Digital, Interactive and Web TV

Implications for the Advertising Industry Part 2

[Multi-medium Distribution Channels] [Knowledge Acquisition] [Integrated Processes]

Part 1: New Advertising Models: [Micro Advertising] [One to One Advertising] [Portal Advertising]
[Payment by Results] [Affiliate Advertising] [Cross Marketing Alliances] [In Programme Promotion] [EPG Promotion]

Multi-medium Distribution Channels

• Choice of Mediums: With busy and unpredictable lifestyles, consumers are demanding companies be available on any day and at any time of day - the 7/24 society. In the near future customers will extend this choice to the mediums used. Use and familiarity with interactive TV will encourage consumers to use other new interactive mediums: PCs, kiosk systems, and the more sophisticated mobile 'phones, pagers, and PDAs. Companies in turn will need to be able to receive and consolidate and integrate customer messages from all these mediums.
  • A consumer may make see an advert in their morning newspaper, make an initial enquiry via their PDA, and later in the day get a query back by mobile phone. Then, on returning home in the evening, find a personalised proposal sent by email to their PC or Internet-TV.

• Different Mediums: A challenge for advertisers is to deliver the same message over a range of mediums which have different physical characteristics. In many cases the format and length of the message will have to be amended and the customer directed to another devise (e.g. their home PC) for more in-depth information.
  • Mobile phones now come in different types: speech only, short text messages, long text messages, and internet text pages. The next generation will support graphics, video and sound. Digital TVs will also be in different formats: standard TV using a set-top decoder, wide-screen TVs, and eventually high-definition TV. The decoders themselves conform to different hardware and software standards.
• Integrated Mediums: Many devices will support multiple mediums and the challenge will be to transparently switch the customer from one to the other.
  • A Digital TV advert may have a press the blue button for more information. Pressing this button would connect the TV to the internet for more information. Because the decoders will have a smart card the supplier's web site will be able to identify the customer and produce a tailored advert. And it almost goes without saying that all this information, including what the customer has just been viewing, should be to hand when they make that telephone call to the Call Centre - then it's time to close the sale - not irritate the customer by asking lots of questions.

    TV Call allows viewers to respond to a TV ad and then be connected to a call centre.

  • Similarly, telephones are now on the market with built in keyboards and screens allowing data to be accessed and displayed without having to boot-up a PC. Instant information includes railway timetables, interest rates, share prices, theatre seats, hairdressing appointments, etc..
• Interactive Mediums: A new generation of rich interactive adverts will really engage the recipient thus increasing the propensity to buy.
  • A recent @Home Network study found recall of rich media ads is 34% higher than regular banner ads, and of those who clicked on rich media ads, more than half spent 30 seconds to five minutes engaged with ad information and the brand.
  • Nissan linked up with Sony's Playstations to launch a new automobile. 12 students were sent on a coast to coast drive with digital camcorders linked to the web that was then also accessible via the Playstations.
• Media companies will need to master digital authoring and recording of adverts using a more modular approach. Much of the material will be re-used in different adverts and in many cases the assembly will be dynamic, driven by the responses of the recipient - see Enterprise Repository.
  • In a financial advert for an ISA, pressing the blue button on the TV remote would explain the various forms of ISA using video and animation; the yellow button the range of investments (and then the numbered buttons specific investment history with graphs with user defined parameters); the red button the terms; the green button access to an advisor, and so on.
• Variable Responses: Each of the different mediums has a perceived response time. People often expect e-mail responses within the day but a telephone response within 3 rings. Digital TV is even more responsive demanding because in many cases viewers will be responding to a advertisement, and not just in ones or twos, but in their thousands. These are hot leads and every effort needs to be made to convert them into a sale.
  • The US Home Shopping Network has 1,000s of operators to take the orders, with each operator backed up by a product knowledge base to answer any customer queries.
• Digital TV decoders require a smart-card, programmed to give access to the various channels according to the subscription paid. In the future these cards will also hold personal data such as name, address, credit card number. At the touch of a button a viewer could release this information saving valuable time and eliminating errors. Remember, the viewer probably wants to get back to watching their TV programme!

