Commentary

Interactive TV Not Likely To Brush Direct Mail Aside

It’s well-documented the U.S. Postal Service is navigating one tough route in this digital economy. Questions about the effectiveness of direct mail aren’t helping. Not that those haven’t been around, but marketers' interest in social media and other emerging tactics can't be a good sign about flyers filling mailboxes.

One of the shiny new things is interactive TV (iTV), which cable operators are more than happy to pitch as a direct mail substitute. Yet, data floating around this week suggests the direct mail industry and, by extension the post office, have a good while to keep making money on large postcards advertising large discounts.

On Wednesday, the postal service handed out its annual award for direct mail mastery. The winner was a one-person marketing firm, Sibley Smart Copy, for its campaign for a Florida regional salon business.

It was not a massive campaign – not Wal-Mart promoting a low-price guarantee in 50 markets. Sibley only sent out 923 pieces, but generated 43 responses for a response rate of 4.7%.

It’s only one case study. And an award winner at that. The National Mail Order Association says there’s simply no way to attach an average or ballpark figure for direct mail response rates. Hilton offering three free nights with the purchase of one might generate a 20% rate, while a local furniture store announcing opening night might have a miniscule number. So, calculating an overall average is a farce. 

Yet, figures on the efficiency of iTV ads served by Comcast, indicate a 4.7% result is very impressive. Heck, 1% might be considered phenomenal.

Comcast’s local sales arm, Spotlight, can serve iTV ads in 15 million households across 50 DMAs. It’s delivered billions of impressions and offers multiple advertising opportunities, including:

-Request-for-information (RFI) spots, where a viewer can use the remote to order a coupon or sample of an advertised product in the mail.

-Video-on-demand (VOD) telescoping, where a viewer can opt to switch over to a longer-form video about an advertised product.

-Remind Record, where a network can air a promo prompting viewers to set the DVR to record a show or opt to have a reminder pop up on screen shortly before it airs.

At the “Cable Interacts 2012: Crossroads for Innovation” event Thursday, Comcast data showed RFI spots have accounted for 908 million impressions. Average interaction rate: 0.08%.

VOD telescoping ads have accounted for 2.7 billion impressions. Average interaction rate: 0.19%.

Remind Record impressions: 295 million. Average interaction rate: 0.19%.

The highest interaction rate for a particular spot appears to be 0.65%. That was for an ad offering a free two-liter bottle of Crush soda.

(Seems like a key insight for advertisers developing iTV strategy might be that Americans love free sweet stuff.)

Even with the relatively low interaction rates, Comcast executives such as Michael Ortman -- vice president, content strategy & operations, who presented the data – are enthusiastic about the potential growth of iTV advertising.

It is early days. And one theory holds that when a banner pops up inviting a viewer to take action, it increases engagement with an ad even if the viewer takes a pass. Also, the campaigns offer sturdy measurement by one metric: click rates.

Offering some further detail, Ortman suggested if an iTV ad doesn't motivate someone at first, another exposure might. For a two-week campaign, he said Comcast sees much higher response rates in the second week.

At Time Warner Cable (TWC), the operator can serve iTV ads in 7.5 million homes in 30 markets. Chris Faw, a senior vice president in operations at the media arm, did not offer up response rate data.

He did say when TWC noticed customers couldn't find the OWN network, a promo prompting them to press a button to be switched over delivered good results.

Faw said TWC can call on its experience to advise clients on iTV creative, citing an example of a teachers’ union trying to build support, but overloading its banner with logos and other distractions. “A better message would say do you want better schools, press A,” he said.

Ultimately, operators may move deeper into t-commerce, allowing any advertiser to let viewers make an instant purchase with the remote. (Comcast, TWC and Verizon FiOS are among those facilitating HSN’s shop-by-remote feature.)

Verizon dipped a toe in its own t-commerce via a partnership with the History channel last year. A version of History’s online shop was accessible via clicker in FiOS homes. In December, an executive at History parent A&E Networks told the New York Times if 5% of visitors bought something, that would be a success.

Elizabeth Braiman – manager, distribution business development at A&E – didn’t offer specifics Thursday, but said the offering has been seven times more effective than History’s online shop.

Comcast, TWC and cable brethren ramping up iTV sales might find social media providing unintended help. Patrick Lafferty, COO of McCann Erickson's North American operations, said all that tweeting and chatting clients has clients pushing for more engagement and saying “we want interactivity with our brands.”

At least for a while, any discussion about iTV will have Canoe Ventures as a backdrop with its failure to build a national footprint for iTV ads.

So, is that a permanent no-go?

Not necessarily, said tech venture capitalist Gary Lauder. “I don’t think anyone thinks it’s going down, the question is when is it going to come up?”

Not anytime soon. Which should be one piece of good news for the postal service as it looks to hold on to as much direct mail business as it can.

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