The iTV Doctor Is In!: Can We Reward Ad Viewing?

Dear Readers:

About a year ago I interviewed Viggle president Chris Stephenson (http://www.itvt.com/itv_doctor/9069/itv-doctor-interview-viggle-president-chris-stephenson). With some colorful commentary by Jonathan Bokor (now SVP/director of advanced media at Starcom MediaVest Group), we attempted to drill down into the business model behind Viggle Rewards. I admit I am a HUGE fan of Viggle's efforts to create a currency to reward not only television viewing, but also television interaction. But Jonathan and others questioned Viggle's ability to sustain their points over time.

And it appears we were not alone; Viggle has adjusted their point value over the past year:

  • May, 2012: Viggle awarded a $5 Starbucks card for 7,500 points--or $0.00067 per point. So awarding 200 points for a viewer to watch any given television show came to 13.3 cents, or $133 per thousand.
  • April 2013: Viggle awards a $5 Starbucks card for 12,500 points--or $0.0004 per point; and awarding 200 points for a viewer to watch any given television show comes to 8 cents, or $80 per thousand.

Viggle has dramatically scaled down the points-per-show calculation recently, and watching a regular primetime show (rather than a show with a heavy promotional push) is now about 50 points. So at the $0.0004 per point rate, that's 2 cents, or $20 per thousand. 

And now there is WinView--a new kid on the block. Actually, Dave Lockton, founder and CEO of WinView, is far from a kid. Dave founded Data Broadcasting, Inc. (now Interactive Data Corp.); formed Interactive Network, Inc., which pioneered synchronized two-screen interactive television (backed by NBC, Cablevision Systems, TCI, Nielsen, Gannett, Sprint and Motorola); founded AirPlay Network Inc. in 2005, which took the Interactive Network platform to the cell phone; and now has launched WinView.

WinView describes itself as a "Two-Screen Brand Response Advertising Solution." So rather than rewarding viewers for watching television programs (as Viggle does), WinView rewards viewers for watching commercials, and even more for engaging with commercials.

We spoke to Dave last week, after his launch announcement at NAB.

iTV Doctor: Dave, where did the idea of WinView come from?

Dave Lockton: WinView is born from years of experience with TV viewers interacting in real time with second screens. Our roots can be found in the trials we had with subscribers in four different TV markets at Interactive Network and a national experience at AirPlay. We tested interacting with TV commercials for advertisers like P&G, Pepsi, American Airlines and Chrysler.

I came to realize that the paradigm of GRP-based advertising is broken, with viewers avoiding watching TV commercials; but that digital alternatives could not achieve the mass reach of TV advertising. The solution is viewer interaction with television commercials on the second screen. The ubiquity of smartphones and tablets now enables the powerful and complex relationship between the viewer and TV programming and advertising that Marshall McLuhan recognized is inherent in television itself.

iTV Doctor: SOME of us remember McLuhan's prophetic distillation that "the medium is the message," but we already have Viggle Rewards. Why do we need WinView?

Dave Lockton: First off, we do not view Viggle as a competitor, but as a potential partner--as are all the broadcasters, programmers, and second-screen companies who aggregate eyeballs. In fact, Viggle is to be commended for recognizing that one of the essential components of the two-screen experience, besides fun and an enhanced experience, is rewards. We will partner with any second-screen content-focused company, offering a "WinView Inside" commercial experience where our app is baked in or linked in real time when a commercial pod runs.

Now, to answer your question more directly: a recent Frank N. Magid Associates "Two-Screen Advertising Marketplace" report concluded that a single check-in service would be challenged to aggregate the minimum scale of 5-10 million viewers the big brands want to reach. The report cited that an effective second-screen advertising model must include a second-screen experience that reaches 100% of the potential universe of smartphones or other Web-connected devices. Second, the second screen is synchronized with each commercial insertion. And thirdly, highly granular opt-in information about the viewers that can be aggregated and provided to sponsors with proof of comprehension, and highly qualified leads.

The result of our many years of testing and learning has led to us creating a unique solution to meet these requirements, supported by 22 issued or pending patents that protect these requirements.

iTV Doctor: How does a viewer earn rewards? Is it enough just to watch the ad? Participate in interactivity? Purchase the product?

Dave Lockton:To be eligible to earn rewards, the member registers and downloads the WinView app. We alert their mobile device in advance with a WinChime when a WinViewable TV commercial is about to air during one of their designated favorite shows. They can interact with the commercial regardless of what form of multi-tasking they may be doing, including texting, emailing, tweeting, or using a check-in app. Watch the commercial, either live, DVR or Web-streaming, answer one or two questions on the second-screen, or participate in some form of gamification, and that's it. There is a video demonstration of the user experience on our Web site at www.winview.tv.

iTV Doctor: What is the value of those rewards? Do the rewards differ for different brands?

Dave Lockton: Yes, and this goes to the heart of the viewer's experience. For every 30-second WinViewable commercial, a member will get WinView points worth about $0.10, a sweepstakes entry, and a coupon or offering from the sponsor; and in addition there is our patent-pending targeted awards system.

ITV Doctor:How does that work?

Dave Lockton: WinView will reward its members to continually update their profiles. Members tell us what shows they are regularly watching, and if and when they want to receive WinView commercial alerts via WinChimes. Like Pandora, our members will continually train our system as to the kinds of awards that will have value to them, in addition to monitoring their app usage, or click-stream data. They will be able to check from the menu as general as "travel" or "electronics," and WinView will provide offers as specific as an Alaska cruise or a Pizza Hut promotion.

