2.1 Advertising Scenarios

Interactive television provides marketers with the means to personalize and collate customer data, and the opportunity to engage with the customer for more than the traditional 30-second spot. Niche TV channels mean better targeting of consumers and the ability to measure individual customer response. Some researchers expect the majority of iTV advertising to be interactive and the total iTV advertising revenues to be in the billions.

iTV advertising encourages viewers to access the personalized content. Targeted audiences are directed to a Web site displayed on a portion of the screen while the advertisement video clip is playing in the background on the TV. The iTV Web site provides a range of additional information that cannot be contained within the format of the video clip. As an example, it allows consumers to receive detailed information and order directly using the remote. These video clips may need to be scaled, and there may be custom side or top panels associated with the advertisement.

An interesting report of effectiveness of iTV ads (iAd), called the Advertising Confidence Index (ACI), is available from Myers Reports Inc., at www.jackmyers.com/research/myersreports.htm [ACI]. This report was compiled in June 2001 through surveys of more than 150 media buying executives. Although the ACI index for all media continues to hover around 49.40, iTV buys ranked a 52.13 on the Index, online sponsorships rated 60.82, and banner ads were 49.09. In comparison, network broadcast TV rated only 39.25 and consumer magazines rated an ACI of 46.35. The latest ACI report is available from Myers Reports at www.jackmyers.com/research/adconfidence9-02.htm.

2.1.1 Mass Customization

With the advent of the Internet, the opportunity of customizing content to the individual preference of millions of viewers became apparent, as the major Internet players (e.g., Yahoo!) derive a significant portion of their revenue from such mass-customization capabilities.

iTV enables advances in the area of user -selectable content to be used in conjunction with traditional broadcast distribution. Today, many market researchers believe that iTVs will ultimately deliver commercials targeted specifically to an individual household. For example, a home with young children would receive toy and detergent ads, whereas that of a retired couple would see health care related commercials. They will also allow parents to have far more control than they currently do over the TV programming their kids can watch.

The primary method for achieving mass customization is through the use of channel changing. The ATSC Directed Channel Change (DCC) enables the broadcaster to indicate when the viewing experience can be enhanced by a change of virtual channels within or between physical channels. The requested channel change may be unconditional or may be based on geographic, demographic, or categorical broadcast programming content selection criteria specified by the viewer.

The DCC relies on the DCC table, which contains a list of structures that permit the ability to specify zero or more tests to be performed to determine whether or not a channel change can be effected. These tests may include determination of whether a viewer's DTV is located within a particular postal code region, whether the viewer is a member of a particular demographic group, or whether a program's content rating value results in a viewing block. In addition, when the viewer specifies the appropriate preferences, the tests may customize content according to age group or content type using 141 Genre Codes (see ATSC A65/A PSIP, Tables 6.19 and 6.21).

Mass customization can also be achieved by combining customized subsetting of a single uniform broadcast, with customized data pull from the Internet using an ISP to fit the preferences of individual viewers (see Figure 2.1). The unexpected result is a simultaneous increase in the advertisement effectiveness and time capacity, both of which are critical revenue drivers for broadcasters.

Figure 2.1. Mass customization achieved through subsetting.

Many believe that one of the biggest stumbling blocks for iTV is fear that the technology will compromise viewers' privacy. The use of subsetting without Internet pull avoids sending data out of the set-top box. Specifically, this technique prevents the transmission of preferences stored in iTV receivers back to an outside server.

Customization of ad-sequences (whether using DCC or subsetting) to an individual viewer's preferences is very powerful, as it simultaneously increases the total advertising revenues for broadcasters and the return on investment for advertisers. The total advertisement capacity increases as the total number of advertisement streams increases . Instead of having a single advertising stream, broadcasters could transmit multiple streams, that can reside in transport streams other than the main program transport stream. Although each of these streams is less likely to be viewed , its effectiveness is higher. Therefore, the cost of each ad slot is lower, but the total value of all advertising slots is higher. This directly benefits advertisers because it results in a reduced cost of each individual advertisement and increased effectiveness through targeting. Broadcasters benefit because the cost of an advertisement is reduced by a factor that is less than the total number of advertisement tracks, and each appearance is much more targeted.

To customize advertising sequences there is often a need to access multiple video streams or files, and switch the display during pre-determined discontinuity points. When such a need arises, VOD servers could be used to deliver custom advertisement sequences. To achieve the desired switching of advertisements, an iTV application consults viewer's preferences to determine the best advertisement subset to display. The advertisement video clips may be delivered using either IP-based or MPEG-based protocols through the main broadcast or via a return channel; in either case, bandwidth must be allocated carefully .

The push-pull mass-customization model utilizes bandwidth shared among millions of viewers to push a uniform broadcast which then pulls content customized to the individual preferences of each of these viewers. This essentially pushes advertiser selected Web pages onto targeted groups of millions of receivers simultaneously. The ISP benefits from such an architecture as it eliminates network traffic that would otherwise be needed for the transmission of the uniform content, resulting in a better response time and improved customer service. Broadcasters benefit as they can customize their broadcasts to individual preferences. Further, broadcasters may sell bandwidth to operators of high-traffic Web sites or ISPs so that traffic to their hot-spots will be reduced.

Interactivity has pitfalls as well. When viewers enter an interactive mode, they may be prevented from watching advertisements. Advertisers interrupting an interactive (e.g., email) session may be achieving negative impact. This issue could be addressed by adding, within the GUI of interactive programs, ad regions within which image and video advertisement can be scaled to fit.

2.1.2 Traditional Ads Enhanced with Data

General industry wisdom suggests that it is not recommended to innovate in more than one dimension. Therefore, as the first step, it is expected that iTV advertisements will innovate along a single dimension: enhancement of existing video ads with data services, rather than authoring of a new type of ad.

