VivaKi’s Scheppach: 'ITV' Is Dead, But Set-Top Box Advertising's Alive And Well

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Tracey ScheppachThe past few months haven't brought a lot of positive headlines in the "advanced TV" space. The much hyped collaboration among the top cable companies to create a national interactive TV advertising sales platform broke apart when Canoe Ventures said it would concentrate solely on driving video-on-demand ads and TV Everywhere projects.

Then, last week, Adweek reported that Microsoft has pulled back on its set-top box TV ad network and considering a sale of Navic, the TV ad placement service it acquired for an estimated $200- $300 million in early 2008.

Of course, two incidents don't tell the whole story of what the challenges and opportunities actually are, as various parts of the ad industry attempt to bring digital media sales methods to broadcast and cable. To get a wider perspective on the state of digital TV advertising, we turned to Tracey Scheppach, EVP, innovations director for Publicis Groupe’s SMGx and VivaKi, who offered her thoughts on that topic, as well as the influence of social media on TV advertising.

AdExchanger: We last spoke on the day Canoe Ventures abandoned plans for a national ITV ad platform, and you told me, "ITV as I define it, is dead."  What are your thoughts on the industry reactions to what’s been going on in the space since then?

TS: I’m really surprised by the widespread fascination and the amount of misinformation associated with the news. There continues to be a misunderstanding that Canoe was focused on household addressability. This is simply not true. People also seem to think that Canoe disbanded, when it’s actually still alive with a renewed focus on VOD.

I do stand behind my statement that ITV - as I define it - is dead, but my position does require a bit of explaining to understand. First, I define ITV as the use of EBIF to deliver an interactive experience via a set-top box with an ad that a viewer can engage with using a remote. Although it is not dead yet, and there are some valuable campaigns underway, we will never see a nationally deployed ITV platform. That fact, coupled with the fact that a new technology is gaining momentum that allows TV content to be synchronized with a second screen (like a tablet, smartphone or computer), is why I believe ITV will be dead.

Maybe I am splitting hairs with my definition, but no matter how you look at it, ITV needs to be reimagined, repositioned and rebranded; we are attempting to do that at SMGx. We call it Participation TV. I have no doubt people want to have a deeper experience with what they are watching, and Participation TV answers the important question of how we go about providing that experience.

Participation TV sounds a lot like Social TV. How do you differentiate the two? And what’s the value there for advertisers?

The definition of Participation TV is simple really—it’s being able to participate with the TV content that you are watching. Social TV has been used as a catch-all phrase, but to me, it’s more than adding hashtags, posting what I am watching on Facebook or using a check-in application. Participation TV allows us to bridge the gap between the great television content, device proliferation in consumers’ homes, TV viewer multitasking, and our natural desire to be curious and connected. Participation TV is not just about sharing or being social, but also learning more about our favorite shows or collapsing the purchase funnel to allow for immediate purchase. A big part of solving the Participation TV equation actually relies on the second screen and not the TV. We have to synchronize the second screen experiences with the big screen experience.  Once we do this, Participation TV has the power to drive rich and engaging entertainment experiences that will lead to higher ratings and longer viewing duration. Participation TV will also improve the advertiser experience by driving richer and more productive advertising.

So with [SMG client] Microsoft reportedly looking to move away from Navic and the rise of Participation TV as you define it, does this mean the set-top box is on its last leg?

Not at all. The set-top box (or probably better named “return path data”) is alive and well with approximately 30 million households reporting data.  And companies like Simulmedia, Rentrak, Kantar and TRA continue to generate a lot of very interesting ideas and execute a lot of great work in this space. Regarding Navic, what I do know is timing is everything when it comes to innovation, particularly innovation in TV. Timing the market can be very hard to predict. Navic was very early to market with a solid conceptual idea. So solid, in fact, that I believe much of the intel that powered Navic will be rebirthed at a later time in new initiatives. Keep an eye out for what Xbox is doing, because it’s truly ground breaking convergence TV. And I wouldn’t be surprised if some of the fundamentals pioneered under Navic will find their way to Xbox.

Well, adding another layer of confusion to the mix is Dish. How does Dish’s AutoHop, a DVR option that makes it easy and automatic for viewers to skip ads, fit into the picture if viewers are bypassing commercials entirely?

We know the media marketplace is undergoing major change, and the AutoHop is another example of disruptive innovation within the broadcast landscape. Dish is simply trying to deliver what they believe their consumers want—the ability to choose to move past the messages that don't matter to them. Although not welcomed by the advertising industry, this is simply another example of what we know to be true—consumers are in in control.

The introduction of the DVR eliminated 50 percent of the ads in played-back viewing; while we can’t say this for certain, AutoHop will likely make that 100% for broadcast TV in homes that have it. So if we look to the future of television with the widely available AutoHop feature in the picture, there are really four possible outcomes: consumers pay more for content; advertisers pay more for spots; content is cheapened or gone; or we adopt a new ad model that is relevant to consumers (and which they welcome).  I vote for the last option!

So with the TV companies and others pursuing advanced TV in various ways, what can ad agencies do. For example, how does The Pool – the collaborative project you started a few years ago with Hulu, CBS, Microsoft and others – solve some of the problems associated with the adoption of new ad models?

The biggest lesson I have learned in the past four years of running The Pool is this: collaboration is possible and the only way we can solve the issues that confront our industry. I am very proud of the fact that we have run 13 different projects (we call them swim lanes) in seven different countries with over 100 different companies listening to 300 million consumers. The Pool is a truly collaborative effort that is helping us get to where we need to be, and it’s doing it faster.

So is there one “right” answer? Is it participation? Is it addressable? Is it better measurement? Or will the ad be skipped entirely?

There is so much “innovation” chaos in the TV/Video marketplace it can be dizzying. But when you break it down, it is quite simple. We need to do three things well: big data, better delivery, and kick ass participation experiences. Big data involves harnessing the set-top box (or return path) data and combining it with other data sources to better understand anonymous audience behaviors. Better delivery involves being able to precisely deliver the right message to the right person at the right time and in the right environment. I call it addressability. Participation experiences run the gamut from being able to choose the ad I want to watch to being able to have a deeper experience with the content (including advertising content).

Rather than worrying about one “right” answer, we need to embrace the chaos. I personally adore chaos because I love to produce order. Maybe it’s the reason I love The Container Store so much.

By David Kaplan

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2 Responses to “VivaKi’s Scheppach: 'ITV' Is Dead, But Set-Top Box Advertising's Alive And Well”


  1. K says:

    Somewhere around the answer to the second question there needs to be an editor's note that Microsoft is a major client of SMG. Or does this comment suffice?

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