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Making the case for interactive TV

Feb 26, 2001  •  Post A Comment

Interactive TV is a new ballgame in which no one is certain how to keep score.
Interactive TV provider Wink Communications has been boasting about the response to its interactive ads. The numbers Wink cites are impressively high and come at a time when response to advertising is increasingly an issue with customers. So the question arises: Is it real, or is it mendacity?
Wink says its advertising partners’ campaigns have yielded the following results:
Automotive-34 percent of viewers who saw the offer requested a brochure.
Financial-50 percent of viewers who saw the offer requested a new account kit.
Pharmaceutical-49 percent of viewers who saw the offer requested product information.
On the surface, these numbers are enough to make direct-response advertisers salivate, but Wink isn’t willing to attach customer names or much in the way of further explanation to them.
Kevin Smith, senior vice president for advertising sales research and targeting at Wink, said: “Anyone who sees these numbers will challenge them. We have taken a conservative position based on how much information we can release. We’re in a base of 2.5 million homes. When you have thousands of interactions, you build a pretty solid database of information that has a high level of reliability. What we’re hoping to do is harvest all this information into intelligence that all of our partners can use and benefit from in their media planning.”
Certainly there is a big appetite for this kind of information, which is hard to find. Media strategists, with billions of advertising dollars at stake, are particularly eager for reliable data tracking PC/TV relationships.
Nielsen Media Research and Nielsen//NetRatings last month announced the launch of its first “Convergence Lab,” a consumer research laboratory to electronically measure television viewing and Internet activity as they occur in the same sample households. The first data from the panel will be reported to customers in March. While this isn’t exactly what Wink offers, it is similar.
Jack Loftus, senior vice president at Nielsen Media Research, said Procter & Gamble was the driving force behind the decision to launch this project. P&G spends a lot of money on television advertising and is “very interested in discovering if their television ads lead people to access their Web site and what those people do once they get there,” he said.
Debra McMahon, a vice president at Mercer Management Consulting and a market strategist, has been trying to figure out what kind of direct response advertising works best on interactive television. She said lots of existing information about interactive TV response rates isn’t very useful because it doesn’t record whether the ad created a good impression, even if the viewer didn’t click through.
“The fact that I didn’t click through doesn’t mean that I didn’t like the ad or derive some meaningful information from it,” she said.
Ms. McMahon said a 30 percent or 40 percent response rate to an ad is within the realm of possibility if the ad is particularly well targeted and the audience is highly motivated to respond-for instance, if the ad is a giveaway of something attractive.
Ms. McMahon points to SkyTV, the walled-garden, satellite-based interactive system that has about 4 million users in Great Britain, as an example of a system that is similar to Wink and which has documented some of its advertising response rates. She said about 11 percent of Sky’s total audience has at some point responded to an ad and actually bought a product.
Last fall, Sky and Domino’s Pizza experimented with selling pizzas through the interactive system. It was a first for both companies. Viewers could order pizza by clicking with their remote on an interactive button in the ad that took them to the Domino’s Pizza site on Open, Sky Digital’s interactive shopping platform.
Open Sales Director Nick Bryant was unavailable for comment for this story, but he has said previously that the Domino’s campaign lifted sales on its interactive site by 25 percent but achieved only a 2 percent to 3 percent response rate on the Sky platform.
No matter what the numbers are, it’s clear that broadcasters and advertisers are looking at the potential for big opportunities in interactive advertising. David Tice, director of client services for Statistical Research Inc. in Westfield, N.J., said the way viewers will react to interactive ads is still an unknown. “Advertisers were concerned that people would skip the commercials completely when they got TiVo, but what actually happens is that they watch some and skip others,” he said. “And if you give them the opportunity, they’ll even request the kind of ads they want. If they want to buy a car, they’ll say, `Send me commercials on that.’ I think television advertising could be a completely different business in five years.”