TV, The Internet and VOD Advertising: It's All About Choice
by Simon McGrath , Monday, March 2, 2009  In an recent Video Insider, Eric Franchi wrote about the slow uptake of video as an option among DRTV advertisers. His argument, that marketers are still trying to "unlock the code" to make advertising in online video work, is spot-on, and the conclusion -- that the direct-response model we have now doesn't translate online -- resonates.
There was a time when the TV was basically the only place in your house where advertisers fought for your attention, but that has changed. Today marketers must include cell phones, PDAs, and Internet-connected laptops and desktops as they consider the best outlet for sales generation. TV, much less video, looks less and less appealing. After all, networks have slowed ad spending by 4% in Q2 2008, while local broadcast spend dipped 6.1%, according to the Television Bureau of Advertising. Online advertising is challenging TV ads with significant growth -- 15.2% during the first half of 2008, says PricewaterhouseCoopers LLP.
But while the Internet offers convenience and cell phones offer ubiquity, nothing beats the quality of the TV viewing experience. As Franchi observes, "nothing engages like sight, sound and motion." Time-shifting technologies like DVRs and video-on-demand offer consumers new ways to watch TV on their schedules. DVRs and TiVo have played a role in decoupling advertising from traditional delivery channels, introducing time-shifted viewing alternatives to consumers weary of appointment TV. By enabling viewers to separate TV viewing from network schedules and advertising, DRTV has done more than change the length of ad spots; it's also changed the nature of brand and relocated the center of gravity between marketing message and ROI.
Now advertisers must think deeply about the nature -- and channel -- of interaction with consumers to come up with advertising that makes sense in time-shifted TV. Marketers seeking to connect with consumers must select ad formats and delivery platforms that value results over branding. There is a lure to the quick-hit pull of online ad clicks, but video systems offer similar response mechanisms and reporting capabilities. What will it take for marketers to look to video?
Video-on-demand (VOD) advertising is becoming a viable alternative. It presents consumers with marketing messages and choice, and it has presence -- Forrester estimates it's available to 75% of digital cable subscribers in the U.S. VOD also supports a variety of ad formats, from the familiar embedded ad spots to ad overlays, bookends and long-form, on-demand "showcase" ads that deliver information and interaction.
The final piece of the puzzle for advertisers considering DRTV is an AdWord-type clickable link between traditional ads and showcase ads. Available today, this functionality represents an advertising model that makes sense for viewers and advertisers.
DRTV advertising using VOD ties together the interaction of the Internet, the location capability of the cell phone, and the content of cable and TV operators. It delivers relevant content, at the right time, to the right viewer, with advertising messages that link interest, intent and action.
DRTV/VOD Advanced advertising systems can "unlock the code" by including recommendation engines and social-media style components that will increase viewer choice and advertiser synergies. Technology is available now to bring Web browsing functionality together with the data in a viewer's VOD directory or cable box, enabling advertisers to target, to the zip code, viewers whose viewing history indicates receptivity to messages. Social media elements of the technology let viewers recommend programs -- and products -- to their friends and contacts. Those viewers who make the investment in recommending TV content to their personal networks are more likely to pay attention to the advertising that is embedded in it.
In 2009, addressability may be the missing link that ties viewer choice to advertiser content, to serve ads according to program genres that viewers actually want to watch. With innovation and understanding, marketers and advertisers can make video and DRTV a viable path to the consumer.
It's time to turn on the TV again.
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