Companies Partner on Targeted I-TV Advertising Trials

Technology company ACTV's Digital ADCO Inc. subsidiary recently made two key moves in the development of its SpotOn interactive television advertising system.

The deals bring in media agency StarCom Worldwide and I-TV solutions provider Random/Order to supply advertising clients and then guide them through the process of creating and implementing an I-TV commercial strategy.

The SpotOn system, currently in trials across the country, will deliver targeted interactive advertising that allows viewers to choose their own level of interaction — which may include receiving or viewing Web information or ordering products — as well as take part in selecting which commercials they would like to see right before they are shown. The system will be able to work with most or all I-TV platforms run through a digital set-top box, including ACTV's own I-TV entry, which is also in the testing phase.

“What we are doing here is controlling reach, frequency and sequencing,” said Kevin Liga, interim CEO of SpotOn, New York. “That's the whole game in advertising, and we are putting controls around it. We use a rule set, which is what the advertising is trying to accomplish and that is filtered against our profile application and information, which we receive from the customer and the cable operator.”

For example, if a female viewer watching sports allows the system to use all information available to it, the system would serve a female deodorant ad, then let the viewer choose between two ads — both from the same company.

The ads also are served based on the viewer's previous habits. This allows the system to further target the viewer by sending commercials in the appropriate language, and at a specific time or during a show on which the viewer previously responded to the commercials. Liga said this system potentially could erase millions in “wasted” advertising dollars that result from uninterested people switching channels.

The key for advertisers is not only the very specific targeting that can be done, but also the reporting that the company provides, which can pinpoint when a spot aired, which ad a viewer chose when given a choice, who responded to it, and further information that could lead an advertiser to find out why the viewer responded.

It was this targetability and feedback that led StarCom to present the system to several of its clients, who reacted enthusiastically to its possibilities, said Tim Hanlon, director of emerging contacts at StarCom Worldwide, a unit of BCom3's StarCom MediaVest Group, Chicago. StarCom will offer its clients — which include Hallmark, Delta Airlines, McDonald's and Kellogg — a chance to develop and place interactive ads through the SpotOn system.

“In many respects, it's a change of gigantic proportions,” Hanlon said. “It's every marketer's dream to cut out the waste in broadcast advertising and really target in on audiences that are relevant to what the product or service is about. The SpotOn system, so far, seems to be on track to cracking that nut. If it works — which we have every reason to believe it will — it is a tremendous breakthrough.

“There is obviously testing to come, and we want to be on the forefront of that testing. There are many advertiser and strategy directors at StarCom who are eager to test this premise out and see if it works.”

Assisting in the development, targeting and technological back end is Random/Order, Culver City, CA. The company will work with ACTV and the advertiser or network operator to understand how viewers react to the spots and how they are produced and delivered — acting as a kind of I-TV technology/marketing manager for the spots.

Random/Order also brings to the deal its iTVLab, which acts as a testing facility working toward understanding and adopting uniform standards for the emerging medium. The lab is a partnership with most major I-TV companies such as OpenTV, Liberate, Wink and WorldGate, ranging from those that make the applications that people see, to those that make the program that application runs off.

“Everybody is talking BTC or BTB; we consider these relationships as one in which we approach it as [business-to-viewer],” said Stuart Gross, CEO of Random/Order. “We have to convince people to become a consumer. We don't have to convince them to become a viewer. It's a different thought process, they weren't looking for anything — we have to do that job. But, we are at an advantage with this system because when you have targeted advertising that people can have a say in, they are just so much less likely to leave a program.”

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