OEMs Are Selling

The advertising products OEMs offer have become increasingly sophisticated:

  • Home screen display advertising: High-impact banner and tile placements visible during navigation
  • Content sponsorships: Branded content rows, sponsored recommendations, and featured app placements
  • Screensaver and ambient advertising: Ads displayed when televisions are idle
  • Native video units: Auto-playing video ads within the interface
  • Cross-device targeting: Leveraging household graphs to extend campaigns across mobile, desktop, and CTV
  • First-party data segments: Audiences built from ACR viewing data, app usage patterns, and purchase intent signals

Many OEMs have also launched their own Free Ad-Supported Streaming Television (FAST) channels, creating owned-and-operated inventory that competes directly with publisher content for both viewer attention and advertiser budgets.

The Revenue Implications for Publishers

Direct Competition for Advertiser Budgets

The most immediate impact is straightforward: every dollar an advertiser spends on OEM home screen inventory is a dollar not spent on publisher inventory. CTV advertising budgets, while growing, are not infinite. When a brand allocates spend to Samsung Ads for home screen placements, that budget comes from somewhere. Often, it comes from the pool of dollars that might otherwise flow to premium streaming publishers. This competition is particularly acute because OEM inventory and publisher inventory often serve similar campaign objectives. Both offer:

  • Large-screen, living room reach: The core value proposition of CTV advertising
  • Household-level targeting: Demographic, geographic, and behavioral audience segments
  • Brand-safe environments: Controlled, premium contexts
  • Measurable outcomes: Attribution and performance tracking capabilities

From an advertiser's perspective, the choice between OEM and publisher inventory often comes down to cost efficiency, reach extension, and campaign goals rather than fundamental differences in value delivery.

The Data Asymmetry Problem

Perhaps more concerning than direct budget competition is the data asymmetry that OEM positioning creates. OEMs see everything. Their ACR technology captures viewing across all inputs. Their device identifiers persist across all applications. Their household graphs connect viewing behavior to broader consumer profiles. Publishers, by contrast, see only what happens within their own applications. They may have rich first-party data about their authenticated users, but they lack visibility into competitive viewing, cross-app behavior, and the broader household context. This asymmetry has significant implications:

  • Targeting precision: OEMs can offer advertisers audiences built from comprehensive viewing data, while publishers can only leverage their own, more limited datasets
  • Measurement and attribution: OEMs can provide cross-platform reach and frequency management in ways individual publishers cannot
  • Pricing power: Superior data often commands premium CPMs, shifting pricing leverage toward OEMs
  • Advertiser relationships: Brands increasingly look to OEMs as strategic partners for CTV campaigns, potentially relegating publishers to execution partners

Discovery and Distribution Risks

Beyond direct advertising competition, OEMs control the discovery and distribution layer that determines whether consumers find and engage with publisher content in the first place. A publisher's app might be buried several screens deep in the interface, while competitor apps (or the OEM's own FAST channels) receive prominent placement. Algorithmic recommendations can favor certain content over others. Search results can be influenced by commercial relationships. This creates a subtle but significant form of leverage. Publishers who refuse to participate in OEM advertising partnerships, or who compete too aggressively, may find their distribution disadvantaged. The threat need not be explicit to be effective.

Strategic Responses: How Publishers Can Defend Revenue

Strategy 1: Double Down on First-Party Data and Identity

The most sustainable competitive advantage for publishers lies in their direct relationships with authenticated users and the first-party data those relationships generate. While OEMs have broad but relatively shallow data (they know what devices watch, but not necessarily who is watching or why), publishers can develop deep understanding of individual viewers:

  • Subscription and registration data: Verified identity, demographics, and payment information
  • Content engagement patterns: What users watch, how they watch, when they pause, rewind, or abandon
  • Cross-platform behavior: Viewing across CTV, mobile, web, and other touchpoints within the publisher ecosystem
  • Declared preferences: Genre interests, content ratings, notification settings
  • Transaction history: Upgrades, add-ons, pay-per-view purchases

This data, properly activated, can power targeting capabilities that OEMs cannot easily replicate. A streaming service that knows a household contains sports enthusiasts, documentary lovers, and children's content viewers can offer advertisers precision that device-level ACR data cannot match. Tactical recommendations:

  • Invest in identity resolution: Build robust systems for recognizing authenticated users across devices and sessions
  • Develop data clean room capabilities: Enable advertisers to match their first-party data against publisher audiences in privacy-compliant ways
  • Create unique audience products: Package first-party data into differentiated segments that cannot be purchased elsewhere
  • Leverage contextual signals: Combine user data with content metadata to offer contextual targeting at scale

