Interactive Television: Where Does Advertising Go From Here?
By Jason Brewster
Commercials are the fuel for today's broadcasters. They pay for the great car races and golfing events and public broadcasts of box office hits, cult television classics, and original programming. Television networks aren't in the not-for-profit business, and other than PBS, they all depend on advertising revenue to support the airwaves.
For years, television tuners and set-top boxes have done nothing to help diversify the revenue channel for broadcasters beyond 30-second advertisements. Consumers don't like the intrusive nature of this type of advertising, and until now, they use proactive methods to ignore it.
One method that consumers are using to avoid commercials on television is to "flip the channel." There is an imaginary clock inside viewers' heads that knows when to flip back after a commercial break. My wife employs her own technique to avoid ads. She won't let us listen to commercials; instead, she pushes the mute button during every brief intermission. My response to commercials is usually to run to the kitchen or toilet. Everybody does something to avoid advertisements. Is it possible that the executives at all of the big networks stay glued to the television during commercial breaks?
Fortunately for broadcasters, proactive efforts by consumers like me don't diminish their large financial returns. Media buyers continue to spend the lion's share of their budgets on television advertising. Television is still the most powerful medium to create brand awareness. Even Dot Com companies look to running advertisements during the Super Bowl and prime time television as the most efficient medium to create brand awareness. Advertisers don't seem to be afraid that I'll miss their commercials, even with my wife's quick draw and my snack breaks.
Interactive television companies are promising enhancements to the television experience that could change the traditional advertising landscape, as we know it. In fact, the technologies these companies promise are already writing the epitaph for today's 30-second ad. Interactive television gives users many features, including the ability to choose from a limitless supply of goods and services, view content that interests them, and cut through the clutter in traditional television media. The most ad-defying capability they unleash is consumer control of programming; i.e., full-featured fast-forward, rewind, and pause.
Products entering the marketplace are empowering consumers to vote on what content they want to see and, more importantly, what they don't. Products like the Philips PersonalTV Receiver, using the TiVo service, allow you to record all of your favorite content and give you the ability to fast forward through the commercials. In fact, you can take breaks as long as you would like, the PersonalTV Receiver will continue to capture live programming while you're away. When you return to your TV, you can conveniently skip through the commercials and proceed with the show. You control the content.
Although the technology, termed the personal video recorder, is not in the average home, consumers are beginning to embrace it. Philips, Sony, and Replay TV offer recorders, and Scientific-Atlanta and General Instruments plan similar functionality on their set-top boxes in future revisions. According to Forrester research, these personal video recorders will reach 28 million households by 2005.
A service by ACTV called "Individualized Television" creates interactive and instantly customized television content and advertising in response to viewer remote control entries or stored demographic information. The service is appealing to advertisers, because it promises to let consumers pick their ads in an effort to appeal to a viewer's intellect. This will further target their ads. For example, Toyota can give users the option during a sports gam e to choose between a Camry, 4Runner, or Celica. If I choose 4Runner, the system will serve me that ad on the first commercial break and continue to aptly align similar Toyota advertising to me on subsequent breaks.
Broadcasters are always endeavoring to blur the line between programming and product placement. Many years ago, ad agencies and movie producers realized that consumers like product placements. The most memorable product placements on screen are Apple's Macintosh in "Mission Impossible," BMW's M3 in "James Bond, Tomorrow Never Dies," and Hershey's Reese's Pieces in "E.T." Products are viewed in a different light when used by a super hunk, dangerous spy, and cute alien. Television producers are taking notice. Bumper stickers for 1-800-COLLECT are stuck over pay phones, Coke vending machines are placed in recreation areas, and Seinfeld's fancy Klein bike sits unused on his apartment wall (in fact, Seinfeld humorously made reference to the placed bike in one of his episodes).
Wink Communications offers a "smarter way to watch television." The company has technology that enhances the viewing experience by allowing consumers to interact with television programming to reply to free offers, buy product, and make addition inquiries. For example, if the wine aficionados Dr. Frasier Crane and Niles Crane convince me that Stags' Leap produces one of the best wines of the year, a non-obtrusive link could give me the ability to purchase the particular bottle instantaneously.
It is arguable that consumers might have more interest in commercial advertising if they could choose ads that interest them, see characters use the product, or make impulse buys. There is undoubtedly much to be gained from effectively using interactive television to its fullest potential. Advertisers and broadcasters must work diligently to find relevance in commercial messages when consumers are given choices.
The invasive marketing that pervades today - i.e. the 30-second advertisement - will more than likely not fit with future television technology. Broadcasters and advertisers who are successful in embracing technology may find that consumers embrace their brands even more strongly.
Jason Brewster is the Executive Vice President of Melia Design Group (http://www.melia.com), an Atlanta-based company focused on brand identity development, interactive design, and video production. At Melia, Jason oversees the firm's interactive projects and operations. Jason was graduated from Austin College with a liberal arts degree, with a concentration in economics. Jason is currently the president of IICS. He will be a new dad by the end of March.
Founded in 1983, the IICS is dedicated to the advancement of interactive systems and the people who produce them. Its members come from a wide variety of multimedia-related fields and applications. More information on IICS can be found at iics.org.
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