Enhanced TV vs Traditional Advertisers

Key points:

  • “Advanced television functionality has been around for years, but it has always been fragmented and inconsistent,” said Michael Bologna, director-emerging communications at WPP’s Group M. “That has been a problem for advertisers. Advertisers want to reach mass audiences.”
  • Marketers are approaching the new technology gingerly. They are leery of the added production costs that could arise from having to produce extra pieces of promotional content for new technologies. They are resigned to the fact that, in many cases, they may have to craft individual commercials for specific venues. And then there’s the biggest question: Will consumers react to their newfangled ads?
  • “We have an enormous customer base, and we need to drive pretty big consumer volumes on a weekly basis,” said Tony Pace, chief marketing officer of the Subway Franchisee Advertising Fund Trust. “A fair amount of people who consume television are very into their show, but they don’t want to be doing anything else. So are they really going to be excited about responding to an interactive ad? There’s a small group that’s very eager, and the question is, how valuable are they to your brand or business? That’s what we’re trying to get a sense of now.”
  • Like other futuristic ad counterparts, the technology has been difficult to implement in broad-scale fashion, particularly because the competing cable and satellite companies use different kinds of equipment.
  • Despite the hoopla accorded web-enabled TV sets, consumers’ ultimate reaction to them is yet to be determined. “Very few people want to engage in online chat, follow friends on Twitter or vote for their favorite TV-show contestants through the TV,” Forrester found in an August report, noting that some owners of the newfangled TV sets didn’t use the web connections very often. Those that did used the TV set primarily to watch offerings from Netflix and YouTube.
  • Forrester predicts only one-third of U.S. homes will have a web-connected TV by 2015. New services and gadgets often cost new dollars that the recession-battered consumer lacks.
  • One researcher suggests advertisers will face a split public: a leading edge that adopts the new technology and a broader base that won’t see much initial use for it. “Just because we can do it doesn’t mean the consumer wants it,” said Alan Wurtzel, president-research and media development, at NBC Universal. “There are probably some consumers who would be very interested, but I just don’t know how big it will be and how you scale it up.”
  • Until that question is answered, look for marketers to build their own advertising experiments, testing them with one media outlet, then another, in an effort to build reach for their campaigns. Toymaker Mattel, for instance, has created an interactive digital-cable “channel” for its popular Barbie doll. To do so, it crafted deals first with Cablevision Systems Corp., then EchoStar’s satellite-based Dish Network and, most recently, AT&T’s U-Verse. “The idea, yes, is to continue to extend it, but we can only extend it as fast as technology allows,” said Jeanne Hanahan, senior director-corporate media at Mattel. “Not every system or carrier has the platform that would be able to host what we want the channel to be.”

My takes: It’s indeed interesting to look beyond Early Adopters. It helps anticipating this upcoming fragmented market where attention, engagement, data and money will be used as currency by different segments to access different contents/services/experiences. But it is also important to keep in mind that, in this new Information Era, quality over-rules quantity and volume/low-margin is replaced by engagement/high-value.

Another interesting take is the fact (that i highlighted right before the launch of the iPad towards several partners of mine) that TV will not be a preferred interactive channel by most people. Devices like tablets and smartphones will be preferred because they are personal, they’re already connected (and using an already activated ecosystem from content to check-out) and people already know how to use them (mix of evangelization, learning curve, optimized user XP…). This topic will be increasingly hot with trends such as TV show check-in, low adoption of TV technology enhancements, peer-to-peer mass adoption for video content…

Link: http://adage.com/mediaworks/article?article_id=146671

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