Strategy 2: Build Direct Advertiser Relationships

OEMs are winning advertiser relationships by offering simplicity: a single point of contact for broad CTV reach across millions of devices. Publishers can counter by offering something OEMs cannot: deep partnership and custom solutions. Premium publishers have historically underinvested in direct sales capabilities for CTV, relying heavily on programmatic channels and SSP relationships. This approach, while operationally efficient, cedes relationship control to intermediaries and makes publishers interchangeable in the eyes of advertisers. Tactical recommendations:

  • Invest in CTV-specific sales teams: Hire or train sellers who understand the unique dynamics of streaming advertising
  • Develop custom partnership offerings: Content integrations, sponsorships, branded entertainment, and exclusive placements that OEMs cannot replicate
  • Create direct deal infrastructure: Private marketplaces, preferred deals, and programmatic guaranteed capabilities that make direct buying efficient
  • Offer cross-platform packages: Bundle CTV inventory with mobile, web, audio, and other touchpoints for comprehensive campaigns
  • Provide creative services: Help advertisers develop CTV-specific creative that leverages the unique capabilities of the streaming environment

The goal is to become a strategic partner rather than a commodity supplier. Advertisers who view a publisher as essential to their CTV strategy will allocate budget even when OEM alternatives exist.

Strategy 3: Differentiate on Content and Context

OEM home screen advertising is, by definition, context-free. The ads appear in a navigation interface, disconnected from any content experience. This creates an opening for publishers to emphasize the value of contextual adjacency. Research consistently demonstrates that advertising viewed alongside relevant, engaging content performs better than advertising viewed in interstitial or navigational contexts. Emotional engagement transfers from content to advertising. Brand safety is inherent rather than achieved through filtering. Tactical recommendations:

  • Invest in content metadata: Develop rich taxonomies that enable precise contextual targeting at the episode, scene, or moment level
  • Offer contextual sponsorships: Allow advertisers to align with specific genres, themes, moods, or storylines
  • Develop attention metrics: Measure and demonstrate the superior engagement of in-content advertising versus interface advertising
  • Create premium placements: First ad in pod, sponsor integrations, pause ads, and other high-attention units
  • Emphasize brand safety: Publishers control their content, while OEM interfaces aggregate content from multiple sources with varying quality

The narrative shift matters: publishers should position their inventory as premium, engaged advertising opportunities rather than simply additional CTV reach.

Strategy 4: Optimize Programmatic Infrastructure

While direct relationships are strategically important, programmatic demand will remain a significant revenue source for most publishers. Optimizing programmatic infrastructure can improve yield and reduce OEM competitive pressure. Many publishers have underinvested in their programmatic technology stack, particularly for CTV. Legacy configurations designed for display and mobile advertising do not capture the full value of streaming inventory. Tactical recommendations:

  • Implement supply path optimization: Work with major DSPs to establish direct, preferred paths to your inventory
  • Maximize signal density: Ensure all available first-party data, content metadata, and device information is passed in bid requests
  • Adopt advanced ad formats: Server-side ad insertion, dynamic ad insertion, and interactive formats that command premium CPMs
  • Implement unified auction strategies: Ensure programmatic and direct demand compete fairly for each impression
  • Monitor fill rates and latency: CTV viewers have low tolerance for ad delivery failures or delays

Strong programmatic fundamentals ensure that publisher inventory remains competitive in automated buying environments where OEM inventory is also available.

Strategy 5: Leverage Industry Collaboration and Standards

Individual publishers, even large ones, lack the scale to counter OEM market power alone. Industry collaboration through standards bodies, trade associations, and buying consortia can level the playing field. Tactical recommendations:

  • Participate in industry identity initiatives: Support efforts like Unified ID 2.0 that enable cross-publisher targeting without relying on OEM identifiers
  • Adopt measurement standards: Implement IAB Tech Lab specifications for CTV advertising to ensure comparability with OEM inventory
  • Engage in collective negotiation: Work with other publishers to establish shared positions on OEM data access, distribution terms, and advertising policies
  • Support transparency initiatives: Advocate for clear disclosure of OEM advertising practices and inventory sources
  • Contribute to open standards: Participate in developing specifications that prevent proprietary lock-in

The advertising industry has successfully collaborated to address previous platform challenges. Similar coordination can help publishers navigate the OEM advertising expansion.

Strategy 6: Explore OEM Partnerships Strategically

Not all OEM engagement is adversarial. Strategic partnerships can provide benefits while mitigating competitive risks. OEMs need premium content to attract and retain consumers. Publishers need distribution and discovery. There are potential win-win arrangements that serve both interests without publishers surrendering excessive value. Tactical recommendations:

  • Negotiate data reciprocity: Seek access to relevant ACR and device data in exchange for distribution partnerships
  • Pursue revenue-sharing arrangements: Participate in OEM FAST platforms with favorable economics rather than ceding the space entirely
  • Secure discovery advantages: Trade advertising inventory access for preferred placement in OEM interfaces
  • Establish clear boundaries: Define which inventory and data you will share, and which remain exclusive to direct sales
  • Maintain alternatives: Ensure no single OEM relationship becomes so critical that it creates dependency

The key is approaching OEM relationships with clear strategic intent rather than reactive accommodation.

