Can interactive TV and advertising find an audience?

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Hulu has experimented with letting viewers buy movie tickets directly from an ad. (Hulu)

As TV viewing moves toward digital platforms and traditional television makes advances, interactive features are increasingly popping up. Time will tell if consumers will love it or leave it.

Interactive features built into either programming or advertising can serve multiple purposes including strengthening engagement and lengthening viewing time; and monetizing content through e-commerce.

Digital giants like Amazon and Facebook both have features built to get viewers more deeply involved in the viewing process.

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Facebook’s Watch platform has been sinking a lot of money into programming particularly for news and sports. Earlier this month, Facebook announced news show deals with ABC News, CNN, Fox News and others, and late last year Facebook reportedly earmarked a “few billion dollars” for sports rights. It’s all in service of luring more viewers to Facebook Watch, where interactive social features like Watch Party, a new feature that lets groups of users watch videos at the same time and chat about, will hopefully keep them around.

RELATED: Facebook Watch will let users create their own live game shows

“So what we're seeing so far is that a bunch of the content that has come onto Watch is good and is working and people watch it. We're continuing to treat the product to emphasize that kind of content more while building more of these social features,” said Facebook CEO Mark Zuckerberg during his company’s most recent earnings call. “I'd say it's still pretty early overall in terms of the growth of this, but it's clearly an area that's important where I think we have something unique that we're going to bring to make this successful.”

This week, Facebook also announced new interactive features that will allow creators and publishers to add polls, quizzes and challenges to video, effectively allowing for the creation of game shows.

Plenty of other companies besides Facebook are pouring time and money into building interactive elements.

Netflix has been busy creating choose-your-own-adventure style narrative videos, typically aimed at younger audiences, for its service. Amazon, as part of its new streaming deal with the NFL, will offer live Thursday Night Football games on its Twitch platform. The company could be planning some interactive chat features for those broadcasts similar to what Twitch already offers during its popular video game streams.

More traditional providers are getting in on the interactivity, too. During NBCUniversal’s broadcast of the 2018 Winter Olympics, parent company Comcast populated its X1 platform with lots of customizable and voice-activated interactive elements to allow viewers to follow multiple events simultaneously.

ATSC 3.0, the next-generation TV standard currently under development by several large broadcast groups, includes several interactive features. Proposed applications for interactive elements in broadcast television include personalized viewing through alternate selectable camera angles and interactive menus that enable things like localized news and weather, interactive educational programs, and relevant deals and ads.

In fact, interactive advertising is one of the most bustling areas of development around the more hands-on viewing space.

A Brand-New Environment for Ads

Eric John, deputy director of the Interactive Advertising Bureau’s (IAB) Digital Video Center of Excellence, said the rise of OTT and connected TVs is helping take the big screen TV experience and make it compatible for digital advertising, including interactive ads. Indeed, Leichtman Research Group recently released a new study that says 74% of U.S. TV households have at least one internet-connected TV device, and 29% of adults in U.S. TV households watch video on a TV via a connected device daily.

“[Connected TV] creates an environment for interactive ads that wasn’t possible before,” John said.

It’s an environment that many companies are preparing to take advantage of.

AT&T has been offering up details about the kind of ad business it can build now that it has Turner’s inventory combined with its troves of customer data. AT&T CEO Randall Stephenson outlined some ways that AT&T can use its networks to present advertising in different ways. He said AT&T can serve short, targeted ads on the television when it knows viewers have a smartphone in their pocket, and allow them to further interact with the marketing while not interrupting the programming on the big screen.

“These are the kind of things that are going to be worked aggressively to change the advertising business, not just to try and create additional yields,” Stephenson said.

Last year, Nielsen’s Gracenote partnered with Connekt and Ensequence to leverage its Video Automatic Content Recognition (ACR) technology and allow marketers to customize ads to present special offers, social media elements, sponsorships, discount codes or promotions.

