Can Interactive TV Revive The 30-Second Spot?

Seeing more viewers skip TV commercials, advertisers are betting new interactive TV features will reconnect them with hard-to-reach consumers and, more importantly, determine whether their ads are working.Though only now coming to the U.S. market, interactive TV already reaches half of U.K. households, and has attracted advertisers from Peugeot to HSBC to Pizza Hut. Mercedes-Benz has experimented with iTV ads in the U.S., and Hewlett-Packard plans to test an iTV ad campaign on the U.K.'s Sky TV network in May that it expects will reach 7.5 million households. By the end of the year, HP wants to use the technology in the U.S., betting that iTV adoption will accelerate and give advertisers a new way to engage customers while proving advertising's effect on sales."Traditional advertising is wonderful, but usually what we can measure is awareness," said Siobhan O'Connor, vice president of consumer brand and marketing at HP. "What that doesn't tell me is did I make someone take the next step."The Palo Alto, Calif., computer manufacturer's lead ad agency, Omnicom's Goodby, Silverstein & Partners, is adapting its Francois Vogel-directed "HP + You" TV commercials for HP's digital photography and printing products. HP said the ads, still in production, would add a coupon offer to the spots that viewers can access from their remote controls. Viewers click through to an HP screen with demos of the company's camera and printer products, as well as short films. Later this year, consumers will be able to buy the products directly from their TVs.HP sees interactive ads as a way to make its advertising more measurable. "I can get a sense of what my customers are engaging with," O'Connor said. HP spent $164.8 million on TV advertising in 2004, according to Nielsen Monitor-Plus, owned by Adweek parent VNU.The U.S. iTV market is just getting off the ground. EchoStar Communications' Dish Network has rolled out iTV advertising capabilities and DirecTV is in the process of introducing them. Combined, the two satellite companies have audiences of nearly 25 million. "This is like the Web was 10 years ago," said Megan Reinhardt, the HP consumer products account manager at Goodby. "We're just starting to learn what we can do."The growing consumer adoption of TiVo-like personal video recorders will drive advertisers to try more engaging TV advertising, predicted Dalen Harrison, CEO of Ensequence, a Portland, Ore., maker of iTV software. Over 13 percent of U.S. households will have PVRs by the end of 2005, according to Jupiter Research. Harrison thinks this forecast will prove too low, and that penetration will pass 20 percent. Yet Jupiter Research analyst Todd Chanko said viewers are just as likely to ignore iTV ads. "If the [advertising] industry fears people want to skip commercials," he asked, "why is there a wing of the industry that thinks people want to spend time watching longer commercials?"Reinhardt said engaging content draws consumers to interact, pointing to an Adidas campaign in the U.K. that featured footage of soccer star David Beckham and rugby player Jonny Wilkinson. Harrison believes ad agencies and networks need to customize experiences and integrate them into programs. "When you enhance a show and add value to it," he said, "you're going to get a higher response."Maria Mandel, head of Digital Innovations at WPP Group's OgilvyInteractive, believes iTV will grow quickly in the next 18 months. "The TV channel, because of the reach TV has, is a very impactful channel," she said. "We have to find out what that next evolution is going to be."

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Can Interactive TV Revive The 30-Second Spot?

Brian Morrissey

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