Research Notes

Interactive Advertising on Digital TV faces new problems

The mobile phone will be the preferred TV return path.
Still shaken after the collapse of ITV Digital in the UK, the DTV industry faces a new threat – mobile services on the mobile telephone.

The Digital TV sector has been, amongst other things, waiting for Interactive Advertising on Digital TV to take off on a large scale, thereby pumping money in to a sector that has had a long and tough uphill haul to attract new digital viewers and start paying back the huge investments in the deployment of Digital Set Top Boxes.

But the latest reports to be published from Strand Consult in the coming weeks, point towards that new mobile services and features on the mobile phone could obliterate the hopes of DTV operators and commercial DTV broadcasters.

Advertisers will be able to use new services on 2.5G and 3G mobile phones to push media rich content directly to the viewer, without having to create expensive Interactive advertisements. In fact, one campaign can work across all digital platforms in multiple countries, without the expense of having to redesign for each platform – a problem that Digital TV has been fighting with, due to lack of an industry standards.

So how would this work? In an television advertisement break, whether it be on digital or analogue TV, a SMS or MMS number pops is shown. By sending an SMS or MMS to the number, users will be able to receive media rich content, special offers, compete in a quiz for prizes and much more – all on their own mobile phone. So one member of the family can interact with one advertisement, while another member interacts with another advertisement – simultaneously on their mobile phones! In fact, as the MMS application is resident in their phone, they can actually wait until later, before viewing the contents. The implications of this are obvious. It will not matter whether users watch the advertisement at home, in a hotel room or walking by the TV shop on the high street! The interaction can be anywhere and the contact between the advertiser and customer established.

Add to this that Advertisers, together with the Mobile Operators will retain the customer information and even have a billing system for instant purchases, the outlook for the Digital TV operators does not get better.

Our newest report ” How to make money on mobile services ” shows that the market for television generated mobile services will grow to Euro 1.3 billion in 2005 in Europe. And that is actually a conservative estimate, based on the operator’s slow progress in offering revenue sharing business models on the upcoming technologies to help kick start the market by making it attractive for content owners and advertisers to start developing mobile services. The size of the market for mobile services derived from television can be much larger if the operators and advertising industry move early in strong partnerships to develop innovative advertising solutions that will take on a whole new dimension as colour screens and higher download speeds hit the terminal market – a welcome change to the prospect of investing fortunes in interactive campaigns on non-compatible Digital Television platforms. How the mobile services market will develop in the coming years, the rolls of the operators, content owners and technology providers and what needs to be done to ensure the success of the 2.5G and 3G rollout is explained in detail in “How to make money on mobile services ” from Strand Consult.
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