Backchannelmedia

Response Magazine, October 1, 2000

Is Interactive TV Coming of Age?

By B. McCrea

Ask Michael Kokernak what he thinks about the way DRTV media buyers are preparing for the future and he has a simple answer: "They have their heads in the sand." What this president of Backchannelmedia in Boston is trying to say is that the industry is dwelling on Web sites as the medium of the future, while it should be focused on interactive TV instead.

"Web sites are not going to be the answer to the DR industry," says Kokernak, a media buying specialist for both traditional and interactive television. "There's no impulse in a Web site, but there's an impulse with interactive TV."

According to Kokernak, interactive television (ITV), much like the Internet, can gather data about users' (cable subscribers'), advertising and programming preferences. This data will help the ad sales department create media plans that result in greater, and more effective, reach and frequency numbers.

It works like this: In order to target consumers, the interactive advertisement is routed to a profiled set-top box, partly based on the data received from the set-top's "cookie." The "cookie," which observes and records the browsing patterns of the cable subscriber, is a small text file with a unique identification number that is stored on each subscriber's set-top box. Hypothetically, the harvested data from the "cookies" will be routinely routed to the cable end and eventually the ad sales department, which will then analyze and target cable ads based on past cable subscriber usage patterns.

For the DRTV media buyer, Kokernak says, interactive media buying will allow for more focused audience targeting. "There will be a shift over the next five years of disciplines that are currently within a media buying organization, and it could be monumental," he says. "Interactive advertising can be addressable down to the consumer, which means that media buyers who are used to buying $10,000 half-hours on CNBC may now be dealing in pennies or even in fractions of a penny on delivering an advertisement." One of the big advantages of interactive TV, Kokernak says, is that it eliminates the need for a telemarketing company. "There's also less of a chance for human error once the consumer has made the decision to purchase," he says.

Presently, interactive TV is being rolled out in limited markets around the United States, Kokernak says, AT&T, which makes up about 30 percent of the nation's cable subscribers, recently announced that it was pushing the launch of its own ITV efforts up to the year 2001.

"Right now, there's a great deal of money being invested in interactive TV, and we're just at the beginning of the rollouts," Kokernak says. "But the technology is so different and so new that companies are really just working with it and experimenting with it at this point."

To succeed in the medium, once it does kick into gear, Kokernak says, media buyers will have to break through the traditional mindset that everyone looks for the high-dollar commission on an infomercial. And while the buys will certainly be lower, he says that automating the buys, so they can seamlessly be served out to consumers, will make the task easier for buyers. "As long as it can be automatically served out to consumers," he adds, "then they really only have to input and manage the buy."