hollywoodreporter.com
March 31, 2004
Murdoch, digital gains driving upswing in iTV
By Paul Bond
Two weeks ago in this space, analysts outlined a bullish scenario for online advertising, except for the pop-up variety. This week, some companies that are dependent on interactive TV advertising presented an equally rosy scenario for their industry -- and credit Rupert Murdoch for an uptick in business.
GoldPocket Interactive, producer of much of the iTV programming in the United States, says that it worked with 80 different advertisers who went interactive in 2003, more than twice the number it worked with the previous year. Advertisers spent three times more on interactivity last year compared with 2002, GoldPocket CEO Scott Newnam says.
"This year will be the year," Newnam says. "Cable operators are scared of Rupert Murdoch."
That, of course, is because Murdoch intends to push iTV to Americans until they have embraced it at least as much as European TV viewers have.
"Rupert Murdoch doesn't do things halfway," echoes Jacqueline Corbelli, CEO of Brightline Partners, which bills itself as the only media planner and buyer solely dedicated to the iTV space.
Corbelli says she has seen a huge rise in iTV ad interest in the past nine months. "It's all a matter of having a Rupert Murdoch controlling DirecTV. It has put a bit of a scare in operators."
Corbelli, whose firm works with 12 ad agencies representing 60 advertisers, says she expects all of the top 500 advertisers to have embraced iTV by the end of 2005.
One campaign Brightline is working on for an automobile company consists of 10 ads rolling out over 16 weeks that, when run together, make a short film, with a beginning, middle and end. The ads will run on TV and in movie theaters. There's a Web site as well as interactive cell-phone gimmicks that Corbelli declined to describe.
"There were so many naysayers 12 months ago who said iTV was dead," Corbelli says. "It's taking off again."
Beyond Murdoch being in their corner (whether or not he's aware of it), Brightline cites the suddenly rapid adoption of digital TV as helping their cause. By year's end, 48 million U.S. households will be hooked in to digital cable or satellite TV services, Corbelli says.
GoldPocket's Newnam says that advertisers on average pay 10% more for interactivity than they would for traditional ads. "It's an extreme premium now because only 5% of viewers go interactive. So advertisers are paying twice as much for an interactive viewer as they do for a noninteractive viewer," he says.
But, Newnam says, the big premium makes sense when you consider that the 5% figure represents a 250% increase from a year ago. Plus, interactive advertising takes the guesswork out of determining a commercial's effectiveness. Advertisers know exactly how many people, for example, download a coupon offered or interact with a commercial in some other way.
And, as Newnam and others in iTV often note, iTV viewers tend to stick with a program twice as long as non-iTV viewers, and of those iTV viewers, 85% will partake in the interactive commercials as opposed to fast-forwarding them TiVo-style or simply walking out of the room.
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