Riding the Backchannel to Interactivity

Intermediary

With the announcement in May by the TM Forum that Rory Sutherland, vice chair of the Ogilvy Group in the U.K., joined its advisory board, it is clear the forum is thinking along the same lines. Sutherland described the appointment as a fabulous opportunity to shape the way the communications industry talks to the advertising industry.

According to Michel Burger, services architect at Microsoft, the user events generated by IPTV users don’t have any financial value by themselves. Service providers must figure out the rating and charging schemes will work.

“Advertising may be one way of providing value, but there may be more interesting things a service provider can do,” he said. “Once you build a data set, business intelligence is another way to generate revenue.”

Burger said IP is much more measurable, which means it is much more controllable and that is why IPTV is so promising. “So I don’t see revenue moving away from IPTV [and to the Internet] because the measurability effects are too great,” he said.

The reality for both Internet- and IPTV-based video providers is that advertising itself is under pressure. Consumers are finding ways around it. According to Interpret LLC, a media and market research firm in Santa Monica, Calif., 28 percent of consumers said they were less likely to pay attention to TV ads than they were a year ago.

Fifty-six percent said if they could, they would fast-forward through every TV commercial, and up to 64 percent of women said they would be willing to pay to avoid watching ads. So no matter how good the data a service provider may have or how creative its interactivity, technology and consumers are making it more difficult for advertisers to reach them.

Perhaps that is why BT has a business plan that doesn’t depend on it. “We see advertising as an important part of the platform, but we also have a road map where the BT Vision stands alone,” Carbonari said.

The good news for IPTV providers is that interactive television advertising seems to be more “sticky” than regular TV, online or any other form of advertising. “Interactive television customers are 75 percent more likely to know and associate brands accurately versus watching a static ad on TV,” said Kelly Anderson Neiman, head of the Cable Markets Sector at the TM Forum (for more, read Standards Watch on Page 20).