While the "holy grail" of advertising, addressable television, may be years off from becoming mainstream, it seems 2011 is going to be the year of the interactive ad.
That was the consensus among panelists of "Driving Next-Gen TV As to Critical Mass: How Big and How Soon?," part of the Advanced Advertising 3.0 event presented by B&C and Multichannel News Tuesday.
While addressable ads may be the ultimate goal, interactive ads are the easier play for the industry right now. "One doesn't replace the other," said Andrew Ward, group vice president, Spotlight integrated media sales, Comcast Spotlight. "But from a technology standpoint, interactivity is significantly lower-hanging fruit."
Propping up interactivity, Kathy Timko, COO of Canoe Ventures, pointed to early data that shows brand recall and purchase intent increase 40% through interactive ads, even if the user doesn't click on anything. "Not that addressable isn't the Holy Grail, but interactivity is here, we should see if we can leverage that to an additional $10 billion," she said.
And the benefit is not just for marketers but for programmers, too, one panelist added. "A big focus for us is to do everything we can to bring programmers into the fold," Peter Low, president and CEO, Ensequence. "Interactive is not just an advertising play, it's a programming play."
But don't expect interactive ads to become the norm on broadcast television anytime soon. Implementing interactivity on broadcast is more difficult than on cable because of the need integrate to two different systems, those of both national and local broadcast, pointed out Joan Gillman, EVP/president of media sales, Time Warner Cable. She said developing advanced advertising is a "crawl, walk, run" process.
Addressable advertising, while it offers the promise of a ROI that targets actual people, not just the shows they watch, brings its own set of unique challenges to implementation.
"It's an intensely complex problem," said Aaron McNally, manager, TV ads, Google. "When you start targeting spots, you're talking about billions of spots that need to be managed by a system," which means a lot of data and a lot of advertisers. "It's pretty astounding," he added.
And while every year seems to be touted as the year for change in the advertising industry, all the panelists seemed convinced that 2011 would be a year of momentum and change.
"The future of TV advertising could become clear in the next year or so," said Jason Malamud, GM, FiOS advertising, Verizon Communications, as cable MSOs aggressively pursue interactivity-enhanced ads and satellite providers go after addressability "because it suits their business needs today."