Interactive TV campaigns

This article is mainly intended for students looking to understand the importance of interactive TV (iTV) in the UK. For practicing marketing professionals this is a niche area – at the start of 2005, according to Skymedia, there had been just 610 interactive campaigns on Sky in the UK delivered across the main commercial channels such as ITV, C4, Five and Sky. But usage is increasing, with around 100 red button campaigns delivered during 2005, mainly for car, finance and travel companies.

But perhaps interactive TV advertising should be of wider interest since this is where a lot of the innovation in digital media is happening. With higher bandwidth on the web, the execution of options available through interactive TV advertising such as simple IR, Mini-DAL and DAL act as a model for what it possible through Internet advertising.

In this short note on marketing using digital TV l hope to show how important or unimportant it is and look at some of the other evolving options for digital TV which were introduced in 2005 and we are likely to see more of in 2006.

How many people can be reached by interactive TV campaigns?

As you might expect, in terms of reach, digital TV is at least as important as the web and is showing signs of becoming more important.

MORI's Technology Tracker is a useful place to look at top level trends in consumption of digital media. If you visit www.mori.com/technology/techtracker.shtml , you will see that digital TV has grown from its introduction in 1999 to the point where it now reaches 64% of the UK population in December 2005. This actually exceeds the Internet by a small amount. Of course with the big switch to digital TV in the UK with analogue systems starting switched off from 2008, digital TV will become much more popular than the Internet. Most non-Internet users say they are not interested in it – if they were, they would be using it already.

Adoption of the Internet also varies dramatically by social group while digital TV is more similar between groups. Digital TV exceeds Internet use in the C2 DE groups as shown in the Table below. If you are trying to reach these target markets, the Internet isn’t the best way to do it.

Which types of digital platforms are being used?

Ofcom, the Office of Communications, is the best place to find out the breakdown (http://www.ofcom.org.uk/research/tv/reports/dtv/). It reports figures consistent with those of MORI; as at 30 September 2005 Ofcom estimated that 65.9% of UK households, received digital TV services. It shows the breakdown as follows in order of popularity:

1. Satellite, BSkyB UK – 7,472,000 households
2. Digital Terrestrial Television (DTT) has become very popular in a short time – in a single quarter in 2005, there were over one million sales of Freeview set top boxes. The number of households with Freeview (Digital Terrestrial Television) was 5,775,000 in mid 2005. Likely to overtake Sky in 2006
3. Cable Television – 3.3 million households have NTL and Telewest iTV services.

It is important to note in terms of reach that only true interactive ads with a response mechanism are available on Sky currently, as we will see.

Engagement with digital TV services

So the penetration of digital TV is high and getting higher, but that means nothing if people don’t click on those red button ads, so what’s the level of engagement with interactive services?

One indication is available from research by Michael Svennevig of the Research Centre For Future Communications at the Institute of Communications study in Leeds. Svennevig (2004) reviewed the relative use of the Internet and interactive TV for a range of activities. It showed that for consumers with access to both interactive TV and the web, activities performed on the web generally greatly exceeded the same activity on the TV. For example, for activities like, e-mail, search, buying products across a range of categories and servicing bank accounts, the web was at least 10 times more popular. However, there were some exceptions where TV was more popular which hint at how interactive TV will be used in the future as part of online campaigns. These activities more naturally fitted with using the TV, they included playing online games, finding background about TV programmes and voting in TV shows.

How many people can be reached through red button ads?

For potential advertisers though, the real question is how many of us press those red buttons and how many then enter our details through our handsets in response to the offer.

To understand response rates, we have to think about the different ‘return paths’ offered by the different iTV platforms above. With web marketing we take return paths for granted – you click on an ad and are taken through to a microsite where you respond as required. But return paths are one of the biggest challenges for interactive TV (along with limited bandwidth, clunky interactions, the more limited form of handsets for interaction and the sharing of the TV between a family!).

The return paths available are as follows:

1. Sky Digital – Return path available if set-top box connected to phone (this used to be mandatory for Sky installations, but isn’t any longer). The SkyDigital viewer is charged for a local or premium rate phone call which is likely to restrict adoptions

2. Freeview – Full return path not available. Viewers can respond to interactive ads by phoning or texting in their responses. They can, however, interact with interactive content

3. Cable. Although cable has the potential of an always-on return path (without requiring a phone connection), this potential has not been fully utilised to date

So you can see that in terms of response to data capture, interactive ads are only really a method of reaching the 7-8 million households that use Sky.

Red button response rate has proved difficult to measure in the past and this lack of accountability has not helped the medium. However, Zip TV ran an interesting research programme in 2005 which looked at response rates on a longer time scale (assessed through phone interviews with respondents).

