June 2006 - Intelligent Innovation

As the television landscape continues to evolve in Europe, smartcard technology can help direct marketers and electronic retailers elevate the interactive television (iTV) experience and create more personalized marketing.

By Hervé Sinelle-Botinelly

For the second time in less than 10 years, the television landscape in Europe is going through a fundamental change: television is going digital.
Old “rake” antennae and bulky TV sets will soon be history. Commercially available since 1996, via the CanalSat launch in France, the digital television offer has since then, seen a two-digit growth in all the markets worldwide. With the advent of digital terrestrial television (DTT) in Europe, television is entering into a new era. Political regulations and economics have driven the market on a path to maturity more quickly than anticipated. If pay-tv offers in Europe have taken their market share, it is quite certain now that the switchover of analogical broadcast, initially set by the EC to 2012, will be anticipated almost everywhere in Europe.

In a mature market such as the U.K. market, for instance, 75 percent of the households already access TV content and programs through digital and projections show a full coverage by 2008-2009.

Digital television is a tremendous tool in maximizing the viewers’ experience. Not only through the multiplication of available channels, of course, but also through a newcomer in this landscape-interactivity.

Interactive television (iTV) is growing all across Europe and is already a roaring success in the United Kingdom. For example, over 100 interactive services are currently broadcasted across satellite pay-TV leader BSkyB’s channels. In 2004, a major advertiser, cosmetics giant Coty Rimmel, experienced great benefits of interactive TV, such as, extremely positive feedback, a huge number of samples and information requests. What’s more, in the end, the company encountered booming sales following its interactive TV campaign-not to mention a more targeted client base qualification, a reduced cost per response (qualified contact costing 27 percent less compared to other traditional campaigns), and increased awareness and brand image.

Viewers did not only watch Coty Rimmel’s commercial, but also chose to know more by visiting the advertiser’s dedicated advertiser location (DAL) on Sky, and spent well beyond the initial 30 seconds with the brand-a dream for most advertisers. Since this milestone, over 600 interactive campaigns have run through the various BSkyB channels. With interactivity, clients choose to interact and do not watch commercials passively.

Interactive smartcards are designed to allow electronic retailers and direct marketers on TV to reach and communicate with their audience on a more personal level.

Yet, with the increased transport capacity for audio/video signals comes the thorn of the digital flower. The multiplicity of channels, content and services provided through the various digital platforms (satellite, cable, IP, terrestrial and PLC) fragments the audience and dilutes the potential basin of viewers at any given moment. Thus, the big primetime show, with a massive audience, may soon become a fond memory for media planners and advertisers.

Although ads and DRTV are meant to be informative and entertaining, they are often perceived as being irrelevant, repetitive and too generalist. Media planners, creative, marketing and advertising strategists do not bear the full responsibility of this…far from it. The broadcast system is, in essence, a one-to-many or even one-to-all medium-making it difficult, if not close to impossible, to target or address a specific audience.
Moreover, the digitalization of the TV streams has triggered the emergence of new tools that make the VCR look ancient. The personal video recorder (PVR), with its embedded functionalities, allows easy time shifting and ad skipping, which dramatically impact the way commercial communication on TV has to be approached.

For instance, Verizon, Colgate and Johnson & Johnson were among the companies surveyed in a recent poll conducted by Forrester Research and the Association of National Advertisers, about 70 percent of whom believed that PVRs and Video-on-Demand services would “reduce or destroy” the effectiveness of traditional TV ads.

Empowered by interactivity where they can opt to engage in a commercial relationship-reinforced by the possibility of choosing from multiple sources and subjects through the increasing channels panel-viewers are holding all the cards and advertisers really are being forced to think of new and innovative ways to compel them to pay attention, and not just as a result of the boom of PVRs.

In this changing context, new ways of reaching TV audiences, secure their loyalty and also secure tomorrow’s funding for TV channels is more than ever a crucial issue at stake. Up until today, iTV was considered the most efficient way to get in direct touch on a close and personal basis with the viewers. Unfortunately, most of the time interaction between a brand and the viewers remained confined to the living room because, most of the times, the set-top boxes are not plugged into a phone line.

