The barriers preventing the take-up of interactive TV advertising are being broken down, but there are still some hurdles to be overcome before advertisers can effectively measure its worth.
Cost, measurement of effectiveness and differences in platforms’ and channels’ capabilities are all issues that continue to dog interactive TV advertising.
In the past, advertisers have raised concerns about the cost of producing different interactive content for each platform – satellite, cable and digital terrestrial.
Digital TV company Di3, part of Digital Interactive Television Group, in conjunction with Caiman Technologies, claims to be the first company to have developed the technology to make a single interactive ad work on all platforms (MW last week).
But advertisers will have to wait to take advantage of Di3’s service – and similar ones that are bound to be offered by other companies – as they are dependent on upon cable operators installing the operating system Liberate 1.2.
Carat interactive TV director Keith Rattray says: “The organisations that claim they can deliver interactive solutions across platforms may have the technical know-how to do so, but the infrastructure is not there. They might be getting advertisers unnecessarily excited.”
The system would enable people watching an interactive TV ad to click on a red button, which brings up information as an overlay, or leads viewers to a separate advertiser-dedicated site, as already happens on Sky’s digital satellite platform. Telewest Broadband is already using Liberate 1.2 for interactive programming, but has yet to run any red button-enabled interactive advertising. NTL is testing Liberate 1.2 and expects to go live with the system by the end of the year. Both cable platforms have, until now, only offered interactive advertising using banners and buttons outside the broadcast stream.
OMDtvi director Andrew Howells says: “What has been holding things up is that cable providers have had to put in the next version of Liberate.”
But far greater uncertainty hovers over the future of interactive advertising on digital terrestrial TV. Following the demise of ITV Digital, the Independent Television Commission is due to decide tomorrow which consortium will win the right to run digital terrestrial TV.
Even on digital satellite, only certain channels can be used for interactive advertising: some Sky channels, some Flextech and UKTV channels and Channel 4’s channels.
ITV and Channel 5 are not interactive ad-enabled. Although ITV is now available on satellite, the channel is still in financial negotiations with Sky to secure interactive capability.
Paul Longhurst, a consultant to The Allmond Partnership, says: “ITV spent far too long telling us it didn’t need to be on the electronic programme guide (EPG). Now it is on the EPG it is spending far too long trying to get interactivity going.”
One ITV insider claims that major interactive events on the channel will help drive viewers to watch the main terrestrial channels through their digital boxes and to use the red button, eventually taking interactive advertising into the mainstream and boosting revenue for all broadcasters.
It is likely that interactive content will become available on ITV before interactive advertising, as the latter involves complex discussions over payments to Sky and use of viewer information.
Apart from production and airtime costs, advertisers have in the past had to pay 50p to Sky for the details of each respondent to an ad.
Di3 claims that its system will help reduce the cost per response to 10p, as it employs a return path that bypasses Sky’s system. Viewers will input their personal details the first time they respond to an ad, in contrast to Sky’s system, which automatically identifies the subscriber responding to the ad and passes the details on to the advertiser.
Merlin Inkley, head of airtime management for Channel 4, which charges advertisers between 35p and 80p per response, is sceptical that operating costs can be covered by reducing the price to 10p.
Channel 4 has so far run six interactive campaigns, including two for Renault. Jon Williams, creative director of Publicis’s digital marketing division Publicis Networks, which helped create the ads, believes it is important to warn viewers that the ad is interactive and to give them a reason to press the red button. Renault’s Vel Satis campaign captured viewers’ attention by offering statistics on human behaviour. It then challenged them by saying “95 per cent of you will never press the red button”.
Research from BMRB shows that only 12 per cent of digital TV viewers have ever interacted with an ad. Of those that have, half acted out of curiosity.
That has not prevented advertisers trying out the medium and 50 interactive campaigns ran between October 2001 and March this year, compared to 15 for the period from April to September 2001. Response rates vary, but Coty’s Rimmel campaign, which gave away free samples of lipstick, delivered a response rate of 3.2 per cent.
A true comparison between the effectiveness of normal and interactive advertising has still to be made. Howells says: “We have to work out the value of an interactive impact versus a linear one. Once we have done that, we will finally have a currency that clients can buy into.”