TV advertisers spend billions of dollars trying to get promotions into the hands of people who are in their demographic target with a relatively low success rate of 3-10%. We can deliver that offer electronically in real time as an additional and significant incentive for the viewer watching the next commercial. TV viewers are already using their second screen while watching TV, often about the program itself. The potential for 30 seconds more time doing what a TV viewer is already doing is the opportunity.

iTV Doctor: What does it cost the advertiser?

Dave Lockton:Fees will be on a performance basis. For viewer engagement with the commercial and the demographic report, we will charge less than what advertisers are paying for a click on a Web video. The big impact for the advertiser is the ability to combine the reach of a primetime brand-oriented TV commercial with the targeting of direct response. For a super-qualified lead with complete opt-in demographic profile and purchase intent, fees will vary depending on the value of the product and the granularity of the data about the respondent.

iTV Doctor: Let's go back to the rewards. You might offer a specific reward like a free travel bag for watching a spot about an Alaskan Cruise. Or you might offer points to be redeemed for a Papa John's Pizza for watching ANY of your enhanced commercials. In the first case, you are after a narrow audience. In the second, you are going after a broad audience. How do you decide?

Dave Lockton:This is entirely at the discretion of the advertiser. They will place an order for a two-screen WinViewable experience based on the criteria that they decide. Our research shows that 80% of smartphone-owning TV viewers are very interested in the WinView experience, and that was consistent across gender and age groups with a slight bias to the males 18-34. These groups by age and gender are differently motivated by sweepstakes, coupons, and redeemable points. We will offer all of these, depending upon the commercial and target audience. 

iTV Doctor: And that is certainly a testable proposition.

Dave Lockton: Absolutely!

ITV Doctor: Earlier you said you thought the two-screen ecosystem was just getting started. Based on your experience, what do you see happening with check-in companies?

Dave Lockton: They are discovering that the equivalent of Facebook chat, Twitter feeds, "companion" information, and show archives will not scale by themselves. My experience dictates that any second-screen service needs to offer an engaging experience that enhances and doesn't distract from their TV program viewing enjoyment by leveraging gamification and rewards. Easier said than done.

ITV Doctor: What advice can you offer based on your experience?

Dave Lockton: Every program is different; you must enhance the content for each. We did "Jeopardy" at both companies, where the interaction was obvious--you compete against the TV contestants, but the synchronization was critical. NFL Football would seem easy: "Call the Play." But it took over two years of fine-tuning the game play and rewards system to make it addictive. We spent a year working with the writers of "Seinfeld" to develop and perfect a game that the hardcore fans ultimately loved because the line between enhancement and distraction is a fine one.

The check-in category exploded because investors were intrigued with a novel new application of existing technology--ACR--and forgot that television is always about content. Monetization will depend on utilizing ACR for tight synchronization of social groups in a variety of social games and contests for meaningful awards. This is why two-screen synchronization and social games with friends (along with our business model) are the continuing focus of our intellectual property.

My advice is that in order to monetize the viewers' content requirements, a check-in company will have to be subscription-based or generate the required revenues by incorporating WinView and its award system into their audience-aggregating app for a share of our advertiser fee revenues. Our experience testing with major brands consistently showed that 85-95% of viewers playing along with a program in a linear experience also interacted with commercials. WinView will get member sign-up and promotion of our rich award system around the commercials, and the check-in companies will share in our revenues.

iTV Doctor: Could WinView's late entrance into the social-TV ecosystem get lost in the shuffle?

Dave Lockton: Not likely, because the two-screen TV ecosystem is just getting started, and WinView is the only one focused on two-screen advertising with a proven revenue model. In today's multi-tasking world, there is an innate pent-up demand to engage with TV commercials. At IN and AirPlay, we discovered how to make the second-screen experience fun and rewarding. We offered every televised pro sports event, and covered over 25 game shows, and primetime entertainment shows. We had over five million complete show interactions. We offered a wide variety of incentives and approaches to interactive programming. With this level of gamification experience, one comes to understand how to entertain and motivate today's multi-tasking TV viewers to watch commercials.

iTV Doctor: You just emerged from stealth. At what stage is WinView in right now, and how do you scale technologically and financially?

Dave Lockton: We are preparing a three-month beta test followed by a national launch. When we introduced the real-time synchronized two-screen service into homes in 1990, we realized that the platform had to be designed ultimately to scale to handle the potential of 100 million simultaneous Super Bowl viewers.

iTV Doctor: Will we see you at the TV of Tomorrow Show in June?

Dave Lockton: Absolutely, and this time we are no longer in stealth mode.

 

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The iTV Doctor is Rick Howe, who provides interactive video consulting services to programmers, advertisers and technology providers. He is the recipient of a CTAM Tami Award for retention marketing and this year was inducted into The Cable Pioneers. He is also the co-author of a patent for the use of multiscreen mosaics in EPG's. Endorsed by top cable and satellite distributors, "Dr" Howe still makes house calls, and the first visit is always free. His services include product development, distribution strategy and the development of low-cost interactive applications for rapid deployment across all platforms.

Have a question for the iTV Doctor? Email him at itvdoctor@itvt.com

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