The New Wild West, Part 2: iTV

Last time, we began a look at a new interactive industry’s emergence. This industry is founded on the “10-foot interface,” or video consumption through a TV screen (in one’s living room). This new industry is analogous to online in the mid ’90s. There are few rules, and clearly no standards or established processes. Additionally, the 10-foot video experience is rapidly migrating from a passive consumption experience to a far more (inter)active one.

Today, we look at interactive television (iTV) and the emergence of true “t-commerce” (commerce conducted via the TV set). The interactive element adds an entirely new dimension to TV advertising. The traditional pricing model for TV advertising was based around the opportunity to see, or cost per available eyeball. The new interactive dynamic provides incremental engagement opportunities and, arguably, an incremental cost to advertisers. Needless to say, the industry is still trying to figure out how pricing should work as interactivity is introduced.

A variety of applications can take advantage of iTV two-way interactivity: consumer polling (play along with a game show by using your remote control), direct response (click your remote control to learn more about XYZ), commercial overlays that can link to long-form video content, and commerce (like that shirt you see on Ryan Seacrest? Buy it now by clicking “A” on your remote).

Hawaii’s Oceanic Time Warner and Navic Networks have had an interactive TV trial underway since last year. Some things they’ve been experimenting with are jobs on demand, bill pay (view, review, and pay your cable bill), click to upgrade (sign up for new services with one click), and pizza on demand (order pizza, pasta, appetizers, and soda from a local Pizza Hut restaurant with the remote control).

Cablevision allows viewers to play games, browse personal ads, monitor live traffic cameras, and watch sporting events from viewing angles of my choosing via the TV interface.

Most recently, the Home Shopping Network (HSN) announced a deal with GoldPocket Interactive on an ambitious “click and buy” initiative. The initiative is designed to make shopping on TV simple and intuitive. It features one-screen technology to create a user-friendly interactive shopping interface.

“All iTV viewers with an existing HSN account will be able to order a wide variety of products through the application including the item currently being shown during the live broadcast as well as the two items immediately preceding it,” according to a GoldPocket press release. “The interactive application will have the same order customization capabilities — i.e. selection of size, color, quantity and features — currently available through traditional ordering methods. Order confirmations will appear on the TV screen following each purchase.”

All this is very cool stuff. It’s also riddled with complexities and a lack of standards. If you’re a marketer looking to take advantage of iTV new technologies, be prepared to write the rules as you go. Cable and satellite operators are staying up nights trying to figure out pricing scenarios that make sense for all these new interactive technologies.

It’s truly still the Wild West.

A few things must happen for serious progress to be made in the iTV space. Industry bodies must decide together what’s important to measure and how to measure it (this is well underway with groups such as the IAB, ARF, AAAA, and ANA). Companies that specialize in analytics and audience measurement must build systems to quantify this new landscape.

Concurrently, marketers must begin serious testing and trials across the spectrum of iTV services. We must work with cable and satellite operators on a variety of pricing platforms that make sense in light of everything we know about the value of engagement, interaction, and action. For starters, we can take a page out of the Internet playbook.

Before we know it, this will be an established industry with norms and standards, measurement, and analytics that meet the needs of today’s marketers.

Until then, giddyup!

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