Smart TV is a new growth opportunity for digital.  A TV is the ultimate shared device for watching videos and viewing large images from the comfort of the living room, rather than hunched over a 15” laptop. Certain types of content are best viewed on a TV and there are already several million smart TV’s in the UK – globally, the market is forecast to reach 119m smart TVs by 2014.

Smart TV’s have internet access, allowing consumers to use their TVs as a portal for online services. These TV’s allow email and web surfing, and support social networks and applications like Twitter and Netflix, making the TV more useful, and responsive to consumers’ wants and needs. As personal media is increasingly stored in the cloud, enabling consumers to stream their chosen media at their convenience becomes ever more important.

Audience patterns are already changing, as people spend less time watching scheduled TV and more time watching catch-up and other non-scheduled services. TV channels are beginning to offer shows on smart TV, and its growth is set to upset traditional broadcast business models, as the TV becomes more of a home media hub. With connection rates hovering around 60% of connected TV’s sold, there are however challenges for brands.

Like mobile, there are a multitude of platforms and the complexity of the market has been slowing brand adoption. In mobile, brands could be paralysed trying to prioritise iPhone, Android, Windows, Blackberry or Nokia. Similarly in TV the challenge lies in deciding between Samsung, LG, Philips, Sharp, Opera and Google TV.

TV App Agency’s new technology Engine provides a solution to this problem – the engine allows developers to create TV apps for many different TV platforms from a single source of code. The engine is offered as a cloud-based software as a service application.

The TV App Agency Engine shifts the challenge for brands from the technology to the content, providing a unique opportunity for brands to launch their own TV channel. Instead of paying rent to a TV or satellite broadcaster, you can create your own channel and launch it in the app store of a smart TV.  Most importantly, as the Engine provides a cross-platform compiler, it can be done for a reasonable price while offering maximum reach across smart TV platforms.

To prepare for this study, Forrester conducted phone interviews with executives at 12 leading digital agencies. The interviews covered each company’s use of rich digital media, the challenges and benefits companies were experiencing from using it to address client needs, and what the executives thought the future of the rich digital media landscape looked like.

Key Findings

Forrester’s study yielded the following key findings with respect to the use of rich digital media:

• Advertisers are turning to more engaging forms of rich digital media to deliver against consumer expectations.
• Rich digital media drives engagement with nonlinear interactive storytelling and custom experiences.
• Agencies with in-house digital media capabilities and expertise have competitive advantages.
• Agencies plan to expand digital media production capabilities to prepare for future growth.

For Advertisers, Engaging  Consumers Online is Harder Than Ever

Consumers today are comparing content on the Web with the latest Hollywood blockbuster, console game, or television show. As a culture, we want to be entertained and expect the content we consume on the Web to be something of value, such as a custom digital experience or an offer tailored to a specific interest. It takes much more to garner the attention of a potential or existing customer, and that creates a challenge for advertisers. A vice president at one of the participating agencies described it this way: “Advertisers are operating in a highly competitive marketplace, where consumers are reading less [and] comparing more, and the typical web article or content is not being read. Being able to communicate product benefits in a succinct and engaging way is crucial.” The bar has been raised for engaging consumers online because:

• The Web is cluttered with content. Consumers face a tidal wave of content that is competing for their valuable attention online. Within the next five years, US advertisers will spend $77 billion annually on email, display, mobile, search, and social to try to engage these consumers online, so clearly advertisers are facing an increasingly cluttered online advertising landscape (see Figure 1).1 Websites are filled with advertising, videos, text, and social media messages. To beat the clutter and engage with increasingly overwhelmed audiences, advertisers are turning to rich digital media.
• Consumers are accessing content across multiple devices. More than half of the 177 million US adults who are online have two or more different types of devices connected to the Internet, and one-third have at least four.2 There is a wealth of opportunity for advertisers to engage consumers across multiple devices. However, it requires brands to be present across multiple touchpoints. One agency is focusing its connected device strategy on delivering “all the content you need to make an intelligent decision on the screen at one time.”
• TV and film keep raising the bar for consumer expectations of digital media. All of the agencies interviewed for this study attribute the growing demand for rich digital media to feature films, gaming, and television. “Clients point to examples in movies and television and ask us to create a similar experience for their brands,” said one agency. In addition, movies like Avatar and Toy Story deliver engaging viewing experiences that heighten consumers’ overall expectations of digital media. Creative and engineering talents — in-house and consultative — with motion-picture and television experience are highly sought after for projects by agencies.

