Following news earlier this year of Sky's plans to launch a green-button interactive TV service enabling TV viewers to download ad content via their remote controls, rival Virgin Media is now preparing moves to develop a new interactive advertising platform.
The cable firm is developing a new service that will allow users to watch long-form ads on demand. The Showcase service will be different from Sky's planned green-button offering as it will be viewed through an on-demand area. Sky already has a dedicated on-demand area for interactive campaigns called Ad Showcase, accessed via Sky Interactive, from which Sky receives 20% of responses to its campaigns.
Media consultancy Decipher's senior researcher Hamish McPharlin says: "Virgin's Showcase is a proven model." But, he says, accessing the ads from the EPG means it will "not work for just any advertising as it needs people to go and browse for it". Consumers will only respond to good content, he warns.
"In this new age of advertising, that is about advertisers identifying with cultures, such as a mobile brand offering music videos or a car company offering a competition to win a car."
Red-button services - the conduit for the first wave of interactive TV services - have gained support from car manufacturers, but have failed to make waves among other advertiser groups. Sky says 40% of its campaigns are from car manufacturers, which see a direct conversion to sales from its responses.
Leading the way
Sky has led the way in red-button interactive advertising, taking viewers into branded environments with Dedicated Advertiser Locations (DALs), and last year launching cheaper Video Advertiser Locations (VALs) to offer advertisers up to 12 minutes of video ad content airing for a week at a time. As a way to build a brand, Sky claims red button has been successful.
Chloe Smith, head of interactive advertising at Sky Media, says: "TV is a fantastic space to put longer- form footage from advertisers. People sit down to be entertained by TV and what red button is good for is long-form video."
Fox's two-week VAL campaign for its Family Guy DVD box set resulted in an average dwell time of nearly six minutes. Sky says 15.7% of Sky homes interacted with a DAL in 2007, with "interactors" 142% more likely to buy a product than viewers of linear ads. Sky also highlighted an Adidas red-button campaign, through which "interactors" were 2.2 times more likely to buy products.
But Sky admits the number of its interactive ad campaigns has remained flat year on year at about 40 for the first quarter.
Many agencies remain unconvinced of the medium's impact. Dan Harris, business director at Zed Media, says: "Red button has not outshone other channels. It is not an area we are actively pursuing. For the majority of clients, it doesn't work as well as internet channels."
Andy Benningfield, head of broadcast at BJK&E, says despite high bandwidth costs, red-button services are still successful for car brands. "People spend an average two-and-a-half minutes in the interactive space. Red button has been evolutionary and has stimulated interactive advertising. People say red button is dead but, for brand experience, I can't think of anything better."
Five abandoned its red-button interactive services this year, while in 2006 Channel 4 axed "clunky and inefficient" enhanced programming options, but still offers interactive ads. Of the commercial terrestrials, agencies say only ITV offers strong interactive services.
Benningfield admits that, if advertisers want high response numbers, interactive TV doesn't stack up against the internet. But he claims interactive ads "should never be judged on response levels alone", as they can increase web traffic.
But even Sky's Smith says red button has its drawbacks. "Perhaps the main problem is that it is not being seen as moving on and people are forgetting about it among the new platforms. Without red button, how to you drive traffic to this area."
So will the development of new services take interactive TV to new growth levels? Smith says new services are "a natural extension" to red button and claims "green button will be cheaper". On the downside, because only those people with Sky+ boxes can access green-button services, such offerings are likely to pull in fewer viewers.
Agencies have mixed views about its future potential. Benningfield says new green-button services and Virgin's on-demand ad area are a "great idea", as interactive services force users to leave their programme to view advertiser areas. "This will be a way for people to download ads to watch in their own time," he adds.
But Zed's Harris says: "My concern with green button is still that it would work for a small number of very aspirational brands, but not for our financial or charity clients. The most we can expect is more interest in the interactive world."
Sky's Smith admits: "Interactive advertising is always going to be a niche product - elite advertising you might say."
THE HISTORY OF INTERACTIVE ADVERTISING
2008 Five abandons red button; Virgin Media Showcase expected to launch
2007 Sky launches Video Advertiser Locations and Ad Showcase
2006 Channel 4 reduces red-button service
2004 Five launches interactive ads
2002 Channel 4 launches interactive advertising
2000 Interactive Advertising launches on Sky with Chicken Tonight Dedicated Advertiser Location campaign
Green button v red button
Red-button interactive advertising takes viewers who press red away from their programme to watch long-form ad content in a Dedicated Advertiser Location or a Video Advertiser Location. Green- button services will let viewers download ad content to their Sky+ box to watch later, offering longer creative options
This article was first published on Media Week