Not being able to provide feedback information through a connection, iTV applications were looked upon by advertisers and content providers as costly, yet enjoyable, “gizmos.”

A new, transportable media being able to play the role of the “missing link” between home and the “outside” world has been needed for a long time. Through this vector one would be able not only to identify the viewer in front of his or her TV set, but also to reconcile the viewer and the customer of the fast moving consumer goods (FMCG) networks. A tool was sitting there, in the homes of millions of viewers, unnoticed and underused-the smartcard reader of the set-top boxes.

Today, there are 45 million available smartcard readers installed in European homes-that is eight times as many electronic fund terminals (EFTs), point of sale (POS) units and automatic teller machines (ATMs). Seventy percent of installed digital pay-TV set-top boxes in Europe already have a spare smartcard reader and are connected to the most potent media: TV. The second slot remains so far unexploited. In the near future, 100 percent of free DTT set-top boxes will have a spare slot.

All these facts gave TV-Card based in France the idea to merge smartcards and digital TV to develop new business opportunities through the first interactive smartcards dedicated to TV services.

TV-Card has designed and developed the first solution to allow smartcards to run on the spare slot of any digital set-top box. The solution is interoperable and works on any TV middleware, as well as in other systems, including EFTs, POS units, ATMs, PCs and interactive kiosks.

Interactive services smartcards give birth to a new relationship between TV channels and their viewers. Interactive smartcards can enable electronic retailers on TV to reach and communicate with their audience differently, in a one-to-one relationship. They can differentiate from the competition by offering new generation services to their viewers and customers, secure their loyalty, and offer them premium services through privileged interactive member cards.

A new generation of membership cards have been designed to refine a brand’s or a T-shopping professional’s knowledge of its customer base and allow one-to-one CRM and CEM strategies. In addition, the technology enables direct marketers and e-tailers to store customer preferences, habits and identification. These cards are also able to interface with banking cards systems, meeting Europay Mastercard Visa (EMV) compliance. Those new membership cards run the same on any given digital TV set-top boxes and in retailing. They allow storing T-coupons and feature debit/credit functionalities, whether in euros, dollars, loyalty points or gaming points. For instance, in a loyalty scheme combining TV retailers or T-shopping channels and retail outlets, interactive member cards offer the opportunity to reward viewers’ or customers’ loyalty by gaining points that can be redeemed in advantages, free pay-per-view content, discount tickets-on TV as well as in shops. Those interactive membership cards can also be prepaid cards preloaded with money, for T-shopping, gaming.

This technology offers the ability to really “at-homize” the direct and relational marketing through television. Accessing customers at home, where they are the most receptive to marketing messages and being able to address them on a personal basis gives tremendous leverage to direct marketers’ sales strategies. Direct marketers can also benefit using iTV and smartcard technology to gather valuable data, with specifics such as consumer profiling, geographical zone, RFM index and so on.

In addition, TV direct marketing campaigns-such as loyalty/cross loyalty schemes, interactive sales promotion and sponsorships, interactive satisfaction surveys, new clients/subscribers recruitment campaigns, targeted CRM-CEM-are now made possible through these iTV services dedicated smartcards. Moreover, these cards can also speed-up interactive DRTV campaigns in filling-out automatically the needed information, and thus, incite the viewers to engage this kind of sales in eliminating the burden of providing the same information and in offering access to tailored pricing based on the purchasing history, for instance.

By integrating interactive television with smartcard technology, operators, channels, advertisers and distributors are able to create new business models for consuming the “TV product” and set a new relationship and communication with viewers and customers. The versatility of these iTV services combined with smartcards is so powerful that they can even be useful tools in giving advertisers the ability to localize content for specific audiences.

They also enable multiple new service opportunities, including providing foreign language programming to specific viewers within a network and airing commercial advertisements for local offers or discount campaigns, among others.

Hervé Sinelle-Botinelly is the founder of TV-Card in France. We would appreciate your feedback. To submit comments, please e-mail the magazine at [email protected].


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