Strategy 7: Invest in Measurement and Attribution

The ability to demonstrate advertising effectiveness is increasingly central to commanding premium pricing. Publishers who can prove their inventory drives business outcomes will outcompete OEM inventory that offers reach without equivalent measurement. Tactical recommendations:

  • Implement advanced attribution: Move beyond basic delivery metrics to measure brand lift, website visits, app installs, and conversions
  • Develop attention measurement: Capture and report engagement signals that demonstrate active viewing
  • Enable clean room integration: Allow advertisers to measure campaign performance against their own first-party data
  • Pursue third-party validation: Work with independent measurement providers to verify delivery and outcomes
  • Create performance benchmarks: Develop case studies and industry benchmarks that demonstrate publisher inventory value

In an environment where advertisers face pressure to justify every dollar, publishers who provide clear evidence of return on investment will maintain budget share.

The Role of Intelligence and Research Tools

Navigating the OEM advertising landscape requires robust market intelligence. Publishers need visibility into:

  • OEM advertising operations: Which platforms are selling what inventory, at what scale, and through which channels
  • Competitive positioning: How rival publishers are responding to OEM competition and what partnerships they are forming
  • Advertiser behavior: Where brands are allocating CTV budgets and how those allocations are shifting
  • Technology evolution: What ad tech capabilities OEMs are building and acquiring
  • Market pricing: How OEM inventory pricing compares to publisher inventory across different audience segments

Tools that provide visibility into the CTV ecosystem, including app distribution, SDK implementations, advertising relationships, and technology stacks, become essential for strategic planning. Understanding where OEMs are investing, which SSPs they are working with, what targeting capabilities they are building, and how their advertising products are evolving enables publishers to anticipate competitive moves and position accordingly. Similarly, intelligence on the broader CTV landscape helps publishers identify partnership opportunities, benchmark their capabilities, and prioritize development investments.

Looking Forward: The Evolving Landscape

The tension between OEMs and publishers is unlikely to resolve quickly. Several trends will shape how this dynamic evolves:

Privacy Regulation and Identity Changes

Increasing privacy regulation and the deprecation of traditional identifiers may actually advantage publishers with direct user relationships. If third-party tracking becomes more restricted, first-party data and authenticated user relationships become more valuable. OEMs may face scrutiny over their data collection practices, particularly ACR surveillance. Publishers with transparent, consent-based data practices may find regulatory tailwinds.

Consolidation and Vertical Integration

The streaming landscape continues to consolidate. Larger media companies have greater leverage in OEM negotiations and more resources to invest in competitive advertising capabilities. Smaller publishers may need to consider aggregation strategies, joining forces to achieve scale in advertising sales and technology investment.

Technology Evolution

Advances in AI, real-time optimization, and creative technology will create new advertising capabilities. Publishers who invest in innovation may develop offerings that OEMs cannot easily replicate. Conversely, OEMs with deep technology resources may accelerate their advertising product development, raising the competitive bar.

Advertiser Sophistication

As advertisers become more sophisticated in their CTV buying, they may place greater value on inventory quality, contextual alignment, and measurable outcomes rather than simple reach metrics. This evolution could favor publishers with strong content and measurement capabilities over OEMs selling undifferentiated home screen inventory.

Conclusion: Playing the Long Game

The expansion of OEM native advertising represents a significant challenge for CTV publishers, but not an insurmountable one. Publishers who respond strategically, investing in first-party data, direct relationships, differentiated inventory, and measurement capabilities, can defend and grow their advertising businesses even as OEMs capture a larger share of the overall market. The key is recognizing that this is a long-term competitive dynamic rather than a crisis requiring immediate capitulation. OEMs have advantages in some areas, but publishers have advantages in others. The goal is not to win every battle, but to build sustainable competitive position. Publishers should resist the temptation to view OEMs purely as adversaries. Strategic partnerships, carefully structured, can benefit both parties. The advertising ecosystem is large enough for multiple successful participants. But publishers must also resist the temptation to simply accommodate OEM expansion without response. Passive acceptance of a diminished role will become a self-fulfilling prophecy. Active strategy, investment, and innovation are essential. The living room remains the most valuable real estate in advertising. Publishers who understand the dynamics of the OEM advertising expansion, develop clear strategic responses, and execute with discipline will continue to capture their share of that value. The competition for the smart TV home screen is just beginning. Publishers who engage thoughtfully will shape how it ends.

This article represents the informed perspective of Red Volcano's strategic analysis team, drawing on our deep expertise in CTV advertising ecosystems and publisher intelligence. For more insights on navigating the evolving connected television landscape, explore our CTV data platform and publisher research tools.