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A Work In Progress: Assessing the State of Interactive TV

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By: Andy Myers

A case study presented at Tuesday's Collaborative Alliance in Manhattan carried the subtitle, "A Directional Work in Progress," and it struck me that that could describe the state of the Interactive TV industry today: a work in progress.

The goals for advertisers, agencies and distribution platforms are clear: precise addressability (targeting the right consumers); true interactivity and engagement of those prospective consumers; and accurate measurement of the effectiveness of campaigns. But knowing the challenges and solving them are two very different things.

Bruce Dennler and Mark Mitchell of Canoe Ventures, a joint venture of cable operators, laid out the hurdles facing the industry. "There's no easy infrastructure in place" to gather data effectively, Mitchell said. There's a lack of standards and guidelines for measuring data, and the current environment is too complex. So multiple buys and multiple applications are needed for advertisers and agencies to determine what is working and what isn't. And even then, the measurement tools available are not adequate to the task.

This is a frustrating predicament for industry executives and laypeople alike: we've been told about the coming revolution in interactivity for years, but significant roadblocks still stand in the way. It's clear from the number of companies participating in the Collaborative Alliance, which is sponsored and hosted by media agency MPG, that there are many organizations working on ways around or through those roadblocks. But there's also a noticeable lack of specificity when detailing the solutions. Canoe Ventures' proposal for the next two years promised more effective addressability and measurement, but didn't detail how they would achieve it.

Attendees at the Collaborative Alliance were treated to a bit more specificity on meeting the first challenge (addressability) by E.J. Von Schaumburg of Feeva Technology. It embeds software (or 'tags') in the routers that Internet Service Providers use to direct traffic on the web. These tags act a bit like the cookies that we all have on our computers, but allow advertisers to get demographic data from Internet users (as well as users of mobile phones and other devices) based on their zip codes. (Using zip codes rather than household data allays privacy concerns that may arise from such tracking methods.) But it's unclear whether this technology can provide precise enough consumer data, or be effective across other platforms such as DVRs.

Measurability was also a topic of discussion at Tuesday's event, thanks to the Council for Research Excellence, an independent group created by the Nielsen Company. They conducted a "Video Consumer Mapping Study" measuring media usage directly, using on-site human observers of Nielsen homes. The study yielded the interesting conclusion that people don't just under-report their TV usage, they also over-report the time they spend online.

But the study also relied on the same outmoded Nielsen methodology that has given us our inadequate and widely vilified TV ratings system: using a relatively small sample of households and then extrapolating the collected data. But truly effective measurement can't be based on extrapolation; in such a fragmented media environment there are myriad ways for consumers to get information and entertainment, and we need to be able to measure that behavior directly.

The Council for Research Excellence also found that new DVR owners spend relatively little time watching DVR playback in comparison to live TV. That told the researchers that concerns about people fast-forwarding through commercials are overblown: if people are still watching live TV, they're still watching commercials. Shari Ann Brill of Carat stated matter-of-factly, "DVRs will not reach the mass acceptance of VCRs."

That may be true, but it's a dangerous position for an industry that needs to adapt to new paradigms, not ignore them. It's a small step from saying that DVRs will not penetrate deeply into the market, to disregarding fundamental changes in TV viewing behaviors. And it's a justification for doing business as usual, rather than finding creative ways to exploit new technologies. It was a jarring end to a forum that was ostensibly about looking toward the future.

Andy Myers most recently was senior producer for Bloomberg TV.

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This post originally appeared at JackMyers.com.