Interactive Marketing Spend Will Net Near $77 Billion By 2016

Advertisers Are Embracing Rich Digital Media

Rich digital media helps advertisers to break through the clutter of the Web. As one executive creative director at a leading agency declared: “Being able to show different ways for consumers to engage with products, [and] letting them understand what differentiates [their products] from the rest of the market, is crucial. And just calling that out via text boxes really doesn’t work. Consumers are so much more aware now; they can get as much text as they want from blogs and reviews.”
Every agency interviewed for this study confirms that rich digital media creates more engaging experiences online, compared with other media. “balancing art with science and function with entertainment.” This type of media empowers advertisers to tell richer brand stories, drive deeper engagement, and ignite conversations on social channels like YouTube and Facebook. It enables more online exploration that leads to enhanced experiences that consumers can customize and personalize. These experiences increase fundamental engagement metrics like time on site and lower metrics like bounce rates.

How Advertisers Are Using Rich Digital Media Today to Drive Engagement

Rich digital media has a wide variety of applications. Our study found that agencies use it in the following ways:

• Virtual photography. Advancements in technology allow agencies to use digital models and computer- generated images (CGI) to replace the expensive process of photographing real objects or environments. One agency explained, “I can save time and a tremendous amount of money by using CGI and digital models.” CGI also provides the benefit of being more flexible and adaptable to cross-platform applications.
• Animation and motion graphics. By animating elements, advertisers can bring stories to life. For example, “Sometimes you want someone to jump or make a car spin,” explains one interviewee. “So we will take a static model and apply all the kinetics, animations, and physics on top to make it look real.”
• Interactive display. Interactive touchscreen displays are appearing more frequently in retail outlets and public places like bus shelters in San Francisco and subways in South Korea. It allows advertisers to engage audiences at point of sale and out of home. While this exemplifies a growing global trend, there are many other use cases for interactive display online such as rich media banner ads on a website.
• Product demos. Agencies use rich digital media to create immersive product demonstrations for manufacturers and retailers. These demos tell a much richer story about the product and illustrate key differentiations from competing products in the market. For example, one agency used 3D technology to showcase the uniqueness and design of an athletic shoe by allowing consumers to interactively spin it and see it from all angles.
• Game-like experiences. More than 340 million people play social games monthly, and gamification — the application of game mechanics to nongame play — is being leveraged by advertisers to drive deeper engagement on web and mobile properties.3 Agencies can use rich digital media to enhance the game-like online behavior.
• Social media drivers. With rich digital media, consumers can customize and personalize content, share their experience online, and spark conversations on social channels like Twitter, YouTube, and Facebook. “If you create something of value for the consumer, the consumer will share it,” affirmed an interviewee for the study.
• Online and mobile advertising. Rich digital media is rapidly pervading online advertising on the Web, as more advertisers want to stand out in a crowded web environment. Video advertising is the fastest- growing segment within online advertising, and publishers are opening up new online ad formats enabling much richer experiences and page takeovers. With the ubiquity of mobile and the soaring growth of tablet devices, online and mobile advertising has advanced to a newer, more exciting level — one that leverages inherent features on the device such as flicking, sharing, or swiping that yield high engagement.
•  Video production. Rich digital media allows advertisers to deliver very high-quality content across a variety of platforms. Video is no longer a “lean back” passive experience but can be incorporated into the core of interactive experiences to engage audiences, aided by the rapid growth of online video advertising.

Forrester asked each agency interviewed for this study to describe how rich digital media creates more immersive and engaging experiences online. “Rich digital media is the way we tell stories,” one agency stated. “And that’s how we are able to capture consumers’ imaginations.” In summary of the qualitative data for this study, rich digital media drives more online engagement with:

• Nonlinear interactive storytelling. Rich digital media enables advertisers to tell better brand stories and give consumers more control over their experience. Consumers can interact with content, choose their own path, and create their own adventure.
• Personal and customized experiences. Consumer engagement can be driven by empowering the user to personalize and customize their experience. “Leading global brands request it,” one agency shared. “They want the user to control and own the experience.”
• Expressive and creative visual elements. Rich digital media allows artists, advertisers, and designers to be more creative and expressive, which creates a more entertaining experience for consumers. Leveraging gestural user interfaces like flicks and swipes, which are now commonly used on mobile and touchscreen devices, also helps to drive engagement.

In-House Capabilities Produce Lucrative Business Benefits for Agencies

Every agency interviewed for this study has rich digital media production capabilities in-house to a certain capacity, and all of them attribute having these capabilities to giving them an advantage in a competitive marketplace. Moreover, all of them plan on increasing their capabilities in the future to meet increasing demand. It is advantageous for agencies to invest in in-house resources because:

