Network Insight Institute

Session 3 - Discussion

Session 3 - Discussion

BOB PETERS, Global Media Analysis and ANZ: My question is for Duane, although Malcolm also alluded to it towards the end of his presentation. My question relates to the role of advertisers in an interactive environment. Duane, you talked about the new business model, and the fact that free-to-air broadcasters are going to be pushed aside in this era of new distribution platforms. You also spoke about viewers being bored and zapping the ads. Maybe they do zap the ads now, but if the ads were interactive, had embedded games, were linked to Big Brother polling, and you could win prizes by responding to what appeared in the ad three seconds ago, then maybe viewers may not be so bored. There could be any number of ways that the technology, the interactivity, could actually be used to assist advertisers. I would have thought that that would be important.

This gets us to Malcolm’s point, that there is a lot of money to be made, and perhaps even better targeting of the audiences. What appears to be a threat could in fact be a tremendous opportunity.

I was wondering Duane, do you have any information you could share with us about initiatives that advertisers might be making in this area? On your comment about export opportunities, I also would have thought that this is a fantastic opportunity given the globalisation of the ad industry and the global branding that goes on. Good interactive advertising products would surely have tremendous export potential.

DUANE VARAN, Interactive Television Research Institute: Yes, absolutely. I think you are right on all those counts. The advertising opportunities associated with interactive TV are fantastic in a lot of ways. There are fantastic opportunities for response, for extending brand, and for cognitive engagement. Across the board there are lots of wins.

Whilst clearly there are some challenges, the advertising industry shouldn’t be scared. The advertising industry, ad agencies for example, make their money primarily because of the added value they have to contribute. The greatest added value is the challenge of telling a story in 30 seconds; not everybody can tell a story in 30 seconds. Advertisers have worked with one of the greatest constraints that you could imagine, and they are able to weave magic by getting us to cry, to laugh, to move us, in 30 seconds.

So agencies, if they can respond to the challenge, have a business for themselves in this game. If they don’t respond, then the big challenge for agencies will be the need to coordinate interactive television advertising. If it isn’t the creative agency but another entity, then they are going to capture that business. Remember, by the end of the decade, perhaps even further, every ad will probably have some interactivity embedded within it. So whoever captures that business is going to be the entity which is coordinating the lion’s share of advertising. There is no doubt that this is really critical to the future of advertising agencies.

BRUCE MOIR, Independent Producer: This is a question for Duane. You were talking about the export opportunity for Australian content producers in Asia. I was just wondering if, in any of your research, you have looked at issues of cultural specificity in interactive television. As you are engaging with a user, rather than a passive viewer, does this become a critical factor?

DUANE VARAN: Very, very good point. I talked earlier about cognitive activity increasing with interactivity. One of the things in an earlier study that we found is that cognitive activity going up is both good and bad news. The good news is that it means people are engaging with the programme. The bad news is that it means people are expecting. Expectation levels start shooting through the roof, because when a person presses a remote control, they do it with a very high degree of anticipation about what they are going to encounter. When that anticipation is violated they get angry, whereas in linear television where the expectation is not there, it just kind of washes off them and they forget about it. With the interactive ads that we test for example, if something does not work huge damage to the brand occurs.

So you are right, the business of expectation management does have very strong cultural elements. Nevertheless there is still an opportunity for Australian content producers, not just in Asia, but in the US market as well. The real opportunity is that there are going to be players in this space worldwide who are going to be looking for people to partner with. Eventually the US will be raging ahead, and looking for partners. If you do happen to be in this game, or if you have intellectual property that is valuable in this space, then they will be wanting to do deals with us. If we can get in this game, I have no question that there would be fantastic opportunities for us globally.

WILLIAM ATKINS, malcolm long associates: In the short term, advertising is going to be a particularly problematic area. There are going to be the issues of interactive software between platforms and authoring tools, for instance. In the UK, the early experiments on BSkyB were tremendously unattractive. The Chicken Tonight interactive advertisement has gone down in history as the first experiment. Procter and Gamble commissioned the ad. It took 14 clicks in two minutes. That process registered viewers, but they had to also use a PIN, and from there Procter and Gamble posted the viewers coupons. Sure, that was experimental, and it was learning who was actually interested enough to go through 14 clicks to get Chicken Tonight coupons through the post. There’s a lot of crawling before running occurring. This idea of ‘subsets of subsets of viewers’, as opposed to simple mass audiences, remains important in advertising, because an advertiser from now on faces negotiation with channels and with platforms, and needs to gain insights into consumer data. This all requires ad sale coordination between platforms, and differentiation of advertisements and so forth. In short, interactive advertising is a medium to long term proposition.

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