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Interactive TV will transform advertising

Written on
Mar 17, 2009 
Author
Peter Low  |
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Interactive TV will transform advertising

online_video_small.jpgADOTAS — One of the primary issues discussed during last month’s Interactive Advertising Bureau’s (IAB) annual conference is how industry leaders should prioritize measurability versus creative integrity.

 Recently, a high return on investment has become the priority for advertisers as they increasingly demand more bang for their buck in a down economy. However, when measuring ROI, it’s essential for advertisers to balance three equally important criteria to determine a campaign’s success — measurability, brand awareness and the ability to reach critical mass.

For the past several years, major advertisers have been shifting their television advertising dollars to the Internet. The reason for this shift is that the Internet allows advertisers to engage in a two-way dialogue with consumers and it provides increased measurability and accountability.

However, by diverting their television dollars to the Internet, advertisers are making significant sacrifices. One of the biggest sacrifices is reach. While an advertiser might be able to reach several million people with a successful Internet advertising campaign, they aren’t able to reach the mass audience that television can deliver. In addition, advertisers are sacrificing the massive branding power of television. Simply put — no other medium in the world has the power to build a brand like television can.

So what options do advertisers have? One increasingly popular option can be summed up in two words – interactive television. With Interactive television, advertisers get the best of both worlds — the reach and branding power of television with the accountability and engagement of the Internet.

It’s true that, for almost a decade, interactive television has been a promised ‘nirvana’ for advertising; but this promise has never come to fruition. There are several reasons for this – from high costs of implementation to complex distribution challenges. But with the formation of Canoe Ventures in 2008 and the adoption of EBIF & tru2way by cable and IPTV providers, many of the barriers to the success of interactive television have been resolved.

In fact, some estimates project that over one half of U.S. households will be wired for interactivity by year’s end — as cable, satellite and IPTV distributors begin to embrace interactivity. Additionally, analyst firm SNL Kagan states that 23 million of those homes will be connected via cable subscriptions; this is important since the majority of homes in the United States utilize the services of cable distributors.

So what benefits can interactive television provide advertisers? First, interactive television makes it possible for advertisers to transform their traditional television commercials and sponsorships into interactive experiences that powerfully engage viewers. There are examples of interactive television campaigns that have increased viewer engagement 4 – 6 times (from 30 seconds to 2 – 3 minutes). In addition, interactive television provides web-like performance metrics that allow advertisers to optimize their campaigns and ultimately achieve the higher ROI now in demand.

And finally, interactive television gives advertisers the ability to reach a mass audience and take advantage of the branding power of television. According to Continental Research, interactive television increases brand awareness by up to 70% and consumers who engage with interactive television advertising are twice as likely to make purchases.

All of these benefits are making interactive television impossible for advertisers to overlook. And now that it is poised to reach critical mass this year, it has become a viable option for advertisers needing to showcase measurability and increased brand awareness while engaging with large audiences. It’s taken a while for interactive television to reach this point, but now that it’s here, the benefits to advertisers are endless.





Reader Comments.

Interactive TV is the holy grail for advertisers but the market is still highly fragmented. Open source platforms that harness the power of the Web’s content are going to be the next big thing. I am using Boxee on the Apple TV which is the best implementation of ITV I have seen so far.

Posted by David Griffith - http://www.teamDigital.com | 4:21 pm on March 17, 2009.

ITV works best when the consumer knows that their viewing of ‘what they turned on the TV for’ is not disrupted. If ITV takes people away from their desired content (even if only for seconds)without the ability to pause (and pick up right where they left it)- it teaches the consumer to ‘not go there’ as often as we might hope. ITV on a DVR platform does provide this consumer benefit – and helps the consumer to know they are still in control throughout.

Posted by Bob Pares | 9:53 am on March 19, 2009.

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