• It reduces cost. All of the agencies interviewed for this study reported lower costs of production due to in- house resources including talent. Agencies don’t have to outsource to specialty agencies that charge a premium.
• It produces better content, more quickly. When asked if keeping the technology in-house helped produce content better and more quickly, one creative director responded, “Absolutely, by the fact that creative and production are highly interacting with each other and closing any communication gaps.” Production teams are also able to ideate and iterate much faster — increasing the team’s overall flexibility and agility.
• Creative and technology are more integrated and more powerful. “You can’t get the right level of collaboration and iteration you need when you outsource projects in this field,” asserts an agency. In- house capabilities enable creative teams with a clear sense of the storyline to work next to production specialists with a deep knowledge of the technology and marry their two skill sets to tell a more powerful brand story.
• It’s profitable. Digital services are a fast-growing profit center. The agencies all stated that these capabilities give them a competitive advantage, which helps them attract and grow new and existing business. And digital advertising is showing particularly strong growth for agencies, increasing 16.3% in 2010, compared with 7.7% growth for the advertising industry overall.4

Agencies Predict More Demand In The Future, Investing Accordingly

“I can tell you that the more work we do [in rich digital media], the more calls we get from clients and prospects wanting to produce these types of experiences for their audiences.” The agencies interviewed for this study are increasing their offerings in rich digital media because they all anticipate the landscape to continue to grow. Demand for rich digital media will continue to grow due to the following factors:

• Continued consumer demand. “At the root, consumers and users want to be entertained or have something that’s useful. If you do either of those two, you have their eyes and ears. Consumers compare an experience online to a game they just played on PlayStation 3, and everyone holds web experiences to the highest standard because they compare the Web with TV, film, and games,” summarizes a Europe-based agency. Consumers’ high standards and future innovations in motion pictures and television will continue to increase consumer expectations of content on the Web and create increasing demand.
• Opportunities for deeper engagement. Research for this study undoubtedly concludes that rich digital media drives higher engagement online, and agencies are embracing the technology as a direct result. Nonlinear storytelling, game-like mechanics, personalization, and shareability across a consumer’s social graph help advertisers break through the clutter and drive powerful experiences online.
• More in-market competition. The majority of rich digital media was once exclusively produced by specialty agencies. Today, more in-market competition is increasing, as more agencies invest in their own capabilities to meet demand from consumers, gain a competitive advantage, and obtain inherent business benefits.
• More talent. More design schools are providing access to new technologies and are teaching more courses in rich digital media. While agencies continue to invest in training their existing teams, young talent is entering the market with more advanced skill sets to hit the ground running and make more immediate contributions.
• Proliferation of devices that creates additional opportunities. Smartphone and tablet adoption creates new opportunities for advertisers to reach consumers with rich digital media. With technology iterating and innovating so rapidly, processing power will increase and allow advertisers to continue to push the envelope as broadband becomes ubiquitous.

For the full key recommendations see the complete report by Forrester Research.

1 By 2016, US advertisers will spend $77 billion on email, display, mobile, search, and social to try to engage consumers online. Source: “US Interactive Marketing Forecast, 2011 To 2016,” Forrester Research, Inc., August 24, 2011.
2 More than half of the 177 million US adults who are online have two or more different types of devices connected to the Internet, and one-third have at least four. Source: “Welcome To The Multidevice, Multiconnection World,” Forrester Research, Inc., January 25, 2011.
3 More than 340 million people play social games monthly. Source: Appdata (http://www.appdata.com/).
4 Source: Bradley Johnson, “Agency Report: US Agency Revenue Jumped 7.7% in 2010,” Advertising Age, April 25, 2011.
To prepare for this study, Forrester conducted phone interviews with executives at 12 leading digital agencies. The interviews covered each company’s use of rich digital media, the challenges and benefits companies were experiencing from using it to address client needs, and what the executives thought the future of the rich digital media landscape looked like. Respondents were from the US, UK and Sweden. The study began in July 2011 and completed in October, 2011.

© 2011, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. For additional information, go to www.forrester.com.

Mark Burnett, a successful global producer and the acknowledged pioneer of reality programming in the US — is set once again to make a major leap forward that is sure to reinvent the broadcast and cable worlds.  Mark Burnett has teamed up with technology company ACTV8, to usher in a whole new world of audience participation and integration with television. Now, anyone with an iPhone, iPad, or Android device will be able to interact, socialize, consume, share and participate in real time, all while watching his or her favorite TV shows.

Mark Burnett’s successes include the long-running Survivor (currently in its 23rd season) airing on CBS; The Voice, which starts its second season in February 2012 on NBC; The Apprentice and Celebrity Apprentice on NBC, Shark Tank on ABC; and a host of other very successful franchises. Burnett also produced the 2011 Emmy Awards; the 2010 and 2011 People’s Choice Awards; and the 2011 Spike Video Game Awards, which aired this past weekend. Since 2007, Burnett has also served as the executive producer for the MTV Movie Awards.

