[INTERACTIVE WHITE PAPER] Interactive TV Advertising: A Marketer’s Guide

The UK has two Video on Demand (VOD) platforms in operation: Kingston Interactive Television (in Hull) and HomeChoice (owned by Video Networks and operating in Greater London). Both services use ADSL technology to establish broadband connections with consumers. The two services combined currently have approximately 30000 subscribers. The digital cable TV networks expect to launch VOD in 2002.

In an on-demand viewing environment there are far fewer traditional advertising opportunities (sponsorship of interactive services and content genres being some of the few options available). HomeChoice have also launched opportunities such as: on-demand interactive commercials, interactive market research screens, sponsored or voting/gaming applications.

Advertisers can anticipate two key advantages of VOD platforms in the future:
- The broadband networks involved will allow for faster viewer navigation and richer content within interactive services. This will be of particular benefit to retail sites and gaming channels.
- The one-to-one connection with viewers will allow for exact monitoring of how they spend their TV viewing time and how they respond to commercials. Messages and content could potentially be customised for specific individuals, depending on the level of profiling information available.

Two years ago, the TV industry was predicting the demise of the commercial revenue model due to the rise of on-demand viewing applications. What do you think are the key threats facing traditional commercial TV?

Agreed. I think those type of audience related issues (points 1 & 3) are far more significant than the impact of new technologies such as digital video recorders and VOD.

On point 2:
I think a revenue model based on commercial airtime still has a solid future but broadcasters need to embrace technology that allows them to make this airtime more effective (i.e. more profitable for themselves; more impactful and measurable for marketers). Interactive advertisements and enhanced programming are examples but are certainly only the beginning.

Nearly all the UK’s broadcasters had a knee-jerk reaction to multichannel TV and thought that the way to approach a fragmented, ad-adverse digital audience was by launching niche channels. [Note the failure of Sky’s ".tv", Granada’s "Wellbeing", Carlton’s "Taste"]

There was not enough focus on how to upgrade the medium’s ability to offer solutions to marketers’ problems.

On 12:40:18 29 November 2001 Barney wrote:
>how about:
>
>1. Dilution of audience groups within a single channel due
>to the multiplation of channels, making TV advertising
>less compelling (less reach), and potentially more
>expensive
>2. The sensitivity - vulnerability - of TV broadcasters to
>fluctuations within the advertising market. They need to
>effectively diversify their business
>3. Increasing Viewer Apathy - (within interactive
>advertising at least, especially once the novelty wears
>off?)
>
>
>On 02:24:14 26 November 2001 murray wrote:
>>[INTERACTIVE WHITE PAPER] Interactive TV Advertising:
>A
>>Marketer’s Guide
>>
>>The UK has two Video on Demand (VOD) platforms in
>>operation: Kingston Interactive Television (in Hull)
>and
>>HomeChoice (owned by Video Networks and operating in
>>Greater London). Both services use ADSL technology to
>>establish broadband connections with consumers. The
>two
>>services combined currently have approximately 30000
>>subscribers. The digital cable TV networks expect to
>>launch VOD in 2002.
>>
>>In an on-demand viewing environment there are far
>fewer
>>traditional advertising opportunities (sponsorship of
>>interactive services and content genres being some of
>the
>>few options available). HomeChoice have also launched
>>opportunities such as: on-demand interactive
>commercials,
>>interactive market research screens, sponsored or
>>voting/gaming applications.
>>
>>Advertisers can anticipate two key advantages of VOD
>>platforms in the future:
>>- The broadband networks involved will allow for
>faster
>>viewer navigation and richer content within
>interactive
>>services. This will be of particular benefit to retail
>>sites and gaming channels.
>>- The one-to-one connection with viewers will allow
>for
>>exact monitoring of how they spend their TV viewing
>time
>>and how they respond to commercials. Messages and
>content
>>could potentially be customised for specific
>individuals,
>>depending on the level of profiling information
>available.
>>
>>
>>Two years ago, the TV industry was predicting the
>demise
>>of the commercial revenue model due to the rise of
>>on-demand viewing applications. What do you think are
>the
>>key threats facing traditional commercial TV?