Advertiser involvement in new media platforms is coming in fits and starts, but it’s on a trajectory to become widespread in the next several years.

That was the theme of an interactive workshop that media agency Carat hosted last week in its New York offices involving Carat executives, advertising clients, cable programmers, new media research firms and television technologists who are developing applications for the next generation of interactive television.

Commercials in new applications such as video-on-demand, interactive TV and addressable advertising are part of the new wave of ad forms that many advertisers are just beginning to dabble in as TV shuffles closer to a time-shifted, viewer-controlled world.

Forrester Research predicts that in five years, 40 percent of television viewing will be nonlinear.

While new media spending is still a drop in the shot glass compared with the big keg of TV ad money, pockets of ad-supported interactivity are cropping up as cable operators roll out new technology. As the rollouts continue, Carat wants to serve as a matchmaker and bring together participants into its ITV think tank, the Exchange, every few months so the technology companies get the ad models right-that is, with advertiser input from the beginning.

“It is in all of our vested interests that these new TV environments have the advertising point of view in mind and the consumers and not be driven purely by technology and the technologists,” Carat Americas CEO David Verklin, who created the Exchange, said.

At the company’s March 1 meeting in midtown New York, TelevisionWeek got a behind-the-scenes look at how the ideas are hatched. The meeting occurred just before upfronts get rolling. Several cable programmers plan to include some VOD in their upfront offers this year.

Carat has been working across its divisions, from broadcast to online to new media, on how to allocate advertiser dollars across new platforms. The agency has met with programmers such as Discovery, ESPN and Turner Broadcasting to discuss how to build VOD into larger network buys.

At the meeting, led by Carat Digital Executive VP Mitch Oscar, two high-profile technology players presented their visions for advertising in the future: ITV firm GoldPocket Interactive and Tandberg Television, which offers VOD software through its recent acquisition of N2 Broadband.

GoldPocket’s business is based on enabling interactivity in TV programming itself-either through two-screen applications, in which a user interacts with a TV show using a computer, or one-screen capability, in which interaction takes place through the remote control. Both are ad-supported.

GoldPocket has some impressive numbers to back up its proposition. On average, a person watches only 20 minutes of an hour-long program and views the ads 40 percent of the time, said Joe Franzetta, senior VP of business development at GoldPocket, citing statistics from Forrester Research. Based on GoldPocket participant data, consumers watched interactive programs twice as long and engaged with interactive ads 85 percent of the time.

As an example, an interactive ad could be a Pringles sponsorship of CBS’s “Survivor” in which viewers are asked, “If you could bring one can of Pringles to the island, what would it be?” or, “When did Pringles first hit store shelves?” Mr. Franzetta said during his discussions of what future ad models could look like. Interactivity could even loop viewers back in to content from the previous week, thus encouraging them to continue to tune in.

“What we are talking about is a two-way relationship with a consumer that we have never had before,” said Duncan Campbell, VP of business development and client partnerships at GoldPocket.

Some advertisers want more widespread deployment before they sign up. “I think you need some scale,” Robert Rose said during the meeting. He’s the director of marketing and media at Seiter & Miller Advertising, which uses Carat for its media buying. “I think we’d be less interested in testing and more interested in approaching this from a [direct response] model and saying we are more interested in seeing this on a [big scale],” he said.

He explained that advertisers are a little skittish on new media deals because of the excesses of the dot-com boom era, when advertisers invested without much concrete data. “People like me are not going to assume a big financial risk,” he said. Still, he’s confident that ITV ads will be the norm in 10 years.



Immediacy Imperative

While there’s no “scale” today for ITV, the number of markets with ITV ads is growing. Time Warner Cable, for one, has deployed Navic Networks technology in its Albany, N.Y., system. Navic allows viewers to request more information when an overlay appears during a commercial. Local advertisers State Farm, Upstate Ford, Direct Buy and Vanguard are using ITV ads there and have seen some success, said Jonathan Spaet, VP of national sales, New York, for Time Warner Cable Media Sales. Time Warner plans to introduce the capability to additional systems in the Northeast and Southeast later this year.

What ultimately will make VOD and other new media platforms more attractive to some advertisers is immediacy. Today, VOD content has to be delivered to operators several weeks before air, and the ads stay with the content during the life cycle on the VOD platform, which could be a month or more.

But movie ads, for instance, have at most a six- or seven-day shelf life, and in many cases the ads are being trafficked as few as two to five days before air on broadcast or cable networks, said Jeff Platt, director of advertising and research at New Line Home Entertainment.

Cable operators are testing solutions that allow ads to be swapped in and out of VOD content on a weekly basis. Tandberg Television, for one, is testing with Comcast Spotlight its AdPoint platform that does just that.

When VOD ads can be fresher and replaceable, movie advertisers will place more interactive ads, Mr. Platt said.

Other new ad forms the industry will see in time, according to Raj Amin, VP of content and advertising markets at Tandberg, include showcases, or longer ads; bookends that run immediately before or after content; addressable ads that are targeted for households or neighborhoods; pause ads, in which a message is delivered when content is paused; and telescoping from a short ad to a long ad.

At the upfront, Turner plans to offer some bumpers and 30-second spots in VOD content as part of upfront buys, said Chris Pizzurro, VP of multimedia marketing at Turner, who attended the meeting.

The benefit of VOD advertising is that it’s measurable, and advertisers can know actual impressions rather than just a projection from a sample.

While critical mass certainly hasn’t been reached, or even defined as it relates to new media, advertisers are better off testing technologies and figuring out what works now on a small scale, said Frank Foster, president of erinMedia, an audience measurement firm that uses set-top box data. “You have to work out the bugs,” he said.