• by December 1, 2000

‘Personal TV services’ such as TiVo, Wink, and WebTV are gaining ground. How will you reach an audience that no longer has to watch ads?

Interactive TV is basically video-based programming that combines regular shows with an interactive component like graphics on video, the ability to record programming in real time for later review, or—and here’s where your ears should perk up—creating interactive ads, known as “enhancements,” so viewers can order products and services during their TV watching experience. Phillips, Sony, and others manufacture the “black boxes,” or DVRs (Digital Video Recorders) as they’re called, that carry the subscription-based services through cable and satellite operators. Analysts have predicted that TiVo and Replay (which just ceased making its own boxes) will have access to between 5 and 7 million American homes by the end of 2002, and nearly 12 times that number by 2010. TiVo and Replay themselves have stated that 100,000 homes currently have their technology. Other sources indicate that the number, combined, may be closer to 70,000 units in the U.S.

So whom do you call if your client wants an “enhancement”?

The response from interactive TV advertising providers is that, as with cross-media buying, the process has not entirely galvanized yet. Some of the enhancement companies contacted for this article suggested that media buyers call them directly to arrange a campaign, while others said a buyer should call the network on which they want their enhanced spot to run to start the ball rolling.

What platforms support enhanced ads, and how many people can see them?

Statistics show that there are 100 million TV households in the United States. Out of this total, there are about 25 million cable homes that have set-top boxes, which could be powered by TiVo, ReplayTV, a Liberate-enabled box, Microsoft TV’s Ultimate TV platform, WebTV, and the new AOLTV. All of them, theoretically, can employ the leading ad enhancement technologies from Wink and RespondTV. Additionally, 15 million satellite homes have boxes, though not all of the boxes have enough memory and graphics to provide interactivity. Wink is currently available in 1.5 million homes, and could be deployed into 15 million homes within the next five years, since there are currently 15 million households set to receive the service via their cable or satellite operator should they purchase a set-top box. “When DIRECTV launched earlier this year, they turned on a million homes,” says Wink. “They have committed to turning on another 5 million by the end of next year.” Having deals with Ecostar, Charter, Adelphia, and DIRECTV—four of the largest eight satellite networks in the U.S.—and Time Warner, AT&T, and Cox Cable networks seems to ensure that enhanced ads will reach many of your clients’ targeted viewers in good time.

How does a commercial change if it is “enhanced”?

To the viewer subscribed to an interactive TV service like Wink, commercials and programming both appear exactly as they would when watching “normal” television. In Wink’s case, an icon will flash, usually on the upper-right-hand corner of the screen. This tells the viewer that the commercial is “enhanced.” The graphic itself may be transparent or nontransparent depending on the provider, and with browser-based services like WebTV, may include email or other text fields used to capture data. Using the arrow keys on their remote control, for which directions are given on screen, the viewer can then choose to select the item—say, a coupon for $2 off of Clorox. The order for the coupon is then completed on the backend by Wink, and a coupon will arrive within days at the home of the viewer. Often, says Wink, the viewer does not even have to enter any personal information like name and address, because Wink has already captured this data through its relationship with the cable or satellite operator.

How is success measured for interactive TV ads, and will I save my client money?

Enhanced ads have a long way to go towards becoming mainstream, but a little extra money spent now will cost advertisers less in the end. “There’s today and what’s coming,” says Respond. “The numbers of homes that can interact with this today can’t really justify this in an economic sense. The value is in rethinking an overall media buy. The money spent on direct marketing could be better spent: there is an incremental cost to advertisers on interactive TV buys, but on the direct marketing side it is more cost effective.”

The advertisers experimenting with enhancements don’t seem to mind: Respond did a campaign for Ralston Purina Puppy Chow last summer, which they ran on 22 different TV networks. While viewers watched the ad, an icon popped up saying, “Do you want to receive a free Incredible Puppy Care Kit?” Mike Moore, Ralston Purina’s Group Director of New Ventures, was intrigued by what enhancement technology could do to advance Puppy Chow’s visibility, and said that he “look[ed] forward to using the enhancements to further extend the Puppy Chow brand into the homes of pet owners.” So did the campaign succeed? Responses to the interactive spot, says Respond, were received from 37 out of 50 states the day it ran. The campaign’s run was completed on the 30th of June, and on the first of July, still more affirmative responses were received, which means that whether users responded immediately or when watching the ad on tape (using a device like TiVo), the ad was a success.