• by Paul Gough , April 5, 2004

Early adopters are going to get the biggest boost with interactive television campaigns, says a new report from a New York-based consultancy.

BrightLine Partners says in its quarterly report on the state of the industry that there are several challenges to interactive television advertising: Limited reach, no standard business model, and little standard measures and pricing. It's also difficult to evaluate the strengths and weaknesses of the options within interactive TV advertising, be it video on demand, interactive commercials, virtual channels, or elsewhere. There's also no one interactive television platform that can reach a national audience.

That last point isn't the sore spot that it seems to be at first glance, as planners and buyers are finding opportunities to lower the costs of the campaign and increase the bang for the buck.

"The current environment offers marketers a broad range of potential options and differential pricing opportunities that can be molded to their iTV ad objectives," says the report, written by BrightLine's Jacqueline Corbelli and Robert Aksman. "It is not rare, for example, to see production services such as creative development, editing, and encoding provided as part of the iTV media buy at no additional cost."

For instance, campaigns can be customized on individual or on multiple platforms.

"Advertisers are inspired to think more broadly about the objectives of an iTV campaign rather than build or adapt to one specific platform," the study says. The savvy planners are doing campaigns on multiple platforms such as TiVo, Cox's FreeZone in San Diego, and Marketplace in Comcast.

"Over the next 12-18 months, those marketers most actively participating in the interactive television ad market will provide critical input to establishing the ultimate rules of the game for iTV advertising and television advertising," the study says.

BrightLine Partners predicts that by the end of this year, there will be 7 million digital video recorder customers. By the end of 2004, there will be 48 million digital cable or satellite customers, with more than 13 million having access to video on demand.