Adjust your set for an ad fad

Viewers are about to get the wish muttered by millions, writes DITA DE BONI. 'If only you could fast-forward the ads.'

You're watching US smash sitcom Friends, and the impossibly coiffured Jennifer Aniston is wearing an outfit you think would be fabulous to wear at this year's Christmas party.

Experts say with an interactive television you will eventually be able to click on her outfit and order it as you sit in front of the goggle-box stuffing your face with potato chips.

The same applies to nappies on a baby show, cars on an auto show, couches on one of those endless home renovation series, and so on.

An advertiser's dream? Industry commentators say yes, and no. Although interactive television is expanding advertising possibilities in ways once only dreamed of, it comes at a price.

Because the new technology will also allow viewers to fast-forward through ad-breaks, rendering broadcast television advertising potentially useless.

Figures from Britain show that viewers are exercising that prerogative.

Close to six million people have access to digital television in Britain, and personal digital recorders (PDRs) - which can store up to 60 hours of digital data and allow viewers near real-time control over what is played back - are integral to the technology.

A survey showed that 88 per cent of people with PDRs skip the advertising.

It is estimated that in 10 years, 90 million PDRs will be in use in the United States alone.

But it's not just a matter of skipping ad breaks. The Henley Centre in Britain found that many viewers were using ad breaks to e-mail their friends, also through their interactive TVs.

If this wasn't bad enough for the advertising fraternity, surveys also found that only around 3 per cent of the viewers clicked on to interactive ads - better than the average 0.5 per cent click-through rate on internet banner ads, but still pretty low.

Proponents of interactive television point out that it will deliver fewer, but better quality customers. Because the technology can also store information about the viewer, it may ultimately be possible to customise advertising to individual households, much like any other direct marketing channel.

It has been found that of the 3 per cent of viewers clicking through to receive more information on a product or service, more than 40 per cent will "act" on the offer, requesting more information, sending away for details, and in some cases, purchasing the goods/services advertised.

This information alone has industry figures forecasting that the total interactive TV market will be worth $US20 billion by 2004, with more than half of that coming from advertising revenue.

Dr Duane Varan, who was brought by the Communications Agencies Association to talk to New Zealand advertisers last week, says that the new medium will mean the end of the current mass-broadcasted 2-minute ad break in favour of the targeted message. Now is the last hurrah for mass media ads that do nothing other than establish "Coke is it" or "Butter butters better" and hammer home a message through sheer repetition, he says.

Dr Varan, who is head of the digital television advertising research group at Murdoch University in Western Australia, says advertisers will have to think smarter and devise "offers viewers can't refuse" in order to cut through the increasing media clutter.

In other words, consumers will increasing hold the power.

"Advertisers must recognise this and create ads which are relevant to viewers and add value. They must see a reason to click through to your offer, to view the creative. It's a new paradigm for advertisers, and they have to adopt it or be left behind."

Britain - which has more digitally equipped homes than any other country - has been offering interactive advertising to viewers since March last year.

The ads are still heavily restricted by technology, with technicians dictating creative parameters, says Dr Varan.

The fear causing a system crash on viewers' set-top boxes is so great that advertisers must pay a £1 million bond if they want to go beyond current technological boundaries, he says.

But in France, interactive advertising is government regulated and advertisers pay in both time and money to create the most technological advanced advertising possible.

At present in Britain, in a typical television ad break of, say, five ads, the interactive ad will be the last one played, with no audio so as not to drown out the programme when it begins again.

Still, Dr Varan's examples of interactive ads from Britain hint at the staggering possibilities of the fledgling medium.

By far the most popular digital service through interactive television is the Electronic Programme Guide (EPG) which people use to make decisions on what to watch.

A continuous "carousel' of ads runs in the dead space on the TV guide page, making it prime advertising real estate.

Travel is the most popular use for interactivity. More than 49 per cent of people in Britain have indicated they would book their travel on TV, and British Airways has been quick to jump on the possibilities of the medium.

When a BA ad is shown, viewers can click through to a world map. They can then click on any country and go through to a introductory video on the country (taken from the BA library of country promos shown inflight), after which they can request further information and arrange for a BA customer service representative to call them.

Dr Varan says the campaign is "very, very smart" leading to 48 per cent of viewers of the ad clicking through, 61 per cent of those seeing the movie, and 59 per cent of those requesting information.

Another example of a good interactive TV product is pizza.

The night Titanic was released on video in Britain, Dr Varan says, pizza delivery shot up 27 per cent, pointing to an "inherent relationship between eating pizza and watching television."

Pizza chain Dominos now earns 5 per cent of its total turnover through interactive television ordering, and has boosted its research into its client base through the data-gathering possibilities of the medium.

Dr Varan has suggested to Dominos that it also offer individual tracking messages such as "pizza baking" or "delivery boy lost - please call us" to reassure anxious customers.

More advanced advertisements are also being tested.

The Royal Air Force is working on an ad that is both a Playstation-like game and a recruitment drive. Shampoo maker Pantene puts viewers though a 10-page questionnaire to diagnose their hair type and send out appropriate free samples.

UK Woolworths - similar to New Zealand's K-Mart chain - now gets 5000 orders a week from a deliberately limited range of product it offers over interactive television.

But problems do exist with the British model, says Dr Varan. "It's a chaotic financial model - like the wild wild west at the moment, with everyone charging what they like and disputes between providers and advertisers."

And figures that show enthusiastic support for interactive advertising is also viewed suspiciously by some commentators.

In New Zealand, Cooper's Beach-based technology commentator Bob Cooper, who publishes Coop's Technology Digest, says he thinks novelty is driving all early users.

"When you are sixteen and have your first experience with sex, you simply cannot get enough. When you are 60, you become far more selective.

"Interactive television is sixteen."

He says interactive TV will be the "wild wild west" until it has had so many crashes that people will tire of the novelty and demand reliability and substance.

"There is virtually no evidence yet of how consumers are using or will use interactive television. Very few survey techniques yet have accuracy suitable for advertising agency use. At this stage anyone who claims to know what consumers do with interactive TV is marching to an agenda of self delusion."

Dr Varan agrees. "There is almost no research on interactive TV viewing, and we don't completely understand its implications for advertising just yet. But we do know an interactive environment will create high expectations on the part of consumers, so advertisers increasingly will have to both build and manage consumer expectations.

"I believe you will see a huge gap grow up between those agencies that can deliver in the new environment, and those that can't."

* Next week: Part II: The possibilities for New Zealand