To many advertisers in the United States, interactive television is perceived as a concept, something futuristic. Contrary to this belief, I-TV is a reality today and wildly active in households worldwide. The way in which we interact with this technology is revolutionizing how we purchase merchandise, get our news and communicate with one another.
Through I-TV, watching television has morphed from a passive to an active, often emotional experience – one that bodes well for the future of television advertising and direct marketing.
I-TV creates limitless opportunities for advertisers and direct marketers, and an entirely new experience for consumers. The traditional definitions of what it means to advertise and to consume have evolved dramatically. I-TV can immediately fulfill perceived needs based upon an individual’s inherent impulsive nature and can empower the advertising community to capitalize on it.
What does this evolution mean for advertisers and ultimately television viewers? Control and relevance. I-TV gives advertisers and direct marketers the ability to control the delivery of targeted, household-specific messages to consumers.
The value of this partnership lands in the laps of advertisers and direct marketers: The advertiser gains control through the ability to easily identify and process viewer input, thereby ensuring the fulfillment of information, goods and services ordered through the set-top box.
I-TV also gives television viewers control. Now they can choose which commercials they would like to see, resulting in heightened emotion and gratification. Viewers can immediately access and secure information that they want, without picking up the phone, responding to a piece of direct mail or traveling to a retail store to investigate further.
I-TV also radically increases the relevance of advertising messages because the information is tailored to address the specific profiles and demographics of the viewer. Because I-TV advertising is ultimately about personalization of the television experience, advertisers now have the power to turn viewing a TV ad into a personal, emotional and active experience. Audiences benefit because they receive relevant information about products based upon their individual preferences.
Control and relevance have had a tremendous impact on advertising response rates. Recent results in the United Kingdom show that I-TV advertising has been averaging a 5 percent to 10 percent response rate vs. traditional TV advertising and direct marketing, which typically draw a 1.5 percent response rate. Industry research has projected that within the next several years, 75 percent of all TV advertising will be interactive.
Therefore, advertisers have tough challenges ahead in achieving effective advertising messages targeted to I-TV viewers.
Infomercials and direct marketing in the United Kingdom also have been en-hanced through the use of I-TV. Instead of using the phone to order the goods or products showcased, consumers simply use their remote control by responding to an overlay on their TV screen, which allows them to order directly with a simple touch of a button. Currently, 3.4 million homes in the United Kingdom use this technology, and the number is growing daily because of the ease of use and convenience that consumers experience through their televisions.
It is critical that advertisers and direct marketers look to the success of interactive marketers in the United Kingdom for a better understanding of what to expect in the United States in the near future. Their success can be attributed to various forms of I-TV via the application of virtual channels, overlays on broadcast, and advertising sponsorships coupled with I-TV advertising and direct marketing.
I-TV marketers in the United Kingdom also have been successful in enhancing both the TV viewer’s aptitude for direct response television, as well as the impulse buys by delivering both emotion and convenience.
So what’s the best medium for I-TV advertising, cable or satellite? Each delivery vehicle has its benefits and drawbacks. Today, direct broadcast satellite simplifies the back-end requirement for advertisers. However, in the long term, cable has the potential to enjoy a dominant position in reaching TV viewers – 67 million U.S. cable households, compared with 14 million U.S. homes with satellites.
Regardless, both cable and satellite have a tremendous opportunity to reap significant strategic and financial benefits by immediately launching I-TV applications for television.
As witnessed by the bewildering growth of the Internet, those advertisers and direct marketers that enter the I-TV advertising marketplace early will have a significant advantage, regardless of what TV delivery medium they choose.
By planning ahead, the enterprising advertiser will be rewarded and, most importantly, achieve dramatic results in increased sales, identifying TV viewer preferences and, best of all, fostering viewer loyalty and retention.
The fundamental rules of the I-TV advertising game have not been fully established. However, they continue to evolve daily. These new rules will determine the future of I-TV advertising – in particular, those that will lead and those that will follow.
Now is the time for advertisers to take the leadership position, engage their TV-viewing audience and seize an opportunity to enjoy immediate, new revenues. As Benjamin Franklin once said, “There’s no use going back for a lost opportunity. Someone else has found it.”