E-Commerce Suits Television To A ‘T’

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Imagine admiring an outfit your favorite TV star is wearing on her show. With just a click on the remote control, you order the clothes, which show up at your home the next day.

Similarly, how about watching your favorite baseball team just win a championship and buying a ball or piece of equipment used during the game simply with the tap of a button? Or viewing a commercial for a new product and buying it just by clicking on a link on your mobile phone or tablet?

In the next five years, experts predict these television-driven purchases–also known as t-commerce–could completely reverse the decline in TV marketing spend, driven largely by the consumer goods and retailing industries.

“We recently completed the ‘U.S. T-Commerce Purchasing Report,’ which revealed that 82 percent of people surveyed would be interested in purchasing products seen in or tied to their favorite shows,” said Mike Fitzsimmons, CEO of Delivery Agent, a provider of shopping-enabled entertainment, in an interview with CMO.com. “The report also confirmed that the average person spends five-plus hours a day watching television. With t-commerce, an engaged viewer for this period of time now becomes an engaged consumer.”

T-commerce has the potential to change the paradigm of television advertising. Traditional advertising forces the viewer to remember something to explore later, whereas t-commerce enables immediate engagement on the TV and through other digital devices.

“Marketers can leverage t-commerce technology to drive consumer actions that include a purchase, a donation, activating a request for more information, polling, and more,” Fitzsimmons said. “With this technology in place, television advertising becomes more meaningful and measurable for marketers. You’ll see it become commonplace for marketers to activate a call-to-action directly from their advertising.”

For example, a viewer watching a commercial can use the TV remote to request a coupon be sent directly to his mobile phone from the commercial he is watching. That coupon could then be redeemed immediately via TV, online, or at a physical store location. Or the viewer can add products to a cart for checkout via TV, mobile, or Web.

“This is what t-commerce brings: the ability to extend advertising content and create a full-circle shopping experience rather than one that’s siloed,” Fitzsimmons said. “Now customers can truly experience that ‘lean back’ shopping while watching their favorite shows through a few clicks of the remote without friction.”

An Idea Years In The Making
But t-commerce is hardly a new concept. In 2001, for example, NBC’s “Will & Grace” invited viewers to visit NBC.com at the end of an episode to purchase a T-shirt like the one worn by star Debra Messing. More than 3,000 people bought the $52 shirt by the next morning.

That started executives’ wheels turning about the possibilities of rather than having to go to a Web site, viewers could simply click a button on their interactive TVs and buy an item immediately.

In 2005, top broadcasters, such as NBC, began using Delivery Agent’s commerce platform to sell the products consumers were seeing during their TV viewing experience. For example, a viewer who fell in love with the orange Francis espresso maker on “Will & Grace” could purchase it by going to NBC’s Web-based commerce site.

“The benefit for the marketer was immediate—the ability to leverage their association with the show to promote their product,” Fitzsimmons said. “Since then, the technology to connect consumers to products seen on TV and the awareness among key—broadcasters, brands, CE manufacturers, and cable and telcos—has been growing exponentially.”

The evolution started with the ability to make purchases via the Web; it then moved to mobile devices, and now to remote controls. Today, if you have a 2012 or 2013 Samsung Smart TV you can experience t-commerce via remote control.

Brian Cohen, executive vice president and general manager for Etailing Solutions, an integrated online sales and marketing consultancy, reasons that with smart TVs on the rise (one in five households, per eMarketer), as well as DVR and on-demand use, the ability to capture prospective customers in the middle of another activity vs. during scheduled time is certainly a reasonable next step.

Contextual advertising, currently executed simply as product placement, will become more the norm, he told CMO.com.

“Imagine if you were watching ‘Friends’ in the ’90s and could add Rachel’s wardrobe to your shopping list, or purchase the latest technology that Sheldon and Leonard were using on ‘The Big Bang Theory,’” Cohen said. “I could see this being the next monetization model for distribution channels like Netflix and Hulu, and seeing retailers such as Target and Amazon get into the custom-content development game makes sense when you think of it from this perspective.”

American Express also has created a way for viewers to purchase clothes, furniture, and other items they see while watching TV, according to Erik Dochtermann, CEO of ModCo Media.

“This is being used with Fox’s ‘The New Girl,’ where fans can buy certain items through fox.com or the Fox Now apps for iPad,” he said. “NBC Universal fans can use apps on mobile devices to buy products seen on shows such as ‘Fashion Police’ and ‘Top Chef.’”

The ShopTV T-commerce application, available on Samsung 2012-2013 Smart TVs, expands the function of the TV by allowing viewers to shop for products seen in network programming and advertising via the remote control. Viewers can easily shop 24/7 by network, show, or brand from the comfort of their couches. Delivery Agent’s platform powers this experience and offers customers thousands of products to choose from, available across hundreds of shows.

 

Delivering Meaningful Ad Experiences
Before t-commerce becomes a mainstream marketing channel, however, it must first become established as a viable sales channel, said Michael Harvey, COO at Corra, an e-commerce agency.

“We are now starting to see critical mass building for some of the essential components: the number of Web-connected TVs; the penetration of connected devices like tablets—another ‘t’ in the t-commerce parlance—that can be used both as the transactional platform and a remote for the TV; venture capital flowing to some interesting startups that are beginning to explore the commercial viability of the general space; etc.,” he told CMO.com. “As standards and business models begin to take shape and shake out, it seems likely that what is a tiny, tiny commercial area today will evolve extremely rapidly as we’ve seen with mobile-commerce in the past 18 months.”

According to John Rossi, global head of consumer goods consulting for Wipro, an information technology, consulting, and outsourcing company, marketers will need to think differently as well as influence the TV shows, networks, and actors.