In an enhanced advertisement scenario, the viewer watches a television program selected without regard to anticipation of the advertising to be shown. At some point, a sequence of short video commercials starts. About half way through the period of a commercial, when it is enabled for interactivity, an on-screen indicator alerts the viewer. From that point until the end of the commercial's time slot, the viewer is able to select the most relevant information using the remote control. If the viewer does not interact by making selections, the content of the commercial will make sense to the most general of the possible audiences and will appear to be a normal advertisement. If the viewer does interact, that interaction must occur when the options appear on the screen. Interaction with such an advertisement enables the viewer to learn more about one of some special differentiating features of the product or service. At the very end, the viewer may be given the opportunity to learn additional information, customized based on ZIP codes and other household preferences. As an example, this customized information may include a photo of a local retail outlet, its location and map, phone number, or Internet address.

This scenario is sometimes referred to as the two-phased commercial (see Figure 2.2). During the first phase, the commercial's data service, namely the advertising application, is downloaded and decoded. During the second phase, interactivity is enabled and the iTV enhancement application is launched. A number of variations on this theme can achieve tighter receiver resource management. For example, the loading of the data for the next commercial could be performed in the second phase of the first commercial, and can be impacted by viewer selections.

Figure 2.2. Two-phased processing of existing advertisements enhanced with iTV applications.

The interactive application could present the viewer with localized customized information (see Figure 2.3), where the address of the nearest local dealer is displayed. The additional information provided upon selection of the more info button may contain information about the product, as well as information about other clients having a similar profile as the viewer and who use that same product.

Figure 2.3. An example of a video advertisement enhanced with customized information.

The enhanced ads scenario induces a number of technical system requirements. The data needs to be transmitted, received, and decoded during the period of the commercial. The commercial needs to self-configure to execute on receivers with limited capabilities. To handle channel surfing, interactivity should be disabled in case tuning is performed in the middle of the commercial.

2.1.3 Data-only Ads

Another type of iTV commercials are those that do not contain video. These ads are less expensive for both advertiser and broadcaster because they require very little bandwidth (compared to video ads) and can be seamlessly tacked onto regular video broadcasts; in fact, they are not related and typically detached from the video. They transition in and out using some sophisticated animation. They could further pull relevant localized advertiser information from an Internet connection, or a return channel.

During the TV program (not in a commercial break) a small graphic transitions in using some animation. It is placed on a predesignated (possibly inactive) area of the display and persists for some duration (e.g., 30 to 90 seconds). During that time period, the viewer is presented with an indication that the content is interactive without indicating whether the interactivity relates to the main program or is a separate advertisement. When the application is fully loaded and decoded, it is enabled for interactivity, and an on-screen indicator alerts the viewer. If the viewer does not interact by making selections, the content of the commercial will make sense to the most general of the possible audiences and will blend with the background video. If the viewer does interact, that interaction must occur when the options appear on the screen. On selection, the advertising application may record that event (e.g., by adding a bookmark) and enable the viewer to inquire about products at some later time. It is also possible for data-only advertisements to blend with the video (e.g., home-shopping network) or to divide the screen into two parts , one of which contains the regular video and the other of which enables TV-commerce (e.g., submission of a direct order).

Such data-only ads can be used by broadcasters to announce events on affiliated channels and enable the viewer to select a program in advance, either for viewing or for recording. As the program becomes available, the viewer is given an option to automatically tune to that program and possibly record it for later viewing.

When an Internet connection is available, a data-only advertisement may utilize links to Web sites related to the advertised product. One possibility is that when the viewer selects the more info button, a bookmark is automatically added, reminding the viewer, at a later time, to review that link.

Data only advertisements should utilize a variety of animated transition and rendering techniques such as dissolves , fades, wipes, flying/scaling graphics, rotating 3D graphics, and other creative animated appearance and disappearance techniques.

Data only commercials induce a number of requirements. These commercials may not significantly obscure the video. They should be presented with loose synchronization when their timing is of marginal importance. In the case of a banner-ad containing a live video preview, the TV programs referenced must be transmitted simultaneously and can be tuned to using a second tuner. In the case that an ad contains an Internet bookmark, a Web site must exist that is accessible through the receiver's return channel at the time that the commercial appears.

2.1.4 Ads Enabling Financial Transactions

iTV commercials may enable financial transactions immediately on activation (impulse purchases) or at a later time (iTV shopping cart). When such a commercial arrives, the viewer is presented with an indication that it is interactive. On selection, such commercials may present the viewer with a purchase option. On activation, the viewer is presented with an advertiser-supplied graphics requesting the viewer to fill in the details of an order. Some iTV receivers may feature an automatic data fill or defaulting option that is similar to the auto-fill feature of state-of-the-art Web browsers. This graphic form contains an order submission button, which upon selection, verifies the order information and performs the financial transaction. On successful completion, a conformation is presented to the viewer. An option should be given to the viewer to have the confirmation emailed or a hardcopy mailed.

This scenario implies a number of requirements. The advertiser must coordinate with both the broadcaster and the interactive service provider (see Figure 2.4). The commercial must have some graphics (e.g., flashing icon) indicating it is selectable (Figure 2.5 left). The application within the broadcast must be able to initiate and process a financial transaction. The order-details form may be transmitted either via a broadcast or a return channel (see Figure 2.5 right). The logic that requires performing the financial transaction (e.g., working against clearinghouses) could be implemented by the downloaded application (i.e., at the receiver) or by a server-side software application, hosted by some ISP on behalf of the vendor. During the period of interactivity, the numeric pad of the remote control passes events to the commercial and does not cause a channel switch.