As the broadband business model evolves, advertising — its design, placement and the measure of its effectiveness — is coming into the spotlight. No matter what role ad-supported video-on-demand attains, commercial content will be critical to the interactive broadband agenda.
It's a step toward transactional TV.
That is why it's so dismaying to hear protective demands for cable advertising (vis-à-vis interactive satellite or interactive broadcast commercials) even before fundamental processes are put into place.
Yet such barriers are taking shape, despite the overriding awareness that Madison Avenue must be served by all media with broadband objectives.
Some of those target issues will be part of a two-day workshop July 8 to 9, run by the Digital Marketing and Advertising Group (www.DiMAGroup.com). This week's New York City event is a follow-up to a series of DiMA think tanks, including an invitation-only session (with an overflow crowd) during the National Show in Chicago last month.
As at previous workshops, DiMA addressed fundamental goals of broadband and interactive advertising — few of which are well understood, let alone in operation, even though these precepts are fundamental to broadband marketing.
The interactive advertising vision is based in part on the transactional marketing experiences of the Web. Revenue splits and lead-generation fees could become part of the broadband marketing mix.
These ingredients are just being resolved in Internet advertising — and not always smoothly — so their fate in the cable environment is sure to be volatile.
DiMA Group leaders shy away from calling their work "standards-setting," favoring instead the term "Interactive Advertising Guidelines."
Actual standards will — and should — be established by advertisers and their agencies, in much the same way that other print and electronic formats are agreed upon with media partners.
Agencies, especially those with bruises from Web advertising, will be formidable allies in the transactional transition. First, though, there's a great gap in awareness and understanding of how the broadband ad tools will be deployed and implemented.
Agencies and media companies that have been active in DiMA's efforts — including Cox Communications Inc., Discovery Networks U.S., Time Warner Cable, GoldPocket and Starcom MediaVest — recognize the need to set up mutually recognized processes to encourage broadband advertising on VOD, personal video recorder and other looming broadband platforms.
For example, some visionaries expect that "telescoping" and "ad banking" could become the yin and yang of long-form commercial messages in the VOD or digital video recorder process.
The former would allow a short, "standard" commercial (maybe just five or 10 seconds long, but possibly a more familiar 20- or 30-second spot) to trigger a viewer to "telescope" into a longer, more personalized or detailed commercial that is served on-demand.
The enhanced commercial could run any length and include a call to action plus an interactive ordering function. After the viewer has watched the commercial, he can pull back out of the message and return to regular linear program viewing.
Alternatively, "ad banking" allows a viewer who is interested in a long-form message to store the message for later review and action, rather than interrupting the program right away. A VOD server keeps track of such ad requests and delivers them at a more convenient time.
Such fundamental viewing changes are intended to make advertising more effective, which is why ad agencies are so revved up about the new opportunities.
Separately, there's a need to measure and interpret how customers will use the new resources. Research firm Frank Magid Associates, which is testing broadband interfaces on behalf of MSOs and technology providers, shared some of its work.
Like the DiMA presentation, Magid's invitation-only session ran under the banner of the Interactive TV Alliance, a nascent industry group that is trying to promote ITV ventures. (Disclosure: I hold advisory roles with DiMA Group and the ITV Alliance.)
Magid's studies involve attitude and awareness — including the challenge of figuring out how viewers will understand on-demand options that for now appear to be lost in the overload of marketing messages.
Indeed, the opportunities for broadband advertising are already being trampled in turf wars. Not only is the cable-vs.-satellite issue raging, but there are signals that the upstart ITV Alliance is nudging into territory that other industry groups would like to control.
For many reasons, advertiser organizations — such as the American Association of Advertising Agencies — should be in the best position to oversee the adoption of technical and response processes that serve its constituents.
Alliance building is vital. The battles are feudal and futile.
At this stage of development, they will crush the creative surge that could otherwise deliver broadband advertising's revenue bonanza.