Green button advertising approaching launch

Channel 4 have announced that they are going to be marketing upcoming shows through the green button service on Sky. Sky’s own forays into green button – originally planned to launch last summer – are imminent.

The green button service is an interactive feature whereby viewers can bookmark content as they view (in real time or recorded). An advert that is interacted with – along with associated content (extended cuts, behind the scenes etc) – is downloaded onto the DTR hard-drive to be watched at a later date. It is effectively advertising on demand. This differs from red button services, which immediately transport you from the content you are watching to the interactive area.

Will it work? The idea is initially counter-intuitive. People choosing to watch more advertising? But we know from the viral/spreadable media successes that viewers can choose to watch adverts.

That is online, where people can remix and repurpose content. Will viewers interact to the same degree on TV? An article in the New York Times says that the market isn’t yet ready for internet TV due to cost, reliability and questionable demand.

But interactive services aren’t the same as having full internet capability, and viewers do seem willing to experiment. Figures from Sky show that more than 93% of digital satellite households pressed red to interact with their TV in 2007 – 16% interacting with adverts.

Although the most viewed interactive advert in 2007 was Cadbury’s Gorilla the campaigns using red button tend to be response-led, with relative success measured by requests for vouchers or for further information. Sky said that 40% of its interactive campaigns are from car manufacturers, who are able to measure sales conversion from the ads.

The appeal of green button appears less about direct response and more about branding. It is essentially viewing advertising as content consumed for entertainment. This is not going to be suitable for all brands or categories, but offers an interesting challenge to companies seeking to broaden their involvement in content marketing and storytelling.

Not only will advertisers have to convince viewers that their content is worth watching and interacting with, but with an on-demand service they also have to move from impulsive to considered consumption. I may see a potentially interesting ad and bookmark it, but will I choose to go back and watch it later?

Downloading content also contrasts with the current trend of streaming. Whether it is putting everything in the cloud, or Spotify emerging as a potential challenger to iTunes’ dominance, owning is partially being supplanted by streaming/renting. Unless I can actively edit or mash-up an advert, is there any benefit to having it stored on my hard drive?

Green button appears to be in direct competition with the Youtubes and microsites that facilitate streaming. Youtube already offers advertising-on-demand, with people able to interact with, share and comment upon advertising. The environment may not be suitable for all brands, but it is cheap. Microsites and branded areas aren’t’ so cheap, but the entire experience can be micromanaged. Green button services are going to have to find a USP that differentiates them and justifies a price premium.

That function may be targeting. I’ve already covered targeted advertising in detail but demographic information could be the pull. If Sky are able to integrate their Skyview panel information with green button, advertisers will know exactly who is viewing and interacting with their content. And that information is valuable.

It remains to be seen whether green button services can make an impact in the period before television and the internet fully integrate, but I anticipate some innovative case studies emerging in the field over the next couple of years.

And not just those looking to prove their environmentally friendly credentials by using “green” advertising.

sk

Image credit: http://www.flickr.com/photos/barbietron/

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Could targeted ads work on TV?

I’ve been exploring the concept of targeted advertising on television. Loosely defined, it is the ability to purchase advertising space against a diverse array of groups that go beyond the traditional trading audiences.

This post accumulates the background information I’ve collected on the topic and speculation (mostly mine) on how theory may become reality.

Because it is such early days, I’d love to hear the thoughts of people (media side, client side, planners, buyers, researchers, interested parties) on the subject. Do you think it will work? What would you like to see and what would you like to avoid?

(Disclaimer: I have no involvement in targeted advertising – this is purely background research. This is preliminary work and any errors are fully attributable to myself).

1. Background

Traditionally, trading television advertising is a complicated beast, but Thinkbox have a gentle overview of the topic here. Essentially, there are several criteria that advertising can be bought against – channel, time of day, region (for analogue channels) and so on. Specific trading audiences can also be bought but unlike other criteria they can only be estimated.

To use a simple example, I may want to purchase 300 ratings against Women on ITV1. My advertising would be placed in shows that would be expected to deliver the required number of female viewers. However, only when BARB viewing figures become available do I know how many ratings were delivered. If ITV1 delivered more than 300 ratings that I am in debit; if they undelivered then I am in credit. The difference is carried over to the next advertising campaign I run.

However, as we all know, TV is changing. On-demand and IPTV, to give two examples, are changing the concept of what TV means.

The concept of targeted advertising emanates from this seachange. As it is still (largely) a concept, definitions are loose and the vague. Targets could theoretically be grouped according to demographics, lifestyle, behaviour, attitudes or a combination thereof. While an internet connection is the likeliest means of delivery, it is not the only option.

Whoever delivers effectively targeted advertising first will have a tremendous competitive advantage. The future is up for grabs.

