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ITV: Making the Same Mistakes

  |  January 22, 2003   |  Comments

The fledgling iTV industry should learn from mistakes made in Web advertising's early days.

A few weeks back, I was invited to speak on a panel to discuss the future of interactive television (iTV). Since it was being held on December 23 at a downtown New York hotel, I expected only a few people to show up. Who wants to attend an industry event two days before Christmas?

To my surprise, almost 100 people packed the room, and they were eager to hear about, and discuss, the opportunities within this new medium. It was exciting. Though iTV is still a fledgling industry, the enthusiasm in the room reminded me of the early days of the Web.

If you work in online advertising and don't know anything about iTV, it's time to do your homework. Although it is not clear when it will reach the critical mass that will attract serious advertising and marketing dollars, I am convinced it is not a question of if but when.

In fact, millions of television households today have some kind of interactive capabilities, ranging from VOD to home shopping. What's slowing development the most is the industry is highly fragmented, thus creating barriers to major investment by advertisers.

If this reminds you of online advertising before the advent of third-party ad servers and standard formats, you're right. In fact, there are many parallels between iTV and Web advertising.

Hopefully, the iTV industry won't make the same mistakes we did. As a new marketing medium, iTV should take to heart as it grows a few important lessons:

  • Give people what they want. As far as I can tell, there is still no killer app for iTV. Ordering pizza from the TV set or clicking on a star's jeans for more information about them is simply not compelling enough for most people. The iTV industry needs to develop approaches that are consumer-centric, based not on what is technologically possible but on what people actually say they want and need.

  • Give advertisers what they want. The way advertisers plan, buy, and evaluate advertising campaigns hasn't changed much in decades. The online advertising industry is only now realizing how important it is to develop reach/frequency metrics that will allow the Web to fit into traditional media plans. ITV should develop its own advertising opportunities to be consistent with standard advertising processes from the get-go.

  • The medium is the metric. My colleague Joe Jaffe coined this phrase, and it's a great one. The way a medium measures success inevitably becomes the definition of its value to advertisers. The Web's early reliance on click-through, which led to a perception that it failed as an advertising medium, should serve as a cautionary tale to iTV.

    Advertising is about changing the way people think and feel about brands. You'd never be able to support the production costs of "Friends" by getting people to click on pizzas and jeans. ITV should use branding as the central success metric for the industry.

  • Don't be a copycat. Advertisers are always trying to adapt their television advertising to the Internet. Sometimes it works, but only when advertisers understand and respect just how different the two media are.

The iTV industry is schizophrenic, with some companies treating iTV as if it were just TV with interactivity and others treating it as if it were the Web with elements of television. It will take a while for people to realize it is actually a singular medium of its own.

The development of interactive television is confusing, and trying to understand its new opportunities may seem daunting. But the good news is if you have seen online advertising develop over the past five to eight years, you are as much as an expert on its future as anyone.

Now that's exciting.

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Jeffrey Graham

Jeffrey Graham is vice president of client development at Dynamic Logic, a company he joined in January of 2001. Dynamic Logic specializes in measuring the branding effectiveness of online marketing. Jeffrey has served as research director at two online advertising agencies, Blue Marble and NOVO, and has worked with clients such as General Motors, Procter & Gamble, and Continental Airlines. He has taught Internet Research at New York University and has a Masters degree in the subject.

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