The research showed that in the past 12 months (2004-5), interaction with TV adverts in the UK was 17%* (2.6m) annually of Sky Digital adults. But this still means that there is an estimated 12.7 million* strong Sky Digital audience who have bypassed IA (interactive advertising) in the last 12 months. So who are these viewers and how can broadcasters, advertisers and agencies tap into this potentially lucrative segment? On an individual campaign level, the figures are less impressive with press-red response rates typically in low single figures (1-3%). This is measured through automated dial-ups after the red button was pressed (not all users will authorise this due to cost or privacy reasons). This data tallys with that of a tracking study completed by iBurbia which showed that only 40% of respondents claimed to have seen an interactive TV ad with 25% of total having pressed red. iBurbia (http://www.iburbia.co.uk/) puts this relative failure of interactive TV ads down to four factors: continued use of interactivity as a bolt-on extra to video ads that weren't designed to support it; a confusion between the role of the red button during programming and during ad breaks; poor early experiences of interactivity among early adopters; and the gradual ageing of the installed base of Sky set-top boxes, which makes the current experience patchy.

Their Passive2Active study (http://www.passive2active.tv/) identified different types of interactors within the Sky TV base. According to the press releases accompanying the launch of the research, Emma Seymour, the Research Director at Zip Television explains: “We divided viewers into five sub groups to identify their demographics, attitudes and preferred programme genres. There was a broad spectrum of interactor types, ranging from out-and-out rejectors (‘Bitter Ad Haters’), through ‘Unengaged Passives’, to strong interactor acceptors (‘Dedicated Interacters’). But it was ‘Unimpressed Pragmatists’ and ‘Apprehensive Stargazers’ that represented the greatest potential to press red - given the right targeting and messaging. ”

Of the viewers not currently interacting: 30% the ‘Unimpressed Pragmatists’ are not pressing the red button because there are too few incentives. A further 22%, referred to as ‘Apprehensive Stargazers’, are too daunted by the prospect to interact with an ad. With increased familiarity and use of the red-button within programmes (which tends to be more popular) this suggests future potential for red-button advertising as people get more familiar with it.

Of course, actual response rates, as for any other media depend on the targeting, creative format of the call-to-action and the offer. The IDS site (see further reading) has detailed practical guidelines on effective calls-to-action and offers and response rates. As might be expected there is a wide variation in response rates with prize draws, brochure requests and samples often receiving ten times higher response rates than response that require more commitment such as donation, test drives or callback.

Options for marketing using interactive TV campaigns

The traditional model for interactive TV adverting is to use the “Red button” on TV remote control to allow viewers to interact with content specially developed for red-button. Interaction is available either while still watching their programme (more typical for direct response) or in a separate, bespoke site (more typical for branding) and they then return to programme when finished interacting.

The main options are described by Sky Media as follows

1. Direct Response Application – usually known as "Impulse Response (IR)"

This is the entry-level option which is mainly used to add a direct response element to a TV campaign. It can be used by both brand and DRTV advertisers. This is the simplest form of interactive advertising and the Sky service has these elements:

• Viewer stays with broadcast, IR overlays TV ad
• Immediate data entry
• Maximum of 9 immediate data entry fields
• Access negotiated independently with each broadcaster
• Cost around £5,200 for 28 days. There is an additional cost for data capture at around £0.10 per response).

2. Branding Site with a direct response element – usually known as "Mini-DAL (dedicated advertiser location)".

With this option, when the red button is pressed, the viewer is direct to a bespoke microsite. Benefits of this include the more detailed information and more opportunity to interact with the brand. Sky media (http://www.sky-skymedia.com/) offers these options:

• Templated solution – 3 types: Qtr screen with bespoke video, static full screen with bespoke audio, TV qtr screen
• Multiple screens in a site (up to 3) allows for detailed, additional information
• Offers branding and response
• Permanent listing on Sky Active during campaign
• Accessible from Sky,ITV,C4,C5 and IDS airtime (See http://www.idigitalsales.co.uk/interactiveadvertising/)
• Costs around £14,000 – £39,500 for 28 days

3. Bespoke Branding Site – usually known as "Dedicated Advertiser Location"(DAL)

This is the most expensive option intended to provide the advertiser with an “immersive branded environment”. This will enable virtually any form of interaction from the standard bespoke video to more interactive facilities such as playing games or listening to music and of course, direct response. Sky Media summarise the DAL facilities as follows:

• High end solution
• Offers branding and response
• Viewer leaves TV broadcast
• Totally bespoke design – a Virtual "advertiser channel"
• Sold in megabits of bandwidth
• Permanent listing on Sky Active during campaign
• Accessible from Sky,ITV,C4,C5 and IDS airtime
• Costs start around £40,000 - £65,000 for 28 days

