Interactive TV: The myth (and new reality)

Once upon a time, there was a dream called interactive television. With interactive television, the thinking went, people could do things with their television they never could before – comment on programming, vote on reality shows, and respond to advertising offers, to name a few. Marketers and advertisers were excited—the possibility a new and recurring revenue stream seemed assured.

There was only one problem: no one considered how (or even if) consumers wanted to interact with their televisions. The assumption of interactive television advocates that we’d just flip a switch and television viewing would suddenly go from a completely passive to a fully active experience proved false. The contrarians, who insisted interactive television would always be the stuff dreams are made of, were also off the mark; tech-savvy consumers have shown a desire to interact via the television under the right circumstances.

So is interactive television lifting off, or is it still just a niche play, best suited for direct response advertisers? I believe that today the reality lies somewhere in between.

As the rise of rich TV begins to take shape, we are getting a clearer picture of the kind of interactivity that works on the television, and how consumers want to engage with advertising content on the biggest screen in the home. The audience still wants to kick back and relax, but increasingly, they also want to interact with advertising that is relevant and adds value. In short, they want this interaction to be contextualized, rather than constant. I call this user behavior opt-in interactivity. If the consumer wants to interact with the programming or advertising, they can click to their heart’s content. But, if they just want to sit and watch, that’s OK too.

Opt-in interactivity is a consumer-centric approach that has worked very well on Xbox LIVE and is the cornerstone of our philosophy on Xbox. The idea is pretty simple: invite, don’t interrupt. This means invite the audience into an experience that is relevant and adds value. What do I mean by relevant? A great example is the recent American Express campaign that ran on Xbox LIVE. When the Xbox LIVE audience member was in a contextually relevant environment – in this case, where they both buy and use points – American Express offered card members who buy 2,000 or more Microsoft points with their American Express card, a free, 3-month Gold subscription to Xbox LIVE.

Not only was the offer contextually relevant, it also added value to the user – it gave them something in exchange for their engagement (the free Gold subscription). American Express also provided users with downloadable branded themes and gamer pics. In the end, American Express invited Xbox users into a contextually relevant offer which provided a real, yet simple, value exchange. This is a great example of opt-in interactivity; those who responded to the invitation received something of value.

Opt-in interactivity works because it puts the consumer in control. It also works because it’s transparent —we aren’t trying to trick anyone into buying a product or service. Instead, we are acknowledging who they are and what they are interested in. This is one example of the promise of interactive television, and – on Xbox LIVE at least – it’s also a reality.