Satellite Operators Embracing Interactive Advertising

Satellite operators are leading the charge in the Interactive TV Advertising arena, according to top executives from direct-to-home operators BSkyB and Multichoice. The companies are being very progressive, providing strong platforms for advertisers to exploit, the executives said during the Interactive TV Advertising show, held in London May 23.

BSkyB

Sky Media, which has more than 8.1 million subscribers, is seen as a pioneer in terms of Interactive Advertising (IA) on satellite platforms.

“There were 724 interactive campaigns in 2005,” said Nick Milligan, managing director of Sky Media. “In 2002, it was 223. Despite the constant growth, 70 percent of campaigns are run by advertisers who have used it before.” Milligan echoed many sentiments in the show that IA was moving into the mainstream and no longer can be seen as a niche medium by advertisers.

BSkyB is adopting a multi-platform approach for delivering content, which will offer more opportunities for innovative advertising campaigns, Milligan sad. He told the show that the operator now has more than 100,000 subscribers on mobile service through its deal to offer content to Vodafone‘s 3G customers, and more than 12 million sessions had been streamed to handsets.

Rob Leach, head of interactive services at BSkyB echoed Milligan’s sentiments, adding that IA had proved itself throughout the last six years. Leach said the criteria that advertisers judged IA was changing and moving more toward the impact on the brand rather than just response.

Sky has a very innovative approach in terms of measuring the effectiveness of IA, Leach said. The operator has set up a panel called Skyview which enables the company to track how customers in 33,000 homes are using Sky’s services. This enables BSkyB to measure data such as how many people have been interacting with IA campaigns and how long they spend in dedicated advertiser locations. Leach said that the average time spent in a dedicated advertiser location was nearly three minutes, far more time than the traditional 30-second commercial, he said.

Multichoice

Multichoice, the leading pay-TV operator in Africa, has more 1.6 million subscribers and has been one of the most progressive companies in embracing interactive advertising. Sharon Gray, iADS portfolio manager at Multichoice South Africa, revealed the operator now has 31,000 personal video recorder (PVR) customers and intends to use the PVR to drive its IA campaigns.

One of Multichoice’s biggest clients has been the Emperors Palace Casino, which ran a huge campaign to inform people about its name change from Caesar’s Palace. Emperors Palace used various media to drive people to a dedicated advertiser location on the Multichoice platform where they could find learn more about the casino.

Multichoice also has run successful campaigns with a number of companies in South Africa, and the operator is beefing up its interactive approach, Gray said. The company’s growth in the PVR market has exceeded expectations, with Gray revealing that Multichoice had to pull marketing for the PVR in February, as there were not enough boxes available to meet demand.

The operator is also looking to enhance its multi-platform strategy and is running a trial with leading South African telco Telkom SA to see whether it is feasible to launch a TV-over-DSL service in South Africa. The service could launch as early as next year, she said.

Multichoice also is taking part in a trial of digital video broadcasting – handheld service where select users will be able to watch the World Cup on handsets.

DirecTV

DirecTV has also embraced interactivity. The operator, which has around 15 million subscribers in the United States, began deploying interactive receivers in 2004 and has been working with NDS to enable a strong interactive approach throughout the last two years.

DirecTV adopted a unique strategy in terms of working with interactive advertisers, setting up a channel where viewers can go to watch short- and long-form content provided by advertisers. The channel runs continually, and DirecTV has an in-house team focused on putting together ads.

Tyler Slocum, director of advanced services and content at DirecTV, said the operator’s strategy was to work with main advertising clients and experiment with this new approach. The operator created the advertising development partner program which enabled DirecTV and advertisers to experiment and test new interactive ad tactics. One of its major partners is DaimlerChrysler, which launched a comprehensive IA campaign at the end of 2005. DirecTV also has worked out deals with Proctor and Gamble and Bank of America which will see them launch IA campaigns later this year, he said.

Slocum also said the operator’s launch of the high-definition PVR will help drive IA, as DirecTV is looking at putting ad links in the user interface and will use the box’s broadband capabilities to boost its content proposition. “The [high-definition] DVR will have broadband capabilities,” he said. “We know there around 5 million DirecTV subscribers with broadband. We are also planning a trial later this year. It will augment our satellite content delivery. We need to continue to drive awareness of iTV ads in the United States. We aim to deploy robust DVR based advertising. We want to explore and develop broadband opportunities. It conserves satellite bandwidth and adds a strong return path.”

–Mark Holmes

Contact, Robert Mercer, DirecTV, e-mail, [email protected]
Robert Fraser, BSkyB, e-mail, [email protected]