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The Future of Advertising on Interactive TV

The success of digital advertising is a function of its interactivity. The understanding that consumers click a mouse or tap a finger to play a video, open a link or make a purchase, is now second-nature online. But this same model doesn’t apply for TV, where a “lean back” model of passive consumption has long prevailed. That may soon be changing. According to news from the UK, one of the country’s most popular broadcasters has unveiled plans to offer “interactive” TV ads to viewers. While this isn’t the first time a media company has tried an interactive TV ad (think about the red buttons that have long been on remotes) we may have finally reached a moment where advertisers and consumers are willing to engage. Here’s why:

Consumers are more comfortable with “interactive” TV than ever before
The continued success of devices like Apple TV and Roku, both of which now sit in millions of US households, is one sign of the growing success of connected TVs. These devices blend the passive “lean back” experience of a traditional TV set with the interaction more typically seen online. Yet the ads that show up within these connected devices still often look very much like TV ads, taking the form of a standard :15 or :30-second pre-roll unit. Advertisers who attempt interactive creative will likely have a “first-mover advantage” for experimenting with this novel medium.

More opportunity for personalization
Car buyer BMW is experimenting with a new interactive ad that lets connected TV viewers customize the company’s new X1 model with various colors while viewing. “It allows audiences to begin their showroom experience without getting off the couch,” noted Robert Aksman, an advertising executive associated with the campaign.

Interactive TV content appears to outperform pre-roll
Interactive TV isn’t just more novel for viewers. According to some early research, it may also outperform other similar TV ad units. One recent study of completion rates for video ads viewed on connected TVs and “over the top” (OTT) devices found that the interactive “custom” video ads were finished by viewers at rates five percentage points or higher than standard pre-roll.

There will likely be more opportunities to “get creative” in the future
Even as more companies like BMW and the UK’s Channel 4 experiment with interactive TV, we’re still in the early days. In fact, we may eventually see fully interactive TV shows. Recent news suggests CBS is re-developing the famous “Twilight Zone” series for connected TV sets, allowing viewers to consume the content in a “choose your own adventure” format that lets users pick the ending. Just imagine what an ad campaign integrated with this type of show might look like in the future…