Spott, the start-up that will revolutionize TV advertising

Intro

Imec’s latest digimeter research (2016)  indicated that television remains the most popular medium for video. Seventy-eight percent of Flemish people still watch television on a daily basis. Nevertheless, our viewing behavior has changed drastically in the last few years: recording has become common place. This evolution towards time-shifted viewing has also affected the advertising industry, as we frequently fast-forward commercial breaks. This, in combination with the fact that TV has also become a more passive medium, often playing in the background while we browse the internet on our laptops, tablets or smartphones, makes TV advertising a lot less effective than it used to be. Consequently, many advertisers prefer new, cheaper media like Facebook, Twitter and YouTube instead. For broadcasters – who rely on the income generated through advertising – this is bad news, but for the founders of Spott – which was originally called Appiness - it was a business opportunity. They developed a new app that takes product placement to a whole new level: with just a few clicks you can order the product you’ve seen on TV. Spott collaborated with imec to test and optimize their business idea.

Spott. Watch. Click. Discover.

We love multitasking. While watching TV, many of us are also using our smartphones. Spott jumped on this trend and launched a smartphone app that has the potential to revolutionize TV advertising. The Spott app uses the audio to automatically detect which show and which episode you’re watching. The app then shows you a screenshot with an overview of all products that are featured on your TV screen. The dress or watch worn by your favorite actress, the blender used in your favorite cooking show, the pretty coffee table in that talk show, etc. If you click on the product, you are immediately taken to an online shop. And one click later you’ve ordered the product. 

The only condition is that the program has been analyzed by Spott in advance. In Belgium, Spott has already managed to convince some of the most important TV channels of its added value. Each day about four and a half hours of interactive content is broadcasted on Belgian TV. Offering interactive TV shows makes it easier for TV channels to attract potential advertisers. But it also creates a more complete viewer experience. Research conducted by the imec.livinglabs team indicates that using the Spott app increases viewers’ involvement with TV content. People do not just use the app as an efficient purchasing tool, but also as a source of inspiration.

Spott doesn’t only offer this service via the ‘Spott’ app, but also offers a white label (Apptvate) that allows channels to adapt the app’s interface to their specific needs. Apart from TV channels, Spott also wants to attract the advertisers themselves. For instance, for a Belgian clothing company (JBC) they developed an interactive ad that takes you straight to their online shop. Or imagine a Peugeot commercial that allows you to book a test ride with just one click. In this way, the Spott app immediately acts upon consumers’ desires and eliminates any time to doubt. The app basically offers them the product on a silver platter. For advertisers, a second advantage is that the return on invest is more visible with Spott. They get an overview of the most popular products, the number of viewers and the number of clicks. In this way, Spott combines the broad reach of TV commercials with the traceability of internet ads.

The beginning: the importance of joint innovation

Before developing the Spott app, the founders first tested the water in a joint innovation project. Together with imec and Ghent University they submitted an industrial R&D project to Flanders Innovation & Entrepreneurship (VLAIO) and received a 440 000 euro grant to set up their project.

Part of this budget was used by researchers at imec – University of Ghent (IDLab) to develop the ‘temporal slicing method’ with optimal keyframe selection. This was essential to make Spott succeed as a company. To be profitable, they need to be able to make a 1-minute video interactive in just 4 minutes. As a 15-minute video typically consists of about 27,000 images, this is not an easy target. But with the temporal slicing technology developed by imec - Ghent University the video content can be simplified, reducing it to 300 images per 15-minute video. They select the frames that provide an optimal view of the product, allowing Spott to present clear images to their users. The remaining 300 images are then screened by different algorithms to create a timeline that can linked to the video.

But the technological aspect was not the only potential hurdle that needed to be overcome. The Spott founders also wanted to make sure that there was a market for their app, not just with the end consumers, but also with the channels themselves. In collaboration with imec.livinglabs they set up an 18-month trial period involving consumers as well as the Belgian media industry (Medialaan and VRT).  The first step was to test the concept with end consumers: do people like this app? Would they use it, and if so, for which programs? Which interface is most user-friendly? In a second step a closed version of the app was tested by about 300 consumers who participated in both qualitative and quantitative (questionnaires) research. The final step was an open test. The aim was to launch the app in August 2015 and start off by recruiting 10 000 consumers while expanding the range of interactive videos on offer. However, due to a press leak, Spott was featured on the front page of a popular Flemish newspaper and overnight more than 50 000 users had downloaded the app.

This video provides more information on how Spott’s story started in collaboration with imec (the former iMinds) and Ghent University.

Conquering the world click by click

Spott’s mission is to become the go-to company for interactive video. In Belgium, they are well on their way to achieve this goal. In collaboration with the Flemish media industry, they keep expanding their offer of interactive video content.

"Since the launch in 2015, the app has been downloaded 160 000 times. Each month Spott gets about 55 000 active users, good for 500 000 monthly product clicks and 10 000 virtual shopping baskets."

But Spott also has a strong international ambition. Their headquarters is located in Aalst (Belgium), but their 24 employees work in offices in London, Rio, Sao Paulo, and Lisbon. By the end of 2017, they will be offering interactive TV content in Brazil, Portugal and the Netherlands. In the meantime, they are also continuously expanding their online presence.

On the road to success: ups and downs

When asked which advice he’d give other young entrepreneurs, Jonas de Cooman (founder and co-CEO) answered that it’s important to keep believing in yourself and your concept even if you meet setbacks along the way. 

As with most start-ups, the Spott team experienced some ups and downs on the road to success. At the end of 2014, Jonas De Cooman and Michel De Wachter (CEO) applied for the imec.istart program – imec’s business incubation program that supports tech start-ups with coaching, facilities and funding – but Spott didn’t make the selection. Jonas and Michiel didn’t give up, took the feedback into account and prepared for another, more ambitious round. This time they tried to land an imec.icon project. Imec.icon is a formula for cooperative research with multidisciplinary research teams. They didn’t make the selection here either, but a few months later – after having gained more experience in the field - they submitted an industrial R&D project together with imec. This application was successful and they received over 400 000 euros. Since then things have evolved rapidly for Spott. 

Nevertheless, they don’t intend to rest on their laurels just yet. They have recently submitted another request for additional funding, together with imec, imec - Ghent University (IDLab), PSI - KU Leuven – imec, and Stadius - KU Leuven. The aim of this new project is to further enhance their video analysis tool so they can reach a 3 to 1 ratio, i.e. they want to be able to analyze a 1-minute video in just three minutes.

For Jonas De Cooman and Michel De Wachter, 2017 was a magnificent year. First, they received the golden AMMA award (Annual Marketing and Media Award) for best innovation and development the Flemish media sector in 2017. Then they were also named company of the year (Aalstse Broeikas) and ICT start-up of the year (Data News). Internationally, they also made it to the Disrupt 100, an annual list of companies that are believed to have the potential to disrupt the market. Spott’s disruptive potential lies in the fact that their app could reclaim part of the advertising budget that has moved from TV to online media like YouTube and Facebook. By making TV advertising more interesting again, some of that funding might return to (national) TV channels.