THE BLOG
11/28/2016 07:18 pm ET Updated Dec 06, 2017

How Will Interactive TV Ads Change the Media Industry?

2016-11-29-1480378381-9377551-interactivetv.jpg

By Matt Dowling, Trading Director, Zenith

Channel 4 has just announced plans to introduce the first ever interactive ads on British TV. Launching first on TV streaming and media player Roku, before coming to a TV screen near you, interactive ads will enable viewers to select different ads, watch additional content and, most excitingly, instantly purchase products being advertised via click-to-buy.

The introduction of interactive TV ads to the big screen is certainly a bold move by Channel 4 and seems fitting, considering it was the first UK broadcaster to launch interactive ads on its online TV player back in 2011. It is great to see a free-to-air broadcaster demonstrating a commitment to innovation, and any move which offers brands and advertisers more choice and creative solutions is certainly welcome.

Television is one of the few mediums which has not only continued to maintain its relevancy in a period of digital growth but has also arguably benefited from it. Indeed our own figures show that marketers will spend approximately £4 billion with broadcasters by the end of 2016, compared to £3.3 billion just ten years ago. Television remains an attractive medium for advertisers, marketers and brands, however this has not stopped broadcasters from continuing to invest in and develop their digital offering, ensuring their content remains relevant to consumers’ consumption patterns.

Unquestionably, Channel 4’s announcement is promising news for the future; however there are certain elements of the announcement that marketers and brands will need to consider if they are to evaluate the impact this will have on television advertising spend.

What is the industry’s response?

The launch of the first interactive ads on television is headline news, but thus far, the announcement has been met with some reserve across the media industry. This is no surprise, given that incorporating interactive elements into broadcast television has failed to meet expectations in the past. For example, the red button on TV remotes, which gave viewers access to similar bonus content capabilities that Channel 4’s interactive ads will offer, ultimately failed to impress either advertisers or TV viewers. That is not to say that interactive ads will go the same way, however, it does perhaps give reason for advertisers and marketers to be more cautious and careful in their expectations.

Consumer response and value to advertisers

If the demise of the red button has taught broadcasters and advertisers anything, it is that it does not matter how good an idea may sound in theory, if consumers fail to respond to the feature, it has failed in practice.

Presumably, it would appear that Channel 4 is aware of the above. The broadcaster is clearly reacting to consumer viewing patterns - half of its VOD (video-on-demand) viewing is on the TV - demonstrating that Channel 4 is willing to constantly evolve and adapt to the fast-paced and exciting TV landscape.

Yet the success of interactive TV ads will heavily depend on how receptive audiences will be to interacting with brands on the platform, which will ultimately distract them from viewing. As it stands, the television is used for the best viewing experience and mobile experiences are used for the best interaction, social and shopping experience. Will interactive TV ads enable television to sit alongside mobile as a channel for interaction and shopping?

Due to the limited roll out of Channel 4’s interactive TV ads initially on Roku only, the proof in the pudding will be how many people choose to interact with ads and, more importantly, the insight and subsequent value this can add for brands.  

Better insight into the customer shopping journey

For advertisers and other broadcast channels who may follow Channel 4’s lead, something which will be closely monitored is how Channel 4 utilises the data from this new platform to help understand the customer path to purchase, and, how this will inform media executions across their portfolio of channels.

What is clear is that interactive TV ads could enable personalised content for each viewer, which would be hugely beneficial to brands and consumers. Channel 4 could now essentially serve a different ad to someone across their portfolio based on their interaction, and ultimately deliver better ROI on the ad served.

Despite the initial response, Channel 4’s interactive TV ads do look like a promising proposition for advertisers and consumers. Innovid, the video marketing solutions provider that Channel 4 has partnered with to launch the interactive ads, has a strong pedigree in the interactive video marketplace and brings with it a wealth of experience. In order to see the actual impact that interactive TV ads will have on the industry, we will have to wait to see the results of the initial tests. But there is a quiet confidence about Channel 4’s latest innovation, and a hope that it will provide a better user experience than the previous interactive TV models.