How Can You Not Be Excited About Interactive?

2006 is shaping up to be a watershed year for interactive marketing. And two recent developments have me more excited than ever about our industry’s future.

The first is NBC’s “The Office.” This sitcom delivered its highest ratings ever a couple weeks ago. What’s really exciting is NBC is attributing the show’s ratings bump (up to a 5.1 rating from a previous high of 4.5) to the program’s distribution via iTunes.

The second is a study released by the Polk Center for Automotive Studies (that’s R.L. Polk and Co.). This study finds traditional media is nearly obsolete among first-time car buyers; first-time buyers consider the Internet to be the most important tool in their car-buying research.

What do these two things mean for us?

NBC and iTunes

The iTunes thing is paradigm-shifting huge. It indicates alternate forms of TV content distribution are viable. And, at least initially, that type of distribution isn’t cannibalizing an existing audience, it’s supplementing it. Online TV content distribution is generating larger audiences for the shows, not subtracting from them.

NBC isn’t the only network seeing the benefit of making content available through iTunes, either. ABC, the first to forge a deal with iTunes, has seen its audiences for “Lost” and “Desperate Housewives” grow dramatically. According to TVWeek.com, the audience for “Lost” rose 14 percent this year; ratings for adults ages 18 to 49 are up 28 percent. The total audience for “Desperate Housewives” is up 7 percent, and ratings for the 18 to 49 group are up 3 percent. iTunes downloads for both shows continue to rise.

According to TVWeek, “The iTunes offering is bringing new audiences to the show that would not otherwise have watched.” Said Frederick Huntsberry, president of NBCU Television Distribution, “Consumers have choices, and we are not reaching all consumers with one technology.”

The way I see it, there are a couple things going on. More MP3 players means more people using iTunes, and that means more people with alternative access to video content. Even if people don’t have video-enabled portable media players, they can simply watch the content on their computers through iTunes or Google Video.

The next evolution, and what’s really got me excited about its potential, is advertising-supported video content. Points North Group recently released a report indicating people would prefer ad-supported video content as opposed to paying for ad-free content. Points North researchers asked consumers, “If you missed your favorite TV show and could order it later on-demand, would you prefer getting that content free with commercials or paying $1.99 for an ad-free version?” Get this: 62 percent of survey respondents said they’d prefer getting it free with commercials; 17 percent would pay $1.99 for an ad-free version; and 21 percent were undecided.

(A quick query: My agency has been trying to connect with the right people at iTunes, Google, and television networks to figure out how we can test this proposition and let people download video content through iTunes for free or at a discount in exchange for having commercials in the content. If you work for any of those companies or know whom we might need to contact there to get this ball rolling, please let me know.)

The R.L. Polk Study

The press release for the study ran the headline, “Polk Study Finds Traditional Media Nearly Obsolete Among First-Time Vehicle Buyers.” I’m not ready to dance on traditional media’s grave, but it’s great to have traditional institutions such as R. L. Polk acknowledge the importance of interactive in the car-buying process.

Sure, this is specific to first-time car buyers (defined by Polk as 18-30 year olds and the primary driver of the vehicle purchased or leased). And sure, this group is obviously more likely to rely on the Internet than older car buyers. But this is still significant validation of interactive in a significant category. I still believe a media mix solution is the best approach to reaching consumers. Smart car brands are acting on these findings, realizing brand relationships start with first-time buyers. That relationship now begins on the Net.

In case you couldn’t tell, I’m excited. Really, really excited. 2006 is going to be a fantastic year for our industry, a year in which we’ll make one of those great leaps forward. If you run across studies, big ideas, or the like that keep you excited about interactive, let me know.

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