Janani Krishnaswamy

Your 30-second television commercial is all set to get a digital makeover as the entertainment market gets restructured in the light of technological advancements. TV advertising is migrating into dynamic, interactive and personalised forms. The age of plain vanilla television is over. If cable TV and DTH made your idiot box do things better, the latest entrant in the television broadcasting scenario - the IPTV has much more to offer combining the richest possibilities of television with Internet. In plain terms, it offers television broadcasts through broadband, instead of the normal cable. Much of the world is already adopting all-digital broadcasting and North America and Europe are considered to be the most developed TV markets in the world. According to UK-based research firms, the global IPTV market is expected to reach approximately 50.5 million subscribers in 2010.

IPTV is in its nascent stages in India and currently, there are just a handful of service providers. While Airtel launched its service in NCR and Delhi in January this year, it might launch services in other cities in a phased manner. MyWay tied up with BSNL and MTNL a little later and is in the process of rolling out services across the country. Reliance was also out with its IPTV services, early this year. In Bangalore, ACT Television launched its IPTV services in June across the city. As the industry is still in a fledgling stage, IPTV providers are disinclined to reveal market statistics. ACT Television, for instance, says “it would be difficult to quantify its percentage share as against operators like DTH and digital cable, who have been in existence for much longer.”

However, the number of IPTV subscribers has been increasing worldwide almost in sync with the penetration of broadband network capabilities. According to IDC, India is expected to clock some 9.66 lakh subscribers by 2011, expanding at a compound annual growth rate of 156.8 per cent. The research firm expects 15.9 per cent of all the residential broadband subscribers in the country to switch to IPTV by end-2011.

ACT Television’s service

While advertising on IPTV is yet to take off in India, the technology is there to be exploited — simply because it is designed to factor in viewer’s likes and interests and the advertiser can target the audience that it needs.

Advertising on IPTV has great potential to be dramatically different from the ‘traditional’ TV experience, as the technology enables content to be targeted on the basis of various factors. “If there’s one lesson we have learnt from Internet advertising, it’s that relevance is key,” says Vikas Singh, Chief Marketing Officer, Telemedia Services, Bharti Airtel. “If an ad interests you, you are more likely to click on it. While relevant ads have been somewhat successful online, it’s TV that’s been the real challenge. As IPTV is able to pinpoint the audience that would be interested in a particular product, the advertiser can simply run those ads for that market only.”

The technology offers advertisers the benefit of knowing just who is watching and when, so providing a more accurate reporting method and a detailed audience measurement. Singh adds that “it is also possible to discover viewing behaviour in ‘real time’ without the consumer having to give away any potentially sensitive personal data. In this way, the service provider can tell whether the IP address associated with a particular device is consistently watching a genre of programmes. This information can be used not only to offer certain kinds of content, but also to help service providers offer advertisers a means through which they can deliver more relevant advertising.”

As the concept of IPTV advertising is fairly new globally; very few examples of it exist. Referring to the world’s first targeted TV advertising campaign over IPTV that took place in late 2007, involving UK broadcaster Channel 4, the UK IPTV network Inuk, media agency Mediacom and Packet Vision, Singh of Bharti Airtel says, “They have been experimenting with addressable advertising through deals with EA Games, Rustlers Burgers, Weetabix and Cadbury, and a further 26 brands.” Elaborating on one of its creative strategies, Packet Vision of UK says “Students could click on a £5 discount ad for Rustlers, print off a voucher and spend it at the student union.”

Singh says that in the Indian scenario “service providers are looking at what ad insertion platforms they should install, and are beginning to educate advertising brands and agencies on what could be offered.” Thus, it may take a little while before IPTV becomes an individual advertising platform. As IPTV subscriptions grow in India, advertisers and providers alike will begin taking notice of the benefits offered by the technology.

Local operators refused to comment for fear of breach of contract when asked to suggest any present or future advertisers. ACT Television representatives say, “The reason is that no ads have gone on air yet and are still in the process of talks between the advertiser and the MSOs (Multiple System Operator)”

Singh from Airtel says, “From what we have seen globally, streaming ads on IPTV is not as easy as it may seem. There are often more parties involved than just the advertiser and operator. Studios, aggregators and sometimes even film directors have a say in what can be done with the channels or movies being shown. Coupled with the more stringent regulations on TV commercials, putting targeted/interactive ads on IPTV can become a veritable minefield.”

On the other hand, he believes the costs could be high and the privacy of the customer could be compromised. It is too early to talk about the success of advertisement and the behaviour of the customer towards it.

Sunder Raju, Managing Director, ACT Television, says IPTV offers several variations on the dynamic ad insertion concept. “Video-on-demand ad insertion would involve inserting advertising before, after, or even during on-demand programming which is relevant to the content.

Dedicated advertising channels could be offered that go beyond product placement and sponsored channels, where operators could offer advertisers their own channel or position in a shared advertising channel. There’s also the possibility of search and recommendation, perhaps in partnership with an Internet search engine.”

However, IPTV makes a great platform for targeted and personalised advertising as it has the potential to provide advertisers different options. For one, advertisers will also have the option of addressing only relevant viewers, and therefore will be able to select the customers they want to reach out to because the service providers can not only provide customer demographics but also share customer usage patterns with them.

Elaborating on how this works, Raju of ACT Television says: “For example, a viewer who is clearly a regular user of Internet on TV and watches travel-related videos on it - but never watches any children-/family-related videos - could be targeted to receive ads about holidays but de-selected to see any ads aimed at families/children. Not only this, through ‘frequency capping’, it can be ensured that a viewer only sees an ad a certain number of times.”

Also, dedicated advertisement channels can be created, through which the ads can be viewed on an ‘on-demand’ basis. This would prevent viewers from skipping the ads and will also be an effective way to reach out to the targeted customers as it would ensure they view the ad at their convenience.

These channels could go beyond product placement and sponsored channels, where operators could offer advertisers their own channel or position in a shared advertising channel. Airtel’s Singh says, “At this stage one has to bear in mind that television viewing in India is still a very passive process and it is unlikely that the majority of consumers are going to substantially change the way they interact with television over the next few years. While there may be some consumer demand for services which, for example, would allow them to follow up on an ad which they liked, akin to ads on the Internet, by and large, people want to watch television not shop.”

However, there are more advantages than challenges when it comes to this technology. Raju of ACT Television says, “It increases opportunities for retail advertising, where a low-profile merchant will also be able to reach out to his customers through television. The reason behind this is that IPTV technology runs via cable.” Therefore, for a potential advertiser, IPTV has a higher accessibility through cable operators, who are easily approachable.

The interactive nature of this technology makes it truly advantageous for the advertisers, unlike in the current scenario where a viewer sees an ad, then goes to the store to find out more about the product/service and then finally closes the deal if interested; through IPTV, a viewer can get detailed information instantly and to a large extent will also be able to close the purchase there and then. This platform will therefore, increase the rate of impulse purchases.

IPTV as an advertising medium has the capability to record if a particular ad was watched, how many times and by how many viewers. Tracking viewership thus gets easier.

Considering the current scenario, the challenges that advertisers might face will more often deal with bandwidth issues and the constraints of service providers.

As of now the rates are calculated on a ‘Per 10 seconds’ basis.

“However, as IPTV has the potential to provide the exact demographics of the viewers and can also record the actual viewership of an ad, the revenue system might become viewership-dependant,” adds Raju of ACT Television. The flip side of this could be that service providers might charge a premium for the data they offer advertisers, which might end up becoming an expensive proposition for them.

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