Interactive TV Ad Revenue Faces Sluggish Future

18 June 2001

Ad revenue on interactive television will comprise only 7% of total US adspend come 2005, despite 44% