• by Cory Treffiletti , Featured Contributor, October 12, 2005

The definition of interactive marketing is changing rapidly, with implications for not only the types of media being recommended and who is responsible for managing and delivering the recommendations--but also on the ad models that will be integrated into the media.

It used to be that when there was a line item on a media recommendation for interactive, the line item referred to online opportunities. That is no longer the case. The lines are blurring between what has traditionally been called interactive and what is sometimes referred to as digital. For example, where should the line item for digital television be placed?

There have been a number of articles in the last two weeks that suggest the major networks are finally starting to take video on demand (VOD) seriously, and it's certainly about time. Networks are finally starting to negotiate the digital rights that would allow their prime-time lineups to be viewed when the user wants to see them through the cable operator. HBO and other paid stations have already taken advantage of VOD, but the results are not public and I can't comment on the adoption of the format (plus there have been no advertisements integrated into paid stations' use of VOD). That being said, my own personal stance has been overwhelmingly positive; everyone I know has watched "Entourage" on VOD, so I assume the rest of America will do so as well.

The network charge appears to be led by CBS, who is very interested in getting its prime-time content on VOD. I think this makes sense, but remember, this comes from someone who is completely addicted to "CSI." The main questions that arise are, how VOD viewership will be weighted against traditional TV ratings, how advertising will be incorporated into the format, and how advertisers will be charged.

The viewership question is very interesting to me, as it could expose something about TV that we've always suspected but had been unable to prove: just because a TV is on doesn't mean someone is watching. VOD would be the closest to true audience viewership, and would be more in line with online measurement. Advertisers could potentially be charged a premium for advertising that is delivered during a VOD program, since the audience is guaranteed to be paying attention.

As for the inevitable question of how advertising could be integrated into the format, I think they should take the commercial format and adjust it to be more in line with the theatre format, with a digital pre-roll that cannot be skipped, much like when you load a DVD and the trailers cannot be skipped. I'm sure the technology exists to make the ads a must-watch, and for viewers, this would be a small price to pay for watching the shows they want to watch completely uninterrupted.

As for how advertisers will be charged, I definitely feel the networks will attempt to charge a premium for this inventory. It represents a self-selected audience, it represents a highly targetable audience (since you can target the ads to the household rather than the ratings), plus it represents the future of TV advertising. It's feasible that the entire viewing experience will be On Demand in the next few years; the networks would be silly to undervalue this opportunity at the outset.

Of course, that's where the agencies come in; we serve to negotiate and manage these new opportunities on behalf of our clients.

Which brings me back to my original question of who is going to be responsible for this line item in the media recommendations? Is it the Interactive groups, the Broadcast Buying groups, or a Digital Group that rests in between? The answer to that question depends on your individual organization, but be sure you take a look around and work it out quickly. VOD is coming faster than you know.