See what's coming to that box in your living room in 2006: the president of Arise Communications talks about the present and near future of iTV.
Editor's Note: New columnist Andrew Rosenman will be moderating a panel at iMedia's March Breakthrough 06' Summit: "Beyond the Box: Video Programming and Ad Creativity via New Channels."
A few months ago -- and conspicuously just before the launch of the NFL season -- some subscribers to digital satellite broadcast networks DISH and DirecTV were suddenly given the ability to preview multiple channels on a single screen.
Football fans across the nation rejoiced, ending forever the torment of switching between late fourth quarter games only to miss the key plays in both. Even with a DVR installed, it's all-too-easy to miss the big moment -- not exactly what the "on demand" future had promised.
When hurricane Katrina struck, news junkies became the first to recognize the power of the multi-screen preview feature where wall-to-wall coverage could be seen in aggregate; live feeds of the devastation from news channels like CNN, MSNBC and FOX meant they were all able to constantly merchandise their coverage through relentless images of human suffering. This is TV interactivity in its most primitive form, providing real programming choices to TV viewers in real time. The question now is how does an advertising-supported content distribution model of television make use of this same opportunity?
Recently there has been a great deal of discussion regarding the coming of age of interactive television -- the consistently adolescent technology that may finally be on the verge of mass acceptance.
While there is no single common definition of iTV, for the purposes of this piece we will include everything from VOD movies to enhanced broadcasts that require users to keep a live internet connection on a PC during viewing. In a broader sense, any kind of viewing behavior that requires human input or response can be thought of as iTV. It seems likely, then, than the same direct response TV that has been with us for decades could be the first -- and potentially the most commercially viable -- model for iTV that marketers can use to divine the future.
While the benefit to subscribers seems obvious, the opportunity for marketers is more elusive: how can these user-controlled technologies be leveraged to get more, not less, out of already premium priced television media? There is no single answer, but it seems clear that the first marketers to understand the behavioral shift occurring in living rooms will have a substantial advantage over competitors in the future.
Let's begin with the multi-screen applications being deployed by DBS (Direct Broadcast Satellite) media outlets. There are a few reasons why this will work for -- and against -- major advertisers. Primarily, if a viewer knows that a commercial is running on a channel they want to access, the chances of changing to that channel fall. (Note: in some cases where the ad or product is well known and there is affinity for the brand, some viewers will regard the ad as programming and want to see it. This is further reinforcement of the assumption that better creative executions deliver better recall and awareness of messages.)
On the plus side -- and this should not be discounted -- even with a viewer simultaneously scanning eight smaller programming screens, there is only one audio track available at any given time, meaning that even without the full attention of a viewer key copy points cans still get through.
Programming guides and VOD
As the terrestrial cable companies follow suit to provide these types of preview services to subscribers, the game will change more fundamentally.
What the satellite providers lack -- compared to cable -- is a reliable data stream through a back channel from the household. This back channel provides the critical targeting and usage data that will allow for better presentation of viewing options through interactive program guides. And these guides will include information about on-demand, pay-per-view and scheduled broadcasts.
Viewers will be able to preview the first several minutes of programming, even live programming on a delayed signal, before confirming the selection. The fact that these actions and decisions can now be measured and analyzed creates an interesting new situation for advertisers and programmers: positioning of an advertising pod within the program will become geometrically more important to advertisers. Currently this is a murky part of the entire ad trafficking process, but it will have a growing impact on future ad effectiveness and response.
Response to advertisements will be measured not only by standard measures like unaided recall and awareness, volume of call center traffic and general "lift," but there will also be performance metrics associated with campaigns similar to conventions developed for online advertising.
A consumer can suspend the viewing experience to further investigate, in full motion video, the product or service that has piqued their interest. The programming can be rejoined at the time of departure through DVR technology that will be ubiquitous on all digital tiers. Moreover, the consumer has the opportunity to opt-in for further communications by the advertiser. Routed through the cable or satellite provider, these responses can be reverse matched to the behavior and programming selection choices exhibited on the set-top box, giving the advertiser more relevant data to work with when defining messaging platforms.
This is already happening in many markets.
Mercedes-Benz USA and the new M-Class SUV
For example, when Mercedes-Benz USA launched the redesigned M-Class sport utility vehicle in March of 2005, they elected to use this type of campaign to initiate dialogue with the most interested consumers. Viewers who were initially made aware of additional content through a graphic shown during the 30-second launch spot were able to see the vehicle in multiple colors and trim configurations, access a long form video that was a humorous extension of the commercial and request either dealer contact or printed literature.
Dealers contacted these households within five business days, and had real leads delivered to them on a daily basis.
Given that vehicles are one of the longest-considered purchases, this campaign represents an acceleration of the typical automotive sales funnel that was able to provide consumers with the "experiential" opportunity of kicking the tires without subjecting them to the physical intimidation of a new car lot.
The real breakthrough of the campaign was not the telescoping of content from short form commercial to long form product information, but the use of addressability.
Addressable advertising
Addressable advertising is simply the ability to place specific ad messages in front of specific consumers. The criteria for this can vary based on the need of the advertiser, but the fact that this is now available to advertisers will profoundly change the advertising landscape.
In the case of Mercedes-Benz, invitations to events where the new vehicle could be experienced and driven at a local branded event were delivered only to viewers in targeted zip codes. Viewers outside of these zip codes had no knowledge of the parallel campaign.
In other words, addressable advertising is the beginning of targeting via television.
The down side
The barriers to acceptance of these new forms of advertising are formidable.
Traditional media planning, negotiation and buying is predicated on a relatively predictable model pioneered by the big three networks at a time when they cumulatively controlled the entire available audience.
Moreover, the practice of associating advertising with specific programming content (e.g., primetime Thursday is NBC's "must see TV" night), and therefore with specific day parts, will deliver diminishing returns once ad insertion is dynamically driven into programming based on viewer and household profiles.
Sponsors may be able to ensure that messaging is connected to specific programs, but this has diminishing returns as well -- particularly in the case of VOD where a timed promotion like a Labor Day sales event may be less relevant if it is not viewed during a specific window of opportunity.
Measurement is also the changeling in the mix, forcing media planning into accepting the science of predictive modeling based on actual data and -- more ominously -- into creating performance projections that can be measured in real time.
The transparency and efficiency of this new type of measured media will drive the dynamic valuation and pricing of advertising opportunities in the future. The job of attributing value to media properties will become similar to taking a picture of a molecule: by the time you can see the picture the electrons, protons and neutrons have all moved again.
Andrew Rosenman is the founder and president of Arise Communications Inc., a strategic marketing concern in New York specializing in emerging technologies and their application to brand advertising. Rosenman has throughout his career worked with leading automotive, technology and household brands to deliver breakthrough, first-in-class marketing campaigns utilizing new technical platforms. Andrew is an interactive marketing veteran dating back to 1994 as a producer for Magnet Interactive Studios in Washington D.C. He has worked for multiple global clients in international locales including Paris, Geneva, Barcelona and Singapore. He was most recently the Account Director for interactive agency Critical Mass where he managed the full complement of Mercedes-Benz USA integrated online marketing initiatives. Andrew was educated at McGill University in Montreal, Canada, and has pursued graduate-level coursework and is an instructor on the faculty of the New York University School of Marketing Communications.