A brief by BrightLine Partners of New York says that interactive TV commercials will be available in more than 10 million U.S. households by the beginning of 2004. That's a dramatic increase in the past several years, thanks to gains in the marketplace made by companies like Dish Network and Wink. The study predicts that even more interactive-commercial capable homes will go online with the fierce competition between cable and satellite operators. That's good news for advertisers, said Robert Aksman, operations director and analyst at BrightLine Partners.
"It helps to fend off technology like DVRs from ruining the ad model," Aksman said.
Aksman said there's been a reluctance on the part of many advertisers to jump into interactive commercials because there were few television households that had the technology capable of receiving them. He said that because of that, interactive TV commercials and other advanced television services have yet to become a staple for most brands.
But within 18 months, Aksman predicts, there will be many more advertisers operating in the space. Why? Because the household numbers will grow so much that they can't be ignored. He said that the advertisers who are getting into interactive commercials now are going to come out better than the ones who are on the sidelines waiting for things to shake out.
"The advertisers who are working with it are certainly going to have an edge. They're going to know what works and what doesn't work ... The wait-and-see approach is just not going to work anymore," Aksman said. These nascent campaigns will give way to more comprehensive commercials in the future that will build on that knowledge, the study said.
The study said that the companies that employ interactive commercials will reap the benefits while the ones who haven't reached that level will struggle and be deprived of a powerful marketing tool.
Aksman said that advertisers are already using interactive commercials to distribute coupons, samples and product information. The mechanisms are also there for direct purchases via remote control. And all of this is available, Aksman said, for a slight incremental cost beyond the traditional commercial. Paired with so-called virtual channels, the viewers' interactive TV experience can get even richer and the advertiser has even more chances to build their brand interactively.
Aksman said that so far, the most successful interactive TV advertisers use interactivity but don't ask the viewer to do much. It's more like accessing information on the fly and answering one or two simple questions like "Are you interested in Product X?" and "Do you want a catalog?" He said the most effective advertising won't change viewers' long-established habits but instead work within those parameters.
"It's got to be quick and get out ... Interactivity shouldn't be about making viewers lean forward but about letting them lean farther back," Aksman said. He said that interactive TV isn't trying to replace the computer or Web pages.