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What is interactive
There’s a‘You say potato, I say potahto’ scenario going on in interactive TV.
The term ITV is used to refer to two types of interactivity: one dealing with
usage, the other with technology.
Strictly speaking, ITV is an overlay
in pay TV that enables an engaging
experience. ITV is frequently confused
with TV convergence, however—the
marriage of the TV set and the
internet. This has become especially
bewildering as the market speculates
about an Apple TV set, which is
expected to be named iTV.
What it boils down to is this:
Interactive TV is delivered via the pay-TV set-top box and converged TV
functionality is delivered via the web
through internet-connected TV sets,
over-the-top boxes like Roku or
gaming consoles, according to Rex
Harris, innovation supervisor at SMGx.
Interactive TV enables a
participatory experience with content
on the TV screen. Converged TV is
basically content—whether video or a
web page or a Facebook stream—
routed to the TV screen from
something other than your cable or
“Interactive television is about
engaging with content [on the TV], not
the hardware [with which you
engage],” said Ashley Swartz, senior
VP-ITV practice lead at Digitas. “The
response path is no longer confined to
the remote control. In a connected
living room, the tablet or mobile device
can act as the remote. Tomorrow it will
be as easy as ‘talking’ to your TV or
simply gesturing . … TV is the next
great disruptor, which is a paradox, as
advertisers look at it as their anchor.”
Joel Hassell, said in a statement that
the individual carriers would
continue pursuing ITV business
through their own ad-sales teams
and video-business units.
engage with brands, ultimately
deriving more value, Ms. Swartz said.
A viewer can respond to offers
instantly with the click of the remote,
and brands can drive him to second
screens like smartphones and tablets
for further engagement.
“ITV brings the power of internet
advertising—which is better able to
target users—with the impact of a
huge screen on the wall,” said Frank
Barbieri, exec VP-emerging platforms
at video-advertising platform YuMe.
“ITV has the potential to make TV [ad]
buys more effective and efficient.”
But according to eMarketer, just
8% of advertisers invested in
connected-TV video ads in 2011,
basically flat with 2010.
Once cable operators are fully
onboard, “networks need to integrate
interactive components to ads, and
then the advertisers will follow,” said
Jack Myers, media economist and
chairman of Media Advisory Group. “It
hasn’t been a scalable market, which
How can I buy into
“Advanced advertising” spots are
typically sold by service providers as
pop-up overlays that can lead viewers
to longer-form video, polling, trivia or a
branded destination, turning what’s
often a 30-second spot into an active
gateway for engagement. Cablevision
has been at the forefront of ITV, giving
advertisers the opportunity to have
their own channels and programs.
TiVo, Dish Network and DirectTV have
also been active players, and some
expect Comcast’s NBC Universal is
about two to three months away from
making a significant advancement.
Canoe Ventures, the project of six
cable giants—Comcast, Time Warner
Cable, Cox Communications, Charter
Communications, Cablevision and
Bright House Networks—that lets
advertisers include interactive
elements in commercials, said last
week that it is closing its ITV-ad
business and will focus on video-on-demand advertising.
Canoe’s newly appointed CEO,
What device will be the primary
driver of converged TV?
The most popular way to connect a TV
to the internet is through game
consoles like Microsoft’s Xbox 360 and
Nintendo’s Wii. Twelve percent of U.S.
households use such devices for
online video content, according to a
survey conducted by Strategy
Analytics in November. Consoles were
in more than 60 million households as
of third-quarter 2011, according to
Interpublic’s MagnaGlobal unit.
Less prominent are over-the-top
boxes from Apple, Google, Roku and
Boxee, among others, which allow
access to web content via a TV set.
Blu-ray players and some DVR
marketers also let viewers access
streaming content. But more
connected TVs entering
the market and making
watching online content
more seamless will render
the boxes obsolete. iSuppli
estimates sales of internet-enabled TV sets will hit 148
How big is the
and how big can it
About 31% of U.S.
households use a device
TV to watch online video,
according to market
researcher Parks Associates.
About 17 million U.S. households
own a connected TV and ownership
of streaming media players has
nearly doubled since the end of 2010,
but only a fraction of people owning a
web-capable TV actually connect it to
the internet, according to research
from NPD In-Stat.
“As it becomes easier to hook
them up, we have seen activation
rates increase exponentially,” Ms.
Swartz said. “I liken it to gaming
consoles, which had a difficult time
getting gamers to connect to the
internet. Then Microsoft began
shipping the Xbox with a LAN cable.”
About 17 million U.S. households
own a connected TV.
What are the challenges and
opportunities for advertisers?
Interactive TV can transform
advertising from a passive consumer
experience into a “call to action” to
In a Deloitte poll of 50 agency
executives, brand owners,
broadcasters, distributors and tech
companies, 93% said that “advanced
advertising,” such as interactive or
targeted spots, would not cannibalize
traditional brand-building campaigns.