Promotions | March 2011 | By Jordan Melnick

Coupons on TV?

New technologies have essentially killed traditional TV advertising, but an interactive solution may bring the medium some new life.

Coupons may one day be available on interactive TVs.
image used with permission.

Interactive television, or iTV, might not be the next big thing in restaurant advertising. But with TV technology continuing to evolve and incorporate greater interactivity, it might be the next big thing after the next big thing—especially considering that the technology seems uniquely suited to restaurants.

Interactive television has many definitions. Simply using a remote control can be considered interactive, but an updated definition includes TV that offers live Twitter streams that coincide with large television events, like the Super Bowl. Then there’s the interactivity contained within television sets themselves, which today commonly includes the ability to record shows and order products with the click of a remote.

A basic iTV advertisement might be a message that pops up on the screen during a quick serve’s commercial and offers to send viewers a coupon in the mail if they click “OK.” On its face, this is potentially a very powerful marketing tool for quick serves, which stand to gain a lot from monetizing consumer cravings.

Founded in 2008 by some of the country’s biggest cable operators to make television advertising more engaging, Canoe Ventures allows national brands to offer coupons to TV viewers in exactly this way. “There’s been tremendous interest from the [quick-serve] category and the restaurant category” in iTV, says Bruce Dennler, senior vice president of agency relations at Canoe Ventures. “The ability to put a coupon into somebody’s hand is important, and this [technology] would allow quick-serve national television advertisers to deliver that coupon through the television.”      

Despite the potential for restaurants, Canoe Ventures has no restaurant clients, suggesting the industry may be hesitant to invest its down-economy dollars into a technology that has been the “wave of the future” since the early part of the last decade.

“I worry about being too negative about this technology,” says Erik Thoresen, director of research and consulting for Technomic. “But there was a huge buzz about interactive TV about five or six years ago, and it kind of died down. Now it has come back, and it’s come back at a time when we really have the infrastructure to actually implement something. But there’s just a couple of loose ends that I think will hold the technology back.”

One of the loose ends, Thoresen says, is the lack of unification in the iTV market, with different television brands providing different ways for viewers to interact with the Internet.

“It’s not very user-friendly,” Thoresen says. “And because it isn’t very user-friendly, it’s very difficult for a restaurant chain to scale [a promotion] up on an interactive platform.”

Thoresen says he expects some restaurants to begin leveraging existing iTV technology, “but it’s probably going to be limited to pizza chains—folks who offer delivery nationwide.”

In fact, Domino’s was experimenting with the technology last decade, but company spokesman Tim McIntyre says the experimentation stalled after the individual in charge left the company.

The restaurant industry’s apparent low level of interest in iTV could be attributed to a technology overload. At the height of the Internet age, the technological breakthroughs are coming at 4G speed, even as advertising budgets have downsized in recent years. On top of that, certain tech products, like the iPad, smartphones, and social media networks, have a near stranglehold on the investment dollars of businesses anxious to remain relevant into the 21st century.

“This technology would allow quick-serve advertisers to deliver that coupon through the television.”

“I think we’re going to see more restaurants diverting their money to location-based apps for smartphones before they would divert it to iTV,” Thoresen says. “We’ve also seen a huge spike in investment on social media. So I think iTV really takes a secondary position to those areas of investment.”

If the headwinds remain strong for iTV, there is definitely a tailwind for what Zimmerman Advertising executive Scott Thaler calls “interactive with television,” meaning the average viewer’s increasing tendency to be surfing the Internet or using a smartphone while watching television.

While this may seem a further erosion of television’s relevance, Thaler and others say this shared entertainment experience is helping television stay relevant in the Internet age. Basically, when viewers divert some of their attention from the Lost finale to tweet about the Lost finale, they are conditioning themselves to interact while watching television. In other words, what has always been a lean-back experience for couch potatoes is becoming a lean-forward experience for a restless generation.

This evolution, Thaler says, might pave the way for the success of iTV advertising.

“The combination of Internet and broadcast is becoming second-nature to consumers,” he says. “If we can get consumers used to accessing additional information about the brand or the shows they are watching, we will see a greater acceptance of couponing and ‘get more information here’ options.”

Still, consumers’ unfamiliarity with iTV technology is only one issue. There is also its limited functionality. For example, viewers who accept a coupon from a Canoe Ventures advertisement get it through snail mail because the technology does not support “e-mail fulfillment,” Dennler says.

And even though Canoe Ventures’ board is stacked with former cable company execs, iTV skeptics like Richard Laermer, author of Punk Marketing and 2011 Trendspotting, question whether cable and broadcast networks are ready to get on board with a technology that so fundamentally alters the TV-watching paradigm.

“I think it’s a great idea,” Laermer says. “But I don’t see the networks and carriers buying in. It’s the culture. Interactive distracts from advertising and they think, ‘They’re not going to see the show, and that’s not good for us.’”

The skeptics of iTV might differ in the odds they give it to survive in a competitive tech market, but they seem to agree that the technology has a way to go before it revolutionizes the restaurant industry in the way smartphones, iPads, and social media are.  

“It seems to be a never-ending saga for interactive TV,” Thoresen says. “People are really excited about it, but the stars aren’t aligned yet. It’s a matter of whether it’s a big enough priority compared to all the other priorities out there to put it front and center for restaurants.”

Comments

We have been running iTV Ads for years... and you don;t need any special technology. Text BURGER to 12345. Mobile and TV work great together, we see over 1% response rate and over 50% redemption rates!

"New technologies have essentially killed traditional TV advertising." What? Has the writer of this article seen the data on TV ad spending lately? Nothing could be further from the truth. And nothing in the article provides any basis for that claim whatsoever. Come on, QSR. It's one thing to get on board with a new medium, but it's another thing altogether to erroneously give your readers the impression that the old media are dead when the opposite is true.

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