Marketing applications of interactive TV ads

Direct response is the most obvious reason for running interactive ad campaigns. This has been used for these applications according to the IDS study of the 600 IA campaigns ran up until 2005:

• Further information – Mecca Bingo invited viewers to ‘Press Red for a free information pack’ and many travel and tourism destinations have solicited brochure requests through this mechanism
• Sampling – Brands such as Finish Dishwasher tablets, Coty Rimmel lipsticks, Wilkinson Sword Razors and Total TV Guide have used the sample request format. Results from IDS have so far have indicated that campaigns offering free samples have produced better responses
• Donation – Charities such as the Red Cross, Cancer Research UK, the National Accident Helpline and the NSPCC have used this format. Regular donations can be achieved through entering their account details
• Request a call-back – Dial 4 a Loan and Yes Car Credit have used this approach
• Request a test-drive – Car brands such as Nissan Almera, Lexus and Renault have used this approach
• Enter a competition – IDS notes that some of the highest response rates to date have been achieved with competition offers from Rimmel, Tesco and Walt Disney
• Play a sponsored game – Used by KitKat for the ‘Take a break’ campaign
• Sponsorship of broadcast programmes – reality TV and pop programmes have successfully used sponsorship combined with Mini-DALS and, of course SMS voting

When looking at the benefits of interactive TV ads, there is increasing evidence of the benefits of engaging a consumer with the brand. One of the fundamental benefits of interactive TV ads is that they extend the brand message beyond the maximum 30 seconds of linear TV ads.

Case example – Volvo ‘Mystery of Dalaro’ campaign

This is one of the best known interactive TV ad campaigns which supported the launch of the Volvo S40, shot in the style of a documentary purporting to be a real account of the Swedish village Dalaro where 32 people all bought a new Volvo S40 on the same day.

Revolution Magazine (March 19, 2004) (http://www.revolutionmagazine.com/) has revealed these details about the campaign. Spike Jonze, the director of the films 'Being John Malkovich' and 'Adaptation' as well as the Beastie Boys video 'Sabotage', made the documentary using real residents of Dalaro and not actors.

This campaign shows how offline ad executions naturally drive visitors online. During the campaign, visits to the Volvo UK website doubled and 435,000 digital viewers of the ad selected the red button option to view the documentary via interactive TV.

Those pressing red on iTV saw a longer eight minute version of the documentary, made by director Spike Jonze, featuring interviews with residents of Dalaro talking about the spooky phenomenon and had the opportunity to download brochures, thus interacting much more closely with the brand than was possible before the advent of iTV. The documentary was also available from the website which received 96,000 visits with 64% accessing the video and several thousand requesting a brochure.

Other details about results of the campaign from IDS

• 11% of viewers, who were aware the ad was interactive, pressed red
• People spent on average 6 minutes in the application
• It cost 5p for every minute someone spent in the DAL
• Spontaneous awareness amongst people who interacted was higher than those who did not (58% vs. 4%)
• Brand perception of the Volvo S40 improved immensely amongst interactors
• Those who interacted were 10 times more likely to buy a Volvo S40 than those who saw the ad but didn’t interact

Case example – Rimmel drives sampling through iTV

Think Box gives the example of Rimmel's iTV campaigns for its Exaggerate Hydra Colour Lipstick and its Double Act Foundation. This was an early (2001/2) mini-DAL campaign which was accessible via a 20-second linear commercial running on Sky and IDS digital satellite channels, or via banners in the Sky Active menu. Target channels included Sky One and Sky Movies. The brand's first red-button push attracted 52,000 requests for samples and a response rate of 3.2%. This prompted a second campaign which performed even better, with more than 60,000 sample requests and a 27% improvement in the cost per response. The cost per sample acquisition was £1.87, less than any other sampling mechanism previously used by Rimmel. This campaign not only collected names and addresses for samples but also opt-in permissions, mobile phone numbers for future SMS promotions, and other personal information. Many viewers were happy to give their permission with 38,000 opting-in to receive further marketing communications, and two-thirds giving their mobile number. Research through Dunn Humby, which matched interactors with Tesco Clubcard data, found that those who had pressed red spent 18% more on Rimmel products than those who didn't.

Case example – VEET

This 2005 ZipTV campaign asked: ‘Are you still a Wax Virgin Campaign?’ challenging the consumer to trial the product. The detailed content on the Mini-DAL was intended to reassure about the barriers to waxing by changing preconceptions that waxing is a painful, messy process. It is, in fact, quick, easy and not as painful as people think. The advert encouraged the viewer to press the red button by asking the question: ‘Are you still a Wax Virgin? Press red to enter the Veet quiz and you could try it for free.’ 10,000 samples of Veet Wax Strips were sent to interactors who took the Veet Quiz and entered their address details using their remote. The question to ask: would a higher or more cost-effective volume in the target audience be achieved through driving the viewers to a bespoke website? Across all media, Veet intended to distribute 200,000 samples.

Case example – Press Red responses

Press Red give some other examples which indicate higher response levels:

• Grolsch aimed for 15,000 responses (order a branded pint glass) over 4 weeks, but actually generated 28,000 in three days
• Seat's December 2004 campaign generated an average of 3,000 leads a week, which was some 50% more than their existing direct response marketing (combined brochure requests, test drives and prize draw)
• Skoda’s first campaign generated 15,000 brochure requests, said to be an historic direct response figure for them.

Recent interactive advertising innovations

From the 1 November 2005, New Media Age (27.10.05) reported that Sky is reducing the costs for responses to interactive campaigns. For example, IDS is now only charging £0.10 per response for any interactive TV campaign. This compares to an average of £0.50 per response collected previously which was typically estimated to be about 10% of the total cost of a red button campaign. New Media Age believes that this move could lead to more non-finance/travel/car brand companies using interactive TV advertising.

In December 2005, New Media Age reported that Nokia was going to launch an interactive TV campaign for its N70 camera phone that didn’t rely on linear TV time. Instead it will develop a presence on the Sky Active entertainment channel (not linear TV, but an interactive channel available to Sky subscribers). The move is intended to avoid the cost of linear TV ads and is based on a reported 20% of red button ad response originating from Sky Active. Nokia won’t only rely on browsers of Sky active - print ads in Sky’s subscriber magazine will be used to drive visitors to the site (and the web). Of course the benefit of this approach is that the campaign content is available 24 X 7 as well as during each 30 second spot, so the advertisers are making more use of content produced.

In January 2006, New Media Age reported that programme sponsors would be offered red button and mobile interactivity (text bounceback) to engage viewers between ad break. So watch out for more red buttons!

Next month's article

I hope you enjoyed the look into the world of interactive TV ads, next month its back to something more practical and of more interest to all marketers. I will show how to improve response to online and traditional marketing by enhancing web landing pages and microsites. Today’s most effective online campaigns don’t direct visitors to the home page, but deep-link to specific products or offers. The article will show the best way to integrate landing pages into an existing site and how to devise the creative to maximise response.

References and Further reading

Svennivig, M. (2004) The interactive viewer:Reality or Myth. Interactive Marketing. Vol 6. Mo 2, p151-64.

Digital UK (http://www.digitaluk.co.uk/) Details of UK switchover.

IDS (Interactive Digital Sales) (http://www.idigitalsales.co.uk/interactiveadvertising) – has a good explanation of services available through its UKTV network of channels and more general research.

2005 interactive advertising survey from IDS: (http://www.idigitalsales.co.uk/interactiveadvertising/survey.cfm)

Interactive Advertising study:

http://www.idigitalsales.co.uk/content/lowdown/documents/IAApr05.pdf

New Media Age (http://www.nma.co.uk/) coverage of new approaches and campaign examples in digital TV and other media.

Passive2Active study (http://www.passive2active.tv/) research about interaction from Zip Television (http://www.ziptelevision.com/).

Press Red (http://www.pressred.tv/) one of the main creators of Red Button ads.

Sky Media (http://www.sky-skymedia.com/) Overview of red button approach and costs.

Thinkbox (http://www.thinkbox.tv/) is the television marketing body for all the UK commercial broadcasters and includes case studies of conventional and interactive TV ads.

Weapon 7 (http://www.weapon7.com/) Another specialist interactive TV ad house.

About the author

Dr Dave Chaffey is workshop leader for a range of one-day e-marketing training workshops from the CIM:

• E-mail Marketing (www.cim.co.uk/0766)
• Running Effective E-marketing Campaigns (www.cim.co.uk/0767)
• Improving Your Results from Digital Marketing (www.cim.co.uk/1138)
• Marketing Research Using the Internet (www.cim.co.uk/1135)

Go to http://www.cimtraining.com/ for course details and online booking.

Dave Chaffey is trainer and consultant for Marketing Insights Limited (http://www.marketing-insights.co.uk/). He is a prolific e-business author whose books include ‘Total E-mail Marketing’, ‘Internet marketing: Strategy, Implementation and Practice’ and E-business and E-commerce Management.

Read Dave Chaffey’s blog (http://www.davechaffey.com/) for E-marketing Essentials – the 5 “must-read” articles about online marketing from the hundreds Dave reads each month.