2005 is looming as a critical time for digital television—as the free-to-air (FTA) networks struggle with a tangle of regulatory red tape and set-top box compatibility problems, pay television’s digital penetration, nearing 650,000 households, is exceeding FTA TV
Following the success of pay television’s digital launch, sales house MCN will soon roll out a full-scale interactive advertising service exclusively for the Foxtel digital platform. The first interactive campaigns are set to launch in April, MCN business and digital development director Damian Keogh says.
“We have two launch partners and will probably do about 10 to 12 campaigns for the year. We waited until there was a scale of digital set-top boxes out there, and a lot of digital subscribers who have quickly become very comfortable with pressing the red button [on their digital remote control] for [interactive] applications like Sky News Active, Weather Active and Fox Sports Active,” Keogh says.
As with these interactive programming applications, Foxtel subscribers will soon be able to press the red button on their remote controls when prompted by the screen during an advertisement.
“When people press the red button on a TV commercial, they go from a passive viewing experience to an active viewing experience and we think that will be the killer application in how a normal 30-second ad might work,” Keogh says.
MCN is planning to offer several products to advertisers over the next 12 months, starting with impulse-response spots—ads that will be last in an ad break and will be able to go beyond the 30 seconds of the standard TVC, if viewers choose.
A second product is known as a ‘dedicated advertiser location’, which will take viewers away from the channel they are watching to a site where they can have a ‘deep brand experience’. Other products include one that drives brand awareness through a retail offer and there is also the possibility of branded games.
The UK experience
Keogh says MCN’s advertising models are the result of first-hand research at Britain’s BSkyB digital TV network, which launched interactive services in 2000, and has grown its interactive advertising offer significantly since then.
“Cumulatively, Sky has done about 5,550 interactive ad campaigns, and about 60% of its overall advertising is now interactive. So a lot of TV advertisers, who in the past have done traditional advertising, are now looking at what they can do from an interactive perspective.”
One of the challenges in the UK was educating the market, Keogh adds.
“It took a couple of years, but once the creative agencies took more ownership of the process, it really took off over there.”
While we can expect Foxtel to closely emulate the approach taken by BSkyB, high-end interactive advertising models won’t be a part of it, according to Murdoch University Interactive Television Research Institute director Duane Varan.
“In the UK there are a range of high-end models that require a lot of bandwidth to deliver, which we are unlikely to see here because bandwidth is more scarce. So the more advanced models in operation in the UK, such as picture-in-a-picture with some video content, won’t be rolling out [here].”
But Varan is quick to point out that high bandwidth does not necessarily equate to more impact: “It’s dependent on the objectives of the campaign and there’s a whole new craft there to learn.”
The Australian experience
Keogh says media and advertising agencies have been very positive about the full-scale launch of interactive advertising, especially those familiar with Foxtel interactive television programming.
“One of the things we are seeing in the agencies is that people who’ve got Foxtel digital and have experienced interactivity first hand have a significantly better understanding of how interactive advertising will actually work,” he says.
“Like many other new forms of advertising, we will need to have partners who will say ‘yes, I’m an innovator in new marketing’; but at the same time we need to be careful that advertiser does get involved has an experience that’s affordable and accessible.”
Varan says it is critical for advertisers to experiment with interactive advertising and to develop specific models that will work in this market.
“In the next five years we are likely to see a lot of global marketing forces that will impact on Australia. Our market has a lot of anomalies in the regulatory environment as a whole, but both the US and Europe are moving ahead rapidly, and as people find success I think there is going to be more pressure to use those models out here.”
The PVR factor
Another important factor is the rise of the personal video recorder (PVR), a device that effectively allows viewers to time-shift their television viewing. While PVRs have only recently become available in Australia, their penetration in the US market, and how global brands reposition to take advantage of the technology, will create a significant impact for local marketers, Varan says.
“What we will get here is a powerful aftershock, so even before there is any significant PVR impact, the strategy of the global brands will have changed to accommodate them,” he says.
“That will be even more dramatic when Nielsen starts reporting time-shifted behaviour separately and with those metrics in place, business models change.”
Foxtel recently launched its own PVR, the iQ box (see story page 18). Keogh says MCN has already had discussions with the pay television provider to encase advertising content within the iQ system.
“For example, if the viewer is watching a movie ad, they may have the option to push the red button and it will send an extended trailer for the film to your PVR. But there’s the question of scale and how many boxes need to be out there in the market before it can become cost effective,” he explains.
No free competition
Meanwhile, the woes of free-to-air digital television (see story page 18), include minimal interactive capabilities in currently available set-top boxes, which means interactive digital TV advertising won’t be seen in free-to-air broadccasting for quite some time, Keogh says.
“We’ll have a clear go at it for a while, but we expect they’ll be having a close look at what we’re doing. Somewhere in the future it would be fantastic if advertisers could put their campaigns across a couple of different platforms, but it’s a long way off.”
