NEW MEDIA: SPOTLIGHT ON INTERACTIVE TELEVISION - Advertisers divided on value of picture-within-picture ads

Can interactive advertising benefit from the newest ad format, Alasdair Reid asks.

Interactive television has been one of this year's advertising success stories. It is especially gratifying for all concerned that it has gathered momentum during a downturn. Even more impressively, it has moved forward without the faintest trace of hype. Perhaps there's a lesson here.

At the end of October, Sky announced it had signed up its 200th interactive advertiser since launching its first interactive system two-and-a-half years ago. An important milestone, obviously. But just as exciting is the underlying growth trend as we head towards Christmas. Because October was in itself a record month for Sky, with a total of 25 interactive television ads going live - and, across the year, each month has been busier than the last.

All of which lends extra lustre to the latest interactive television initiative from Channel 4, which last week launched a new and improved version of the interactive system it runs in conjunction with GOiNTERACTtv on the Sky Digital platform. The big innovation here is that you can enter into a financial transaction stimulated by the ad (buying a product or, as with the British Red Cross, the first advertiser to use this new system, making a donation) without leaving the broadcast stream. Programming continues in a quarter-screen window while the rest of the screen is given over to interactive prompts and information.

Merlin Inkley, the head of airtime management at Channel 4, emphasises that the system is very much at a "toe in the water" stage, but he's quietly confident about its prospects. "It is a first, and it does help to extend TV-commerce. There are lots of advertisers who could be interested in this - financial services, charities, CD and video advertisers - the sorts of advertisers who might be using DRTV. On Sky's own system you can carry out financial transactions but you have to leave the broadcast stream."

This whole question about leaving or staying in the broadcast stream is one that causes media owners a huge amount of anxiety. This new-media stuff is all very well, argue some schedulers, but isn't it basically a means of encouraging people not to watch your programmes?

So it's no surprise to learn that Sky is also looking to launch a "picture-within-picture" interactive product like the Channel 4/GOiNTERACTtv system.

Robert Leach, the controller of interactive advertising at Sky, believes that product range and choice is helping to grow the market. When you leave the broadcast stream on the Sky Digital platform you can go to a dedicated advertiser location (DAL), which is basically a TV version of a website, offering full video; or you can have a micro-DAL, which is text and graphics only.

"We're seeing growth in all areas and it's happening primarily because advertisers can see that it is effective. There's now a range of options out there and I'm sure we'll see more picture-within-picture applications," Leach says.

But, Leach adds, it's important to remember that interactive television is not just about response.

Although that may be the most instantly measurable aspect, it is also about getting people to interact further with the brand.

But just how important is the broadcast stream issue to advertisers?

Howard Nead, the managing director of PHDiq, says that the new Channel 4 system is a welcome addition to the marketplace. It could, he argues, be important for impulse-buy sectors and also for certain seasonal markets: "For instance, Christmas, Valentine's Day, Father's Day, Mother's Day.

You can put together a calendar of such events and produce discrete bursts of activity. The Channel 4 angle is interesting because of the advantages inherent in the audience it delivers - and in this case we know exactly how many are watching via the Sky box. And the numbers are greater than those delivered by Sky's own channels or the Flextech ones. So it increases the number of impacts that can be delivered interactively."

But Nead can see both pros and cons when it comes to leaving or staying in the broadcast stream. "Leaving allows for maximum creativity but that's not always an issue because it's difficult to get advertisers to invest in creativity in the non-broadcast stream. But from an advertising point of view what you can do in the broadcast stream will be largely dictated by templates (set up by GOiNTERACTtv) so it will be attractive to certain types of advertisers more than others. But having a spectrum of different ways of going interactive is certainly helping to encourage people to take part," he says.

Andrew Howells, the managing director of the interactive TV specialist Zip Television, shares some of those doubts. "It's excellent from the point of view of moving the industry forward and it's great that you can sell product from an interactive application," he says.

But he has little sympathy for broadcasters working to what he sees as increasingly outdated agendas when it comes to keeping viewers in the broadcast stream. "You can see what the argument is from the point of view of some broadcasters - but as an advertiser you want attention and we don't want to be competing with programming. On the cable platforms, with interactive advertising you go to something that looks like an inferior quality website with (the broadcast stream) video running in a window the top corner. The problem is that people are still distracted by the video in the window."

Howells concludes: "The answer, I guess, is to make it a quick transaction. Even with the new Channel 4 system there is so much data to be filled in that you're halfway through the next programme before you're finished."

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