When I was looking for an old file on my laptop, recently, I stumbled upon a report that I co-authored, 15 years ago, about interactive TV.
Digital television (as opposed to analogue TV) had been around for just over three years, and interactive TV (i.e., digital TV with a return path from the consumer to the broadcaster) for two. So, these were the early days of this exciting and promising technology, and this report was trying to make sense of early consumer reaction and the opportunities for marketers.
Some of the issues discussed in this reported have aged. For instance, we contrasted iDTV use with internet use via home PC use, rather than internet access via mobile phones because mobile internet was really slow and clunky (via WAP technology – do you remember that????). And there were no such things as touchscreens.
But other issues are remarkably current. For instance, we talk about the threats to traditional advertising. We also talk about the potential of the technology for customer profiling, customisation and targeted advertising, as well as about possible threats around privacy concerns, and about the role of permission marketing.
Drawing on early consumer reactions and the characteristics of the technology, we concluded that:
The fact that most viewers regard iDTV* as “enhanced television” rather than a completely new medium, raises the question whether they are willing to pay for interactive programming.
Similarly, we would recommend caution in forecasting future revenues from interactive advertising campaigns. The initial response rates for interactive advertising have been fairly encouraging, yet much of this success maybe due to the novelty factor rather than a change in TV viewing habits and, therefore, may not be illustrative of future success. Because TV is associated with entertainment and information rather than communication or transactions, we believe advertisers should use “soft sell” instead of “hard sell” and should offer something of value to the viewer, in order to encourage him / her to interact.
Additionally, interactivity cannot be forced upon viewers. Content producers should try to find different social uses of interactivity, in order to benefit from the fact that television viewing is often a secondary as well as a social activity. Moreover, interactive services should be user-friendly, and not compete directly with services offered via the PC.
The t-commerce** offering will be most successful for products that are well aligned with consumers’ perceptions of the TV medium. Therefore, we believe that those products and services focused on entertainment and leisure have higher revenue potential than other categories.
There are signs that women are lagging behind children and men in the usage of interactive features. We believe that youngsters could be instrumental in unlocking a potential latent interest in iDTV. Household ‘techie s’ are the first to gravitate towards iDTV and these ‘techies’ are predominantly children. It is also important to recognise that some groups of consumers are easier to reach than others, and that some viewers may never em brace the iDTV medium and its services.
Viewers have expressed high levels of potential interest in t-commerce, but there is a degree of disappointment with the current offering. As the early days of the Internet showed us, first movers can have a competitive advantage because of the economies of learning, brand awareness and the locking of important partners. However, that advantage is short-lived if the proposition being offered falls short of viewers’ expectations. Disappointed consumers are unlikely to try the service again and, therefore, it is critical to manage viewers’ expectations. Moreover, providers need to complement their online offer to the High Street offer.
Finally, it is important to avoid the temptation of merely transferring web content into this platform. First, because the profile of iDTV viewers and the usage patterns that are emerging are significantly different from those of PC users. And second because the medium has its own characteristics and limitations (it is not suitable for small print, for instance).
Replace iDTV and t-commerce with mobile internet and m-commerce, and many of these conclusions would still make sense, which, really, goes to show that, when studying technology adoption, we need to abstract from the technology and focus on the human element.
You can read the full report here.
* interactive digital TV
** television-commerce. The idea is that you would click on certain adverts or TV programmes, and be taken to the brand’s website from where you could buy the product or service in question.
Ana Canhoto 
I remember that era, although it seems to be in the dim and distant past. I suppose that in the timescales of the digital era this is indeed early history. Local cable TV companies I was talking to back then (and even as early as 1997) were all excited by the prospect, particularly for home shopping.
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Quite distant, indeed – these were the days when, if you wanted to access internet via your home PC, you had to connect a cable and use the dial up. No one could call you home, in the meantime. Remember that?
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