A new report from media research group, McKinsey, says that the European TV broadcast market could boost advertising revenues by up to â‚Ź375 million, if more programmes tied up with a short messaging service (SMS) to allow viewers to interact.
The McKinsey study found that adding SMS interactivity to certain shows improved viewers’ loyalty and in some cases boosted the viewership of popular free-to-air TV shows by up to 20%. Since advertising rates are directly linked to ratings, well executed shows could at least preserve and perhaps enhance a broadcaster’s bottom line, says the report.
Europe is clearly the world leader in the SMS-TV market, says McKinsey. In 2003, 900 million SMS-TV messages were sent in Europe and generated $400 million for broadcasters, mobile operators and technology providers. By the end of 2005, the reports says this could easily be worth â‚Ź750 million, with broadcasters share reaching between â‚Ź250 million to â‚Ź375 million.
In a further recent survey, 58% of advertisers said they would allocate a larger proportion of their advertising budgets to channels with attractive ratings growth resulting from the use of SMS, with 46% saying they would bring new money to TV, either by reallocating it from other media or simply making new investments.
The report says, that if more than 5% of viewers interact with the show, its audience is extremely engaged and more likely to tune in again, tell friends about it and even spend money on show related merchandise. Studies show that more than 60% of SMS-TV shows in Western Europe can convert 5-15% of its total audience in to active SMS participants. When this is compared to traditional marketing campaigns they pale by comparison, with participants yield rates only averaging 3-8%, while internet advertising click through rates average 1-4%.
Currently, SMS-TV messaging accounts for less than 2% of the $22 billion generated in Europe by TV advertising revenues but broadcasters could be underestimating the direct marketing effectiveness of linking SMS to TV.
Currently, music contest shows, such as Pop Idol, account for 65% of interactions between mobile phones and TVs. Viewers send a text message to vote for their favourite song or contestant, rather than dial from a landline. The report shows that SMS-TV shopping has also captured viewers’ attention. In Germany, CDs and concert tickets can be bought with SMS text codes from Viva, the music TV channel. Viva’s management claims that the service is more profitable than some established shopping channels.
Viewers of reality TV show, Big Brother, who vote for contestants via SMS-TV, buy more show related merchandise than any other voting viewers, with 70% of teenagers who buy programme related goods, voting via SMS-TV.
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