Making Sense Of IPTV

Guy Phillipson, chief executive of the Internet Advertising Bureau, discusses the emerging market of IPTV, exploring the scepticism surrounding the medium and its future benefits for both clients and advertisers…

I’ve been to a couple of trade shows and conferences recently where IPTV has been a key theme. However, to be completely honest, they taught me very little. Bombarded with hyperbole and numerous sales brochures from an assortment of service providers, telecommunications companies and software developers, each time I was left feeling somewhat bewildered. In my opinion we need to look beyond the technology and services available and concentrate on what IPTV actually is, the impact it will have, and most importantly how you persuade the advertiser to embrace it.

We know that advertisers trust TV. We know that TV advertising works. We know that consumers watch TV. But, for all its talents, broadcast television is not the complete advertising medium (although I know a couple of clients who would disagree). Imagine if you could combine the reach, quality and dynamic persuasiveness of TV with the interactivity, personalisation, and responsiveness of online. Sounds like a dream come true? Well, then you should be as excited about IPTV as I am.

It’s complicated, of course, but don’t let that put you off – there are trained experts to think about the tech-y stuff so you don’t have to. But just in case your clients need persuading about all the wonderful opportunities that IPTV will offer them, let’s indulge in a spot of role-play:

Client: I’ve been hearing a lot about IPTV. So what is it?

You: Well I’m glad you asked that question! IPTV is simply programming delivered via a broadband connection, either to a TV set (on a closed network, like existing cable services) or to a PC or laptop (that’s an open network, downloaded to your computer). Consumer behaviour will be slightly different for these two platforms when the viewer clicks through to find out more about your services, their programme will be frozen, so they don’t miss a thing when they click back, but the marketing principles will remain the same. It’s early days at the moment, but I really think it’s something we should be looking into now.

Client: Why?

You: Because it’s where your consumers will be in years to come, and you need to follow them. I have it on good authority that IPTV will play a huge part in the future of advertising. Basically audiences will be able to watch whatever they want, whenever they want, so the implications for advertisers are massive.

Client: How will advertising be different on IPTV, then?

You: Well it combines all the best bits of TV and online advertising. You’ll be able to track consumer behaviour, find out what they’ve been looking for, what their likes are, their dislikes, and then advertise to them accordingly – this is called targeted, or addressable advertising. On a TV, the interactive element will be far more user-friendly than the rather clunky iTV red button experience we have today.

When people watch TV online (on a computer), the opportunities are even more exciting. With internet TV, your ads served before, during or around the programme can link straight through to your site or even interact with the programming itself, and of course being online, everything is measurable. Imagine a broadcast quality car ad that you can also interact with – look inside the car, see how it drives, request more information, and even book a test drive. This is all possible with IPTV.

Client: But if it’s video-on-demand, won’t it be subscription based? Doesn’t that mean there won’t be any room for advertising?

You: Not at all. Research conducted in the US shows that the majority of consumers will happily watch ads if they can stream and watch content for free. In fact, Disney recently launched a trial service, offering episodes of Lost and Desperate Housewives online at no cost, but viewers had to watch two or three in-streamed ads before and during the programme. Media owners such as MSN and AOL are doing this too. I’ve even heard of brands launching their own TV channels online.

Client: So why is it taking so long for the market to develop?

You: Well the technology’s there, the main hurdle seems to be getting people to understand, both consumers and the advertising community. People are just testing the water at the moment, and once we know what works that’s when the real fun starts.

Client: Great, I’m intrigued, tell me more! (Or something like that.)

‘ipTV – The Emerging UK Market’ is available to download at iabuk.net.