Instead of today’s typical mass-marketing approach, he predicted marketing will become more personalized, and adjustments will occur across the retailing and consumer goods manufacturing industry, he told CMO.com. This enormous amount of big data will need to be tied to households as well as individual shoppers.

“You will quickly see a day for actor endorsements for apparel and accessory lines similar to what has already occurred in the sporting industry,” Rossi said. “We already see it in cosmetics, with stars and models endorsing various products. It will trickle across to all products that appear on your screen.”

The Olympics
A variety of t-commerce efforts occurred during the 2012 Summer Olympics to capitalize on the programming. Most of these efforts took the basic form of creating a Web site with commerce capabilities that were tied into the broadcast.

For example, ConnecTV created a highly interactive site with social features and lots of content, with commerce opportunities liberally sprinkled into the mix. During the men’s swimming events, for example, a viewer could browse to a bio of Michael Phelps, see a photo of him wearing his trademark headphones, discuss with other viewers the merits of that brand, and then buy his own headphones.

Corra’s Harvey said the execution worked for several reasons. First, no support from the network itself was required. “At some point, deals will be cut with content providers, but for now I think the most successful early attempts will be those that exploit the content without trying to be directly integrated into the content, which would, of course, require the participation of the content creator,” he said.

The site also delivered a nice user experience balanced between genuinely interesting information (athlete bios, history of the events, scores, social interaction) and shopping, Harvey said. And because the commerce piece was handled by Amazon, there were no hurdles in the form of creating new accounts, handing over new credit card information, or dealing with an unknown fulfillment vendor.

T-Commerce Challenges
One unavoidable challenge to t-commerce is that many people consider TV interfaces to be absolutely awful. The physical remote, which is a legacy of 50-year-old analog technology, seriously constrains the quality of the user experiences that can be offered on the actual TV-set itself.

Rossi said the hindrance of t-commerce resides on two fronts: who will be the “bank,” and how will the television shows, networks, and distribution companies work with the retailers and consumer goods manufacturers?

“From a ‘bank’ standpoint, the opportunity is huge. Not only will be there be billions of dollars in commerce flowing through the banking organizations, but there’s a certain amount of ‘float,” he said. “The ‘bank’ may not be your first idea of today’s typical neighborhood bank; it might be the broadcaster, your cable/satellite provider, your Internet provider, the retailer, or possibly a new third-party specializing in these services.”

Harvey said he expects titanic battles between the studios, networks, device manufacturers, cable companies, and new technology providers as to how to share revenue.

“My personal bet is that the early successes are going to come from business models that simply don’t require the direct participation of the content providers and rely more on clever delivery of digital experiences, including shopping experiences, that are tied to the programming and delivered on digital devices like tablets,” he said. “What is almost certainly inevitable based on every other disruptive development in digital commerce is that when people congregate en mass in a connected environment, they begin to shop.”

T-Commerce At Work
At this stage of the game, according to Harvey, it is anyone’s guess as to which of t-commerce’s potential executions take off.

“The most basic execution is the one that we have seen to date: An app or Web site is set up that features merchandise relevant to a particular TV broadcast,” he said. “For example, viewers of a cooking TV show are simply encouraged to go to a particular URL or app that offers items that have been curated to be relevant to the show, say, cookware.”

However, viewers are starting to see some more genuinely interactive and sophisticated business models emerging:

1. The programming content is deliberately built out with commerce opportunities. One execution might be that a character on a sitcom is wearing a particular T-shirt. Some means will be employed to indicate to viewers that they can buy that very T-shirt. A viewer might then pause the show with a remote, and a second pane might open on the TV screen that allows the viewer to consummate a purchase via Paypal.

2. The digital commerce system is content-aware. One execution is what Shazam does where it actually recognizes a track of music being played in real time by analyzing the audio and then enriching that experience by providing lyrics, information about the artist, concert dates, and the ability to purchase that track. That capability is being expanded so that Shazaam can actually recognize what content is playing on a television.

3. TV ads that are directly synchronized with a digital commerce option. This one is fairly obvious: An ad plays on TV and, simultaneously, the product being advertised is made easily and compellingly available for purchase on a handy mobile device.

Wave Of The Future
Another idea being tossed around is the ability to add an auction component to the t-commerce model—for example, to tie it to the actual shirt an actor wears in a sitcom that could be autographed by the celebrity, or perhaps auction off a sports item used by a sports star in a live event. A further possibility is some antique-hunting show allowing viewers to bid on an item “discovered” in some attic.

“T-commerce auctions are not only feasible for certain products and services, it makes a lot of sense,” Rossi said. “You might be watching a scene that has a beach in it. Wouldn’t the major airlines, hotel chains, and possibly ‘vacation aggregators’ want to bid for your business? Would online shopping companies, such as eBay and Amazon, want to make you an offer? As long as they simplify the process and key in on the direct opportunity, which is ‘allow the viewer to purchase it right now,’ auctions will occur.”

Final Thoughts
Marketers have pushed very hard to conquer digital because of the ability to quantify success. T-commerce offers a huge opportunity for marketers because the platform makes TV actionable and accountable. Big brands are very excited about the interactivity and engagement that T-commerce solutions offer, but they are equally and perhaps more excited about the big data opportunities these campaigns provide.

“T-commerce is going to require quite a bit of technology integration, security, and technical expertise to make it successful. Large consultancies with broad and deep offerings will need to help the CMO through this endeavor,” Rossi said. “We believe that the actual ‘technology spend’ via the CMO’s office will soon surpass the CIO’s budget.  Companies must not only have the technological expertise to make T-commerce work for the retailer and manufacturer, they must also know the retailing, consumer goods, manufacturing, banking, and finance industries. They will need to directly understand shopper and consumer insights, digital transformation, social media, and mobility.”

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