LOS ANGELES (AdAge.com) -- Advanced advertising, or technology that makes TV ads interactive or addressable to specific audiences, is an initiative that has been touted, tested and occasionally implemented by advertisers over the past decade, but with little achievement in national scale. It's also been hyped since 2001 in Ad Age's own pages as the saving grace for the $70 billion spent annually on ads rendered increasingly irrelevant by the DVR.
Here, we revisit three of our previous predictions on the emerging technology to see what went wrong, who's leading the charge now and what's working for some marketers.
Prediction No. 1: Interactive advertising will be the branded entertainment of the future.("Getting Viewers to Opt in, Not Tune out," Nov. 4, 2002)
TiVo, then the country's largest provider of digital video recorders, was going to revolutionize the way we watched and interacted with advertising during live TV and video on demand, giving marketers all new opportunities to contextually insert their ads during programming and branded VOD channels.
Were we right?: Sort of. While interactive advertising and branded VOD are still measurable trends today, they're far from the holy grail we predicted they would be eight years ago. The key culprit? TiVo, which was beaten at its own game by cable and satellite operators offering their own DVR offerings to consumers as a competitive advantage. The fractured DVR market led many marketers to develop original VOD content on a one-on-one basis with operator partners, often at the expense of major scale.
Next steps: Specialized agencies such as Brightline I-TV are working to create interactive opportunities for advertisers across a network of 70 million cable, satellite, telco, TiVo and Xbox homes. Marketers such as Unilever, Reebok and Burger King have been using interactive TV for years to generate leads for product samples and other promotions, with an average click-through rate of 3% to 5%. Brightline CEO Jacqueline Corbelli said the company executed about 40 interactive campaigns for clients in 2009 and expects to double that amount this year. "Marketers don't feel as trepidatious about entering the space. It's not new for them anymore," Ms. Corbelli said.
Prediction No. 2: Addressable advertising will finally achieve scale once Project Canoe rolls out.("Taking another shot at addressable advertising," March 17, 2008)
The formation of Canoe Ventures, a joint venture of the six largest multiple-service operators including Comcast, Time Warner Cable and Cablevision, would create a common platform for marketers to target multiple TV viewers with different versions of the same ad that could be swapped out depending on the ZIP code or household demographic.
Were we right? No. Once Canoe CEO David Verklin identified a major privacy issue in getting all six cable operator partners to release their customers' demographic and set-top box data, marketers and cable companies had to take matters into their own hands to prove the technology worked at a local level. Recent trials in Huntsville, Ala., and Baltimore between Comcast and Starcom MediaVest Group clients Procter & Gamble, Wal-Mart and General Motors proved that addressable ads were 38% and 32% more effective than nonaddressable ads, respectively, for the two markets.
Next steps: Currently, 55 million cable households are able to receive zone, or ZIP code-based, addressable advertising, while 3 million households are expected to be able to receive household-addressable ads by third-quarter 2010. Tara Walpert Levy, president of advanced advertising company Visible World, said the recession accelerated a lot of marketers' and cable companies' experimentation with the technology, which should lead to more use this year. "It wasn't a priority relative to other parts of cable companies' business because it's a complex issue," she said. "But now that there's proof that addressable technology could be deployed at scale is a real wake-up call."
Prediction No. 3: Interactive advertising will create incremental sales and revenue opportunities for cable networks.("ESPN Rolls Out Interactive Features," Dec. 23, 2008)
Networks like ESPN readied interactive applications that would create live polls, content-based overlays and other features to enhance their live programming and create web-like targeting capabilities for their advertisers.
Were we right? Not yet. ESPN's ITV apps were reliant on the use of EBIF, a technology that allows viewers to engage with TV ads directly from their set-top boxes, but it has yet to roll out in enough households for a national cable network to be able to transact in a meaningful way.
Next steps: Advertisers are teaming up with cable operators like Cablevision, which became the first cable MSO to offer interactive ads across its full footprint (3.1 million homes in this case) via its Optimum Select product. The first campaigns for Gillette, Benjamin Moore paints, Century 21 clothing and Colgate-Palmolive Co. were so successful they were taken off the air a full week on average before their scheduled end time due to overwhelming demand and low inventory. Comcast Spotlight also saw some strong early results from its first TV deployment of interactive newspaper circular ads, while Time Warner Cable has been experimenting with coupon-based VOD ads for its local advertisers.