Momentum Builds For Interactive TV

Guest Commentary From LOUIS CHUNOVIC, Electronic Media

When it came to turning "Smallville" into a hit, interactive TV advertising provided the "critical component."

That was the surprising claim by Russ Booth, director of developing technology, MediaCom, The WB's agency of record.

MediaCom's "Smallville" mission was to "drive tune-in" for each weekly episode, Mr. Booth said. "The approach that we used was to dominate day-of share of voice, to make people aware of the program opportunity that night and to drive them to that opportunity," he said.

The ITV part of that mission involved Gemstar-TV Guide's interactive program guide. "It was not the ad-panel approach, but we used the flip-browse approach, which is the little bar that, when you change the channel, comes up and gives you information," Mr. Booth said. "We saturated the Gemstar-TV Guide application an hour before ['Smallville'] the program that we were testing."

That flip-browse panel at the bottom of the IPG has space for a small ad so that a viewer who clicks on "Frasier," for example, might be informed that "Roswell" is playing at the same time.

Asked if he could truly attribute the "Smallville" success to the IPG ploy, Mr. Booth said the expense for the Gemstar-TVG platform's flip-browse bar was "the variable that was unique, and everything else was cut back."

"It's an effective and low-cost device," said a WB spokesman, who also noted that IPG buys have now been made for "numerous" other WB shows. Gemstar-TVG sells the IPG flip-browse ads on a cost-per-thousand basis, and a Gemstar-TVG spokeswoman confirmed that The WB was the first television network to use the IPG's flip-browse this way.

Clicking on ads

Mr. Booth was one of three panelists offering insights into the current status and future prospects of digital television advertising at a seminar called "ITV Expectations/ROI Realities: A Critical Look at How ITV Can Drive Your Business' Return on Investments." The seminar was held in Manhattan last week under the auspices of Filter Media, a New York-based strategic consulting agency for the digital media market.

Panelist Timothy Hanlon, VP/director, emerging contacts, Starcom MediaVest Group, outlined on-air tests of competing ITV technology-platform providers Wink Communications and RespondTV, that he conducted for his client, Walt Disney World.

Starcom bought separate flights of 30-second ITV ads on Wink Communications-enabled and RespondTV-enabled networks. The ads invited viewers to click and receive a free Walt Disney World vacation-planning video. "Wink rose to the top for a number of reasons," Mr. Hanlon said. "It's in 5 million homes [and has] partnerships with a lot of major cable and a few broadcast networks that seemed to overlap fairly well with the media schedule."

Wink's downside was that at the time of the ad buys it didn't have a relationship with certain networks, such as ABC, that Walt Disney World wanted to be on. It also doesn't have the capability to target by designated market area, to reach the cold-winter cities on which Walt Disney World wanted to focus or to "capture" e-mail addresses, Mr. Hanlon said. As a lead generator for Walt Disney World it was, however, "one of the most [cost] efficient."

Targeting stations

RespondTV's upside included a different set of networks and the ability to target certain individual-market broadcast stations. Because Respond is only available in the approximately 600,000 WebTV homes, its major downside is a "lack of addressable carriage deals," Mr. Hanlon said. Therefore, its response rates in the Walt Disney World test were significantly smaller than Wink's.

"Because there is no addressability there, one has to enter in name, address ... ZIP code, all that stuff," Mr. Hanlon said. Those capabilities are "automatically baked in" in the Wink scenario, he said. However, the RespondTV creative capabilities are superior, and the platform does support local targeting, Mr. Hanlon said.

Other Starcom clients that have been "believers" in some form of ITV include Nintendo, Showtime, Allstate, Morgan Stanley, Miller Brewing and General Motors, Mr. Hanlon said.

Changing minds

Better reach, more networks and increased creative capabilities are among the next necessary steps for ITV's technology providers, Mr. Hanlon said. The logical ITV step is to eliminate the cost of manufacturing both the box and the cassette itself and then to transmit the pure video via video-on-demand or through TiVo and other personal video recorders, Mr. Hanlon said. "That's where a lot of advertisers ... are interested in playing," he said.

Part of the difficulty in advancing ITV advertising prospects arises from the nature of the cable industry. "[Multiple system operators] are exclusive geographic franchises," Mr. Booth said. For example, Cablevision's ITV systems may not be compatible with Comcast's. Even after Comcast completes its acquisition of AT&T Broadband, "If you represent a national advertiser, that's only 20 or 30 percent of the country," he said.

Panelist Keith Wichowski, director, enhanced broadcast technologies, ShopNBC, said that the interactive home-shopping network has done "about a couple million dollars in [ITV] transactions" since it rebranded and relaunched last June. That amount exceeds initial expectations, Mr. Wichowski said.

ITV's proponents aspire to a 20 percent share of the advertising market by 2005, Mr. Booth said. But there are obstacles aplenty before that dream can be realized, he cautioned. The pitfalls include multiple standards, a lag in technology deployment and consumer acceptance of and adaptation to the technology.

One element that is driving advertisers' interest in ITV is their own experience. "Sometimes it's just a benign event, such as the marketing executive getting TiVo ... that gets the conversation going," Mr. Hanlon said.#