In making the deal with ACTV8, Burnett explains, “It has always been my dream to create a deeper and more engaging relationship with the audiences of our shows. ACTV8 enables us to give the audience exactly what they want: interactivity, metadata, behind the scenes views, scoops and insights, social relevance and connectivity. Today’s audience brings a whole new set of expectations from the shows they connect to and embrace. ACTV8 allows our content to take a much more important and relevant position for consumption within the changing lifestyles of our viewers. This breakthrough technology serves to foster a world of “New Era TV Networks.’”

ACTV8 delivers what it calls a “complete global media integration platform.”  The platform synchronizes a user’s mobile device or tablet to any live or recorded video broadcast and not only provides rich interactive content to the user’s device related to the programming, but also feeds viral hooks into Facebook and Twitter. With its proprietary technology, ACTV8 has married broadcast and cable television to the two largest social media platforms on the planet, and then made this all interactive, thus creating the ultimate uber-platform. The technology enables ACTV8 to deliver a host of program enhancements, line extensions, quizzes, trivia, gaming and sales experiences in conjunction with any TV programming.

Founder and CEO Brian Shuster explains, “ACTV8 represents an altogether new model for digital media creation, interaction and distribution. ACTV8 creates a world where viewers won’t skip branded messages and integration, because ACTV8 unlocks their value for consumers.  We are working with the largest brands in the world to enrich their connection to the consumer and establish new relationships between their brands and their audiences”. Most of these brands and most TV industry executives acknowledge a major problem facing the medium today: the DVR. And as consumer adoption of the DVR grows, TV ad spot values decline. How can we keep the viewer watching? Like other players in the growing Social TV market, ACTV8 and its partners are set to reinvent the value proposition for the TV networks, the advertisers and most importantly…the consumer. Consumers are rewarded for their participation with content, including special offers and coupons from many of the leading TV advertisers in the US.

SOURCE ACTV8 /PRNewswire/

“OTT video is continuing to grow, overcoming the barriers of low device connect rates and cumbersome user interfaces,” says Keith Nissen, Research Director. “Even stronger growth of I-VOD and EST video services is possible if device manufacturers and digital retailers can put together a simpler, plug-n-play solution for getting online video to the TV (web-to-TV). The proliferation of tablets is also contributing to OTT growth.”

Some of the other factors affecting the OTT video market:

• Streaming video transactions will reach just under 1 billion in 2010.
• Netflix and other S-VOD suppliers are shifting to a more TV-centric model and will soon be competing directly with HBO, Showtime, and Starz.
• The collaborative and competitive models among physical and digital retailers, content owners, and pay TV operators are shifting rapidly as players in the ecosystem grapple with the evolving mix of physical versus digital channels, EST, pay-TV, OTT, and subscription VoD.

Leaders of the advertising, media and entertainment sector have converged in New York, London and Melbourne for the inauguration of the CTVMA, the global industry trade body of the advertising, media and entertainment sector.

In 2012, television advertising will join the 21st century, with Internet connected televisions, from brands such as Samsung, Sony and LG predicted to make up to 90% of the global TV market in the next three year. 41% or televisions are forecast to have internet connection in 2013. By 2015 there will be 138 million connected TVs rising to 550 million a year later according to Digital TV Research.

Connected TVs offer brands the chance to connect their offline spend with the rapidly growing online content market, with TV applications or targeted ad campaigns served by ad networks across electronic program guides.

Announcing the launch from Melbourne, Founder and President Asia-Pacific of the Connected TV Marketing Association James Grant Hay said, “The CTVMA is being launched today to address these issues currently being faced, by not only advertisers, broadcasters and rights holders alike but, by the TV set makers themselves. As TV platforms are likely to compete with broadcasters to buy programme content from rights holders and serve advertising against it,” he said.

With 85% of marketers already interested in advertising on internet-connected TVs, the CTVMA had been set up to inform and educate the advertising, media and entertainment sector on the commercial opportunities of Connected TV platforms.

Co-Founder and President North America of the Connected TV Marketing Association Zachary Weiner said, “Connected TV platforms supersede broadcasters in owning programme content and selling advertising against it. Marketers are also frustrated by the lack of audience information on who they are targeting and ad networks face issues of interoperability, scale and standards across platforms”.

Mr Grant Hay added, “it is therefore essential that all sides of industry now come to together in an open industry forum of consultation with CEMs to discuss the future success of our industry as a whole,” he said.

As part of its future plans, the CTVMA has immediately embarked on an open industry consultation process, inviting leaders from the advertising, media and entertainment sector to participate in formulating an industry terms of reference.

The launch in Melbourne included a Smart TV presentation from Sony Australia, attended by representatives from local companies as diverse as NBN Co. Limited, Adconion Media Group, Foxtel, News Digital and Accedo Broadband.

The association currently comprises of 47 Country, Regional and Chapter appointed Presidents, Vice-Presidents with representatives around the world.

The CTVMA’s first industry event in Sydney on March 7, 2012.