New York-As programmers and vendors stoked the flames of a red-hot interactive-advertising future during the Myers Forum for Interactive Television Development here last week, ad-agency buyers delivered a splash of cold reality.
According to The Myers Group LLC CEO Jack Myers, interactive-TV revenues will total $1.68 billion in 2001, including $770 million from subscriptions (including video-on-demand), $560 million from commerce and $350 million from advertising. By 2005, he said, those numbers should soar, respectively, to $20.7 billion, $5.1 billion, $8.2 billion and $7.4 billion.
Those are huge numbers. But Jean Pool, operations president of WPP Group plc's MindShare North America, cautioned against overstating interactive TV's promise. "We don't want Orlando again," she said, referring to Time Warner Cable's costly Full Service Network experiment in Orlando, Fla.
Some marketers, like Ford Motor Co. and IBM Corp., better lend themselves to interactive TV than others, she said. Though many accounts are participating in various interactive-TV tests, household penetration and test results have been very limited to date.
The amount of money spent on interactive TV by advertisers is also minimal, agreed executive vice president and managing director Linda Thomas-Brooks of General Motors Corp.'s GM Mediaworks & Cyberworks unit. But "we're doing it to get some learning out of it," she said.
Rather than being pitched by vendors, GM prefers to pursue those interactive-TV services it deems meritorious because "many sellers don't yet have a clear idea what we need." With 49 different GM auto models, "It's impossible to educate everybody about our brands."
Similarly, Pool said, "I don't necessarily think clients have time" to see scores of vendors and others plugging interactive ventures.
DDB Worldwide Communications Group Inc. worldwide media director Page Thompson also said his agency's clients-primarily packaged-goods accounts-are mainly in the test stage with interactive TV via companies like Wink Communications Inc.
A few ad agencies "have their heads in the sand" and want to keep producing conventional 30-second spots, but since the interactive trend is client-driven, he said, "I think you're going to see agencies respond."
Still other changes are looming for TV advertisers and media, with product placement becoming one way to get around being zapped by such devices as personal-video-recording devices by TiVo Inc. and ReplayTV Inc.
ZDTV vice president and editorial director Jim Louderback-who co-moderated sessions with Myers during the two-day conference-said ZDTV rejects product placements.
But several panelists suggested the network might eventually have to change that stance. There already are "virtual product placements" being inserted by computer into syndicated programs, Thompson pointed out.
The panel was asked about advertising on cellular phones and various portable devices. That may be the equivalent of "spam" unless it touts products that appeal to certain consumers, Massive Media president of media and electronic commerce Michael Kassan said.
Wink CEO Maggie Wilderotter-claiming that her company's technology is in 300,000 cable homes and en route to 3 million by year-end-said 75 percent of viewers interact via Wink monthly. Nearly 30 percent interact three or four times per week. And 42 percent of those who interact take the advertised offer, while 20 percent buy the product.
One attendee wondered why neither Wink nor Time Warner Cable in Manhattan had promoted Wink's availability to viewers or educated them on using it. The subscribers-70 percent of whom are already interacting-are figuring it out themselves, Wilderotter replied.
"Consumers didn't know they wanted their [MTV: Music Television] until they saw it," ICTV Inc. CEO Bob Clasen said, indicating that the same is true for interactive TV. "Convergence is still at that age where it needs its diapers changed, and often."