Knowledge Acquisition

• Customer Tastes: The new class of Web analysis software is equally applicable to Digital TV. Analysis will encompass not just programme preferences but also customer's responses to adverts, the goods and services they purchase, and any additional information they request. Such information can not only be used to build a relationship with particular customers but also used to to develop marketing, pricing and other strategies such as the direction of new product development.
  • One method that Lifetime Television uses to evaluate the popularity of its cable TV programs is by gauging Web site traffic patterns that follow the programs, said Carey Goldson, manager of MIS for the cable network. That information helps Lifetime determine how to spend marketing, programming and even IS dollars, he said.
    - InternetWeek, March 29, 1999 / AdMedium Newsletter.
• Customer Profiles: Internet visitors are anonymous but Digital TV viewers have to subscribe. This immediately locates them at a physical location from which other demographic information can be derived. Then, over time, the provider gathers explicit information about interests (e.g. those customers regularly watching a gardening programme). But the real leap to customer knowledge comes when a relationship has developed such that subscribers volunteer information about their lifestyle and interests. In return, the TV provider can reduce the number of adverts (a current complaint of satellite and cable is that there are too many ads) by restricting adverts only to those of interest.
• Customer Interactions: Besides web browsing or shopping, Digital TV will give suppliers and manufactures a direct access into the homes of millions of people. PCs are usually left off and take time to start up. TV is instant, almost like a telephone. This should encourage more feedback from customers, particularly when linked to a reward programme, ideally one that grades feedback and rewards accordingly.
  • Netscape allows customers to type a product name and then get connected to the supplier's site.

Integrated Processes

• Acquisition Process: Customer's buy products to meet their needs and to bring benefits. It's important, that whatever medium customers chose, they should be taken smoothly through the acquisition process. This means not only supporting different mediums but also reflecting the capabilities of the mediums, the varying capabilities of the customer, their personal behaviour, and the frame of mind of the customer at that instance.
  • For example, a customer may see a TV advert for a savings account and then spend just 30 seconds interacting with the ad (before the TV programme resumes) and then decides to hit the more information button - finished! He or she doesn't want to be filling in financial questionnaires!
• Life-long Processes: Whilst customers' expertise will vary, they do all possess knowledge. Knowledge about how well or not so well the company's products and services meet their current needs, and knowledge about how they personally are impacted by life style changes. To tap into this knowledge companies need to have processes in place to assist customers in particular circumstances, or indeed throughout their whole life. Processes for helping people to question, interpret, simulate, and adapt to all that life throws at them.
• Cross Organisational Processes: These processes transcend the whole organisation. The challenge is to make it seamless. It may require changes to organisational structures, the development of new cultures, the orientation to a knowledge organisation, the creation of central knowledge base, and the analysis of this base. This is a long journey, defined by a vision and executed incrementally. A methodology helps to structure this journey. In short it needs Strategic Interactive Marketing.
• Integrated Marketing: These new electronic mediums are seen as so radical that in most organisations they are given a separate and almost god like existence. The argument goes that dynamic technology needs young dynamic wiz-kids, unfettered by traditional ways of marketing and selling, and able to seize the opportunities as each week brings its bounty of new technology.
• Whilst in the early days of the net, with its young, male and nerd audience, this might of worked, it will no longer work. The internet is changing to a broad church. Women now make almost 50% of the net population. Older people, with time and money, are enthusiastically taking to it. And Digital TV will really bring the masses to these electronic mediums. These customers will see Digital TV as just another medium and will expect it to be as easy to use and as convenient as the telephone.
• It is imperative that organisations integrate these new mediums into their other delivery channels. Marketing programmes needs to embrace all channels such that each provides synergy to the other, and then each channel should be able to respond to whatever choice the customer makes - including multiple choices by any one customer. Most importantly, the new mediums need to be seen to be part of the overall brand.

Back to Implications for the Advertising Industry - Part 1:

New Advertising Models: [Micro Advertising] [One to One Advertising] [Portal Advertising]
[Payment by Results] [Affiliate Advertising] [Cross Marketing Alliances] [In Programme Promotion] [EPG Promotion]

Next is Implications for Financial Services

External Resources
 

1. Cooper, Alan, 1998, TURNED On, Tuned in, Internet Business, November 1998.
2. Cooper, Alan, 1999, Customer Knowledge Management and Mass Customisation, Internet Business, April 1999.
3. Cooper, Alan, 1999, New Advertising Models and Opportunities in the Interactive Age, presentation to National Association of Advertisers (ANFO), Oslo, 24 November 1999
4. Digital News, Number 10, September1999, Digital Television Group.
5. Wyatt, Jill, 2000, Feeling like Chicken Tonight?, Marketing Business, May 2000
6. See the full list of resources for this web site for other related resources.

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