Interactive TV Ad Revival Spells Opportunities for SPs

Jacqueline Corbelli, founder, chairman & CEO, BrightLine

Jacqueline Corbelli, founder, chairman & CEO, BrightLine

Challenge Is to Support Campaigns in Legacy as well as IP Environments

By Fred Dawson
February 10, 2014 – By all indications interactive TV advertising has finally gained solid traction with programmers and advertisers, bringing with it new incentives for video service providers to exploit technologies that allow them to extend advertisers’ reach into the legacy TV domain.

As previously reported, much of this activity has revolved around second-screen applications that open enhanced advertising options to connected-device users while they’re watching TV. However, as underscored by recent developments, second-screen has not been the slam dunk many proponents had anticipated, leaving a growing appetite among advertisers and agencies for broader reach as ever more money is poured into what the Interactive Advertising Bureau calls “content marketing,” which it defines as “the marketing technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined and understood target audience.”

Content marketing, including all types of media, not just video, consumed approximately 28 percent of all B2C marketing budgets in 2013, according to research cited by IAB and conducted by the Content Marketing Institute and MarketingProfs. The study, “2013 B2C Content Marketing Benchmarks, Budgets and Trends,” said 86 percent of B2C marketers are using content marketing, with video counted among the most widely used tactics along with social media, articles on company-owned websites and e-newsletters.

Of course, any content promoting brands beyond spot advertising could fall into this category in the video space, whether or not it is interactive. But the idea of engaging users to seek more information is pretty much intrinsic to most endeavors in this space, in contrast to old-style advertorials that used to consume the unused hours of third-tier TV channels.

The limitations of reliance on second-screen approaches to interactive TV advertising are much in evidence, starting with the fact that the percentage of consumers using connected devices to view content related to what they’re watching on TV remains around 20 percent. And there have been some much-publicized hiccups with second-screen ad strategies, including the demise of IntoNow, the app Yahoo bought three years ago and just closed 12 weeks after launch. Other approaches, such as Shazam’s iTV ad model and the GetGlue social commerce app, have been undergoing significant refinements and repositioning in attempts to make them more effective.

Nonetheless, advertisers appear to be encouraged by the results they’re getting with presenting consumers opportunities to dig deeper into their commercials. For example, another recent study, US Two Screen TV Lane, concluded in September by The Pool, a collective of advertisers, publishers, media and tech companies, monitored consumer responses to second-screen advertising involving three campaigns from Kraft and another unnamed company in live focus groups and through questionnaires to over 2,000 users. The results were characterized by the researchers as confirming “the value – and potential – of the second screen as a viable way to reach consumers with brand advertising.”

Researchers monitoring viewers’ responses to a zeebox TV viewing app running on their tablets reported that over two thirds of total viewing attention was focused on the tablet during commercial breaks. A majority of users noticed ads on the app, which were presented with other options, resulting in a click-through rate of 1.2 percent for ads not related to commercials on the TV set. When the ad messaging on the tablet was synched with the TV commercial, the study registered a 39 percent click-through rate on the synchronized ad unit. But the researchers acknowledged synching up second-screen with first-screen ads was technically difficult.

Meanwhile, in the first-screen space, Madison Avenue has been taking advantage of connected TVs to deliver interactive engagement, avoiding the complications of second-screen synching with automatic content recognition (ACR) techniques like audio and video forensic fingerprinting.  Participants in such efforts got welcome news in September from what was billed as the first study in the U.S. measuring the impact of smart TV advertising.

The research, which was produced by digital video brand advertising provider YuMe in cooperation with LG Electronics and Nielsen, measured ad effectiveness in three categories – banners, picture-in-picture and full-package including traditional ads – against metrics for traditional ads alone. Aggregating measures such as recall, favorability, purchase intent and propensity to recommend, the average ad effectiveness rating for full package on smart TVs was about 33 percent over traditional ads alone. PIP ads, too, showed higher performance with an average rating 23 percent above traditional ads.

The growing confidence in interactive advertising underscores the need for a way to scale such advertising beyond the confines of second screen and old ways of doing things on traditional TV outlets. One significant player in the market that’s intent on doing so is BrightLine, which says it has developed over 500 interactive ad campaigns for a client base that includes American Express, General Motors, Home Depot, L’Oreal, Verizon Wireless, NBC Universal and many other top line advertisers.

Until now, much of this work, including long-form video libraries, branded games, recipe galleries, exclusive offers and much else, has been exposed through legacy TV services supplied by the likes of DirecTV, AT&T U-verse, Cablevision and Verizon FiOS TV. Typically they support access to such material in their VOD files or specialized channels through links viewers can activate by remote control in response to prompts embedded in regular commercials.

In December, BrightLine said it was making its proprietary suite of interactive TV ad products available to connected TV platforms, including smart TVs, game consoles and connected set-tops. By using tools that allow developers to exploit the flexibility of HTML5 to enable easy association of interactive ad apps with IP-delivered content and commercials, the company is freeing the TV world from dependence on “fragmented attempts to retrofit solutions to a dying infrastructure and outdated technology,” says BrightLine CTO Keith Gelles. “TV connectivity and HTML5 are natural extensions and enhancements to the solutions BrightLine has been providing customers for the last ten years.”