Ad tech firm BrightLine has spent the last few years working with various media companies on interactive ads. In 2012, the company partnered with DirecTV to develop interactive liquor ads. In 2014, the company partnered with ActiveVideo to build interactive ads that could work on legacy pay TV set-top boxes. Earlier this year, the company teamed with NBCUniversal to run interactive ads during its coverage of the 2018 Winter Olympics. And just this week, BrightLine added voice recognition capabilities to its OTT ad platform, allowing it to detect voice assistants and serve relevant prompts.

RELATED: NBC teams with Brightline for interactive ads during the Olympics

"As TV voice assistants become increasingly sophisticated and integrated with our viewing experiences, so too must we integrate them into our ads," said Robert Aksman, BrightLine's Chief Strategy Officer, in a statement. “This is only the beginning as we develop custom skills, and deeper connectivity and awareness with IoT devices on the same network as the user's TV.”

Other firms like Innovid and TrueX are working on similar solutions.

Cable operators have tried technologies like EBIF and tru2way to get interactive ads onto TV screens, and smart TVs use ACR technology to display HTML5-based applications and ads on the screen.

With no shortage of interactive television elements out there already and many more to come, the question becomes how will consumers respond and react to the new features?

Will interactivity find an audience?

Interactive TV, video and advertising is not a new concept.

Interactive ads have been present on the web for years as marketers have searched for ways to do more with the standard banners and boxes available.

The idea of second screen viewing has been around for years and while it’s not going anywhere, it’s becoming less about big-ticket apps built around specific entertainment properties. Last year, eMarketer said that 177.7 million adults regularly use a second screen while watching TV. While 46.2 million of those people access content related to what they’re watching, 131.5 million people are doing unrelated things like texting or social media with their second screens.

But the wave of interactive features currently cropping up are less about the second screen and more about engaging directly with what is happening on the primary screen.

Mike Goodman, director of digital media strategies for Strategy Analytics, said the key to interactivity with TV is to have it enhance rather than detract from the programming.

“If I’m watching a show, I’m not going to click on something so I can go buy product X,” said Goodman. “You’re trying to get me to do something that’s diametrically opposed to what I’m doing at this time.”

He said that niche content like makeup tutorials on YouTube and interactive advertisements are good spots to insert e-commerce opportunities, but that lean-back entertainment experiences like broadcast television present a tougher challenge in terms of getting viewers to engage with on-screen interactive elements.

Goodman said that features like interactive chat and on-screen prompts with additional information work well for live sports, particularly on social platforms like Facebook and Twitter that have been investing more in sports broadcast rights. He also said social platforms are typically accessed on devices like smartphones and tablets that lend themselves better to interactivity.

“Those are things that we click on. We’re not just switching on a broadcast channel,” Goodman said.

Ultimately, he said engagement-driven interactive elements fit better in live television and video, while interactive elements involving e-commerce are best left within advertising.

Interactive TV ads have been around for more than a decade, but they could be hitting a late-stage growth spurt. Peter Naylor, senior vice president of advertising and sales for Hulu, told Beet.TV that demand for interactive ads is trending up.

“I think we’re at an inflection point because my volume of orders for all of last year I’ve already booked year to date. That’s 200, 300 percent growth. Very smart growth,” Naylor said.

“So I think as people, viewers in particular, continue to expect that they can interact with TV ads, you’ll see marketers take advantage of the opportunity. It’s a real opportunity to go beyond a conventional 15 or 30 and I don’t see why it shouldn’t continue to go up and to the right.”

IAB’s John said there is rising advertiser interest in new ad formats like shoppable video, for example, ads that can use geolocation to sell things like movie tickets.

In terms of consumer interest, John said it’s still a new thing for viewers, but their receptivity is being seen on ad-supported platforms like Hulu, and features like voice activation make for a much more dynamic interactive experience.

“It’s early days still and the truth is consumers, in certain demos, might be used to thinking of TV as a passive experience,” John said. But John said OTT is naturally a more active experience for users.

John said IAB will release research later this year on interactive ads. For now, he said, IAB is hearing anecdotally that marketers are still in the test and learn phase with interactive ads. But he said that interest in the format among advertisers is second only to six-second ads.

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