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InContext / An inside look at the business of digital content

Will streaming help interactive tv ads stick?

November 12, 2015 | By Mark Glaser, Founder and Publisher – MediaShift @mediatwit

TV ads have always been decried as a format of the past, rarely targeted or personalized. But interactive TV ads offer the potential for demonstrable viewer engagement and feedback. And that’s the promise of Hulu’s new deal with TrueX, a unit of 21st Century Fox. Using technology from TrueX, Hulu will give viewers of Fox shows the option of watching a 30-second “engagement” advertisement instead of the approximately two and a half minutes worth of ads that are sprinkled within an episode.

It’s the most high-profile instance yet of interactive ads within streaming TV. The question now is whether the circumstances surrounding the Hulu-TrueX deal will get other networks and brands to jump on board—and make this kind of engaged advertising more the norm.

Breaking Through on Streaming
Interactive TV has been one of those Holy Grail quests that’s been tried and failed for years. The problem, however, is that marketers have been looking at the wrong screen when it came time to developing interactive ads. It was understood that some people were cutting the cord and streaming online content onto a “proper” television screen through an Xbox or Roku. But taking advantage of the use of laptops, mobile and tablet devices was not a key strategy. That’s why some of the earliest attempts at interactive ads bombed.

The point now, however, is to utilize the benefits of digital video, as Joe Marchese, president of advanced advertising products at Fox Networks Group and founder of TrueX, told the L.A. Times. “Digital video is an on-demand, non-linear medium, and having an ad format that fits this experience is a win for advertisers, publishers and viewers alike,” he said.

TrueX had already tested interactive ads on streaming sites before Hulu. This past May at the upfronts, TrueX reported on one such trial with the TV show, ”The Mindy Project.” They found that the typical viewer clicked 4 times in the ads, spending 52 seconds in the unit, with a 2.9% clickthrough rate. Plus the ads had a 96% completion rate.

Another example of interactive ads fitting well was during the Game Awards — an online-only awards show for videogames. During the show last year, which attracted about 2 million online viewers, users were able to click on ads during the show to download the different games that were nominated. For one of the games advertised during the show, sales “increased by 15 times during the weekend the awards show aired, producing seven figures in revenue for the game over that period,” the New York Times’ Nick Wingfield reported.

In-Stream Purchase Unit
In the same vein, Hulu announced last year moves beyond traditional video ads with an “in-stream purchase unit” with Pizza Hut. Consumers can place an order within the ad itself before returning to whatever content they were viewing. There’s also a “360” video ad that will let users pan around through a 360-degree viewpoint within the ad. And the point of these advertisements was to get the tactile response of consumers watching on different mobile devices.

While Fox is the only media company allowing these new ads on Hulu right now, TrueX is also open to servicing the entire industry with these ads, opening the door for ABC, CBS, Viacom and other organizations to perhaps learn from Fox’s example.

“This type of attention transfer lifts all boats,” Jamie Auslander, TrueX’s VP of research, told AdWeek in May. “It’s as impactful as six video ads.”

Other media outlets will likely take a cue from Fox only after learning how these 30-second advertisements play out among viewers. But if TrueX has its way — and if its previous studies on this kind of advertising hold true — the ads will be a hit.

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