Following up on the December initiative, BrightLine in January moved to address the challenge of how to leverage the new IP-driven approach to interactivity in the legacy TV space by partnering with ActiveVideo to exploit that vendor’s new Cloud TV AdCast solution. “Smart and connected TVs have unleashed a demand from consumers, marketers, content creators and distributors for television experiences enriched by Web-like interactivity and rich video,” says Jacqueline Corbelli, founder, chairman and CEO of BrightLine. “ActiveVideo’s solution accelerates our company’s mass rollout of next-gen connected, HTML5-powered ad experiences across platforms and screens.”

As explained by ActiveVideo CMO Murali Nemani, CloudTV AdCast is an interactive ad distribution software platform which frees television advertising and T-commerce applications from device dependencies in order to deliver Web-style interactive TV advertising at scale. “It’s essentially an extension of our core platform optimized with the bells and whistles that are specific to the advertising ecosystem,” Murali says. “So in that sense the product runs on the core development efforts that we’ve put into CloudTV, which is targeted primarily for next-generation EPG navigation paradigms.”

HTML5 has now become the development environment for the majority of interactive TV campaigns, which plays to both the strengths of ActiveVideo and BrightLine, he adds. “We’re using that offering environment and delivering that functionality to devices that either have under-powered Web browsers, like a Roku platform, or completely no browsers, like traditional set-top boxes,” he says. “Or it can do brand new connected devices that have Web browsers but ultimately have variants of Web browsers which are incompatible with the application.”

ActiveVideo is in a position to add significant reach to the ads developed by BrightLine clients and other marketers by virtue of its relationships with service providers like Liberty Global, Charter Communications, Cablevision Systems, Time Warner Cable, Deutsche Telecom, J:COM, Ziggo and Comcast as well as with entities in the IP platform domain like Roku, Murali says. “Right off the bat our client is on ten million devices today,” he notes. “But the real excitement is the momentum in the second quarter and beyond. As you know we expect some major deployments with Charter, Liberty Global and others. And we’re already in the market with Ziggo KPN and some major European operators. And so in that sense the critical mass is a very important establishment that we’ve put in place for this year.”

Now the question is, who among these customers will want to take advantage of the advertising capabilities introduced on the platform. “There are some markets and customers that already have the infrastructure in place to really go and see it and check it out,” Murali says. “This is what the brands are saying. You already have it, so let’s go do it. If it does what it says, then we have the opportunity to roll this out nationally.”

Along with extending reach, ActiveVideo is making it easier to get interactive campaigns to market, he adds. “If the campaign only runs six to eight weeks and it takes you three to four months to create the application for a particular device environment, it’s just a mismatch,” he says.

For example, in getting the ActiveVideo platform up and running for Roku, it took three months, which included implementation of the first interactive campaign on the Roku user interface. The next campaign took three weeks, and, after that, “once you have the client in, it’s just a new campaign,” he says.

AdCast is positioned initially in the Software as a Service (SaaS) mode, allowing service providers and CE manufacturers to exploit the capabilities on a pay-as-you-go basis as they engage with advertisers. The platform can be hosted by pay-TV or online service providers within their own data centers or by ActiveVideo in a fully virtualized, enterprise-class cloud environment, Murali says.

“As an operator or as a CE manufacturer, they may want us to host it and run it in Amazon Web Services completely, which is what we’re doing for the Roku platform today,” he says. “And ultimately the operator may choose to run our platform in their datacenters, which is perfectly fine. But the idea is you want to give them a business model that goes with the bells and whistles of the product but is optimized for this market ecosystem.”

The BrightLine affiliation provides ActiveVideo customers a direct line to advertisers that might otherwise be hard for individual operators to establish, Murali notes. “They have expertise on the brands and agencies side,” he says. “I can’t speak brands and agencies like they can, and they can’t speak distribution language as we can. From the operators’ perspective they have two organizations that really understand how to approach the two worlds.”

The BrightLine and ActiveVideo affiliation includes collaboration on gathering and analyzing ad performance metrics. The CloudTV AdCast Data Manager collects data and metrics from clients on its platform. BrightLine’s analytics software aggregates data supplied through AdCast clients and all other platforms where a given campaign runs, providing comprehensive feedback not only on performance but also to help formulate effective device and contextual targeting for future campaigns, Corbelli notes.

Such cross-platform analysis and planning is crucial to enabling “what’s next for TV as an ad medium,” she says. “There’s no question that it is one, singular rich experience consumers have with your brand, seamlessly integrated into the ways we spend the 30+ hours a week watching TV on our television.”

Initially, the AdCast applications, as demonstrated at the Consumer Electronics Show in January, are focused on ads positioned in EPGs and device UIs that allow users to enter directly into long-form commercial content with extensive search options for educational information, as in the case of L’Oreal cosmetics products, where, for example, users can learn how to achieve a certain look. Next there will be in-programming links, now in the proof-of-concept phase, that will allow users to click on a prompt and go directly to long-form advertising content.

As for the use of AdCast to support dynamically targeted interstitial ads in live TV programs, this, too, is under consideration, Murali says. “That’s something from a platform perspective that it’s very capable of doing,” he notes. “In essence what we’d be doing is what we call server side overlays. It would be developing and delivering overlay functionality coming straight from a thumb server or an IP network. If you can run that in the cloud as a server-side implementation, you take a lot of [device] dependency off the table.”