Interactive TV Gaining in Advertising Circles

Cable World, Oct 6, 2003

Byline: ANDREA FIGLER

Advertisers - the financial rock of television - are slowly but surely warming up to interactive television, spending more on a technology that has long stagnated on TV's periphery.

"That whole category is growing," says Denise Garcia, a principal analyst for GartnerG2's interactive advertising survey. "It's almost going to be 10% of [media planners'] budgets by the end of 2004. That's a lot for a category that just barely existed six years ago."

While the 10% growth is for interactive advertising as a whole, Gartner's most recent survey of 212 media agencies found that media planners will recommend spending 11.5% of a company's ad budget on interactive television or enhanced television next year, up from 9.6% this year.

This increased spending should bolster cable networks that are pushing interactivity.

The Game Show Network, for instance, already boasts 50 interactive advertisers this year, up from 30 last year when it first began its interactive campaign. Advertisers must plop down at least six figures to get the network's "value-added" enhanced commercials, according to Game Show Network. That's at least $5 million in ad revenue that the network has pocketed with the help of ITV. These ITV applications, created by GoldPocket Interactive, keep viewers watching commercials and record valuable data via a sync-to-broadcast format.

For example, the network runs sweepstakes in which points are awarded to viewers who play along on their computers. If a Saturn commercial airs during a program, the network will run a question following the commercial asking what color the car was, says John Roberts, the network's SVP of interactive and online entertainment. If the viewer answers correctly, he or she receives extra points.

Advertisers also get data about how many people interacted with the commercial. GoldPocket tallies a list of exactly how consumers responded, sending this data to the advertiser within weeks. The Game Show Network also uses Wink, a division of OpenTV, which offers a one-screen enhanced television application that produces similar results.

Brent Hardesty, an account director for Carat U.S.A., which buys advertising for Orbitz, says this data has been so beneficial to the online travel company that he will continue to advertise on the network. Orbitz ran its first ad about eight months ago.

CNN also reports an increase in interactive advertisers using the Wink format. From January to September this year, the amount of interactive advertisers rose 50% compared with the same period last year, says Scott Bender, sales manager for CNN Interactive. Bender expects that number to grow once the network incorporates a sync-to-broadcast platform next year.

Advertisers like enhanced television because it benefits the traditional 30-second spot, says Andrew Green, OMD's director of communications insights. As research director for one of the world's largest media buyers, Green released an internal report last month on the new technologies affecting television advertising. The report warns of how these technologies, such as digital video recorders like TiVo, threaten traditional commercials. With enhanced television, on the other hand, advertisers can benefit from viewers' immediate responses to commercials. "Return on investment is directly measurable," Green notes.

Roberts from the Game Show Network puts it a little bit more colloquially: "It's been welcome basically because of the TiVo-proof part of this."

THE NEXT QUESTION:

*Will networks ever be able to offer advertisers traditional measurement tools, such as cost per thousand, for enhanced television?