2. The Players

In the UK, the platform providers are best positioned to introduce targeted advertising

• Sky have said that they plan to introduce targeted advertising by 2011 by storing them on the Sky+ harddrive and inserting them into programming remotely
  
• Virgin have trialled targeted advertising, though at programmes rather than specific audiences
• “Project Canvas” is in development, with BT saying that they can use broadband user information to deliver targeted advertising
• Freeview+ and BT Vision have been quiet (though they are involved in Project Canvas), as have Tiscali TV (which may be looking for a new buyer now Sky are reconsidering)
• Inuk (closed IPTV over university campuses) has trialled addressable advertising on Channel 4

In the US, Project Canoe is looking to develop consistent metrics which in theory could then lead onto targeted advertising

It is also theoretically possible for non-platform providers to offer targeted advertising. These could include

• TV manufacturers – at the recent CES there was a lot of chatter on upcoming web-enabled televisions, while Sony BRAVIA already gives access to sites such as Amazon, Youtube and Daily Motion (ad free, I think)
• Google – Google TV currently only sits on one satellite carrier, but it could theoretically expand
• Phorm – still involved in targeted advertising. Their technology could be used across multiple platforms

3. Strengths and weaknesses of targeted advertising

With the concept still fluid, it is difficult to come up with specific answers but broadly speaking: (NB: Several of these came from a Mediaweek piece by Barry Llewellyn of Packet Vision)

Strengths may include

• Ability to target a more tightly defined audience – less wastage
• Greater relevance for viewers
• If ads are interactive, there will be greater accountability for direct response
• Frequency of exposure can be capped
• Advertising watersheds could be removed in adult-only homes (e.g. alcohol advertising in the afternoons)
• May be more affordable for niche advertisers with small target audiences
• Greater flexibility in pricing options – pay by impressions or acquisitions?

Weaknesses may include

• The whole concept will succeed or fail on the quality of the information captured
• Different platforms offering different options could hugely overcomplicate matters; can a consensus model emerge?
• The current pricing model will be completely destroyed; with a near infinite number of targets a new system, such as Google style keyword auction bids, will need to be introduced and accepted
• Similarly, how will total advertising audiences be audited? Everyone could be seeing different adverts around the same programmes. BARB would also need to be overhauled
• No-compete clauses can severely inhibit the ability to target e.g. a beer brand may pay a premium to ensure it is the only beer brand in the spots they have identified as being key
• Unpopular targets may get the same few ads on continual rotation e.g. will 65+ C2DE spinsters only get ads from the COI?
• Serendipity of appealing to people outside of the perceived core audience is lost – do targeted ads have the same attraction to brand-based advertisers as direct response?

4. Potential methodologies

Largely speculation on my part, but potential ways to target ads include

• Geographic/geodemographic information – the most basic targeting option. Homes can be targeted geographically through IP address or MOSAIC/ACORN postcode information. Geo targeting may only be attractive to local advertisers, but these could make up a long tail of demand. Alas, these methods are far from flawless. I’m a male 16-34 ABC1 (highly desirable, if I do say so myself) yet live on a council estate – would I ever see Leffe, Audi or Playstation 3 adverts?

• Registration data – when homes purchase a new TV or set top box, they could be asked to register not only demographic information but also lifestyle/behavioural information (additional information would need to be opt-in). This gives a richer understanding of viewers beyond demographic profile, but there will be ambiguities over individual and household information and usage, and the data needs to be regularly refreshed in order to be useable (for instance, my cat may die and I may get a dog instead)

• Return path behaviour – Interests can be inferred from the types of programmes that are watched, or the types of website that are visited. For instance, if I watch a lot of DIY shows, an ad for Ikea may be suitable. This is achievable but it is an art rather than a science. What if it is my girlfriend watching the DIY shows, not me. I could get all the DIY ads during football, and she wouldn’t get any during Hollyoaks. This type of targeting can be quite transparent and with an uncanny valley, is the method most likely to irritate.

• Panel information – whether a panel like Skyview or an extension of BARB, a sample of viewers can be recruited, with advertising targeted around their behaviour. This could be extrapolated to all viewers through programme audience profiles or registration information. However, this would only effectively be targeting a small proportion of viewers, with the majority guesstimated. With around 35,000 Skyview homes representing over 4m households with Sky+, the level of accuracy may not be high enough.

• Opt in system – give people the choice to submit information – either through an in-depth registration or regular surveys. By communicating the benefits, people may actively choose to receive targeted ads, creating value for everyone. This could be achievable, though the proportion of those opting in may be too small to be useful. With an opt-in, several additional steps could be taken to ensure accuracy e.g. a BARB style remote control (each viewer needs to “sign in” by pressing a button) could be introduced so advertisers know exactly which members of the household are watching.

• Social profiles – Bringing social networking to TV – such as this BBC/Microsoft prototype – offer a lot of information that could be harvested. People like to communicate their favourites, and this could be utilised. And with users logged in to their profiles, advertisers will be sure of at least one viewer in the room. This could work – Joost is currently the number one contributor to Facebook Connect – but again, it would only be a limited dataset and a lack of take-up may prohibit effectiveness

5. Implementation

We should be seeing several prototypes and trials following in the wake of the Inuk experiment. Due to the difficulties of implementing targeted advertising within live broadcast, I believe targeted ads will initially concentrate on on-demand and interactive content (whether red button or the electronic programming guide).

There appears to be a first-mover advantage, and so the stakes are high. Virgin would seem the best placed to lead the way – the internet is already connected to the box and with subscription fees they are partially shielded from any effects to advertising revenues – but I wouldn’t rule out any of the other players leading the charge.

Indeed, the first implementation may not even be within advertising. What if I could let Sky know which sports I like and dislike, and then get a customised news ticker on Sky Sports News? I’d certainly opt into that.

6. Further thoughts

This is an early stage outline of how targeted ads appear from my perspective. I’m really keen to hear other people’s views on the subject. Do you think targeted ads will take off? What would you like to see? What problems do you envisage?

Any feedback would be greatly appreciated

sk

Image credits: http://www.flickr.com/photos/pbo31/ and http://www.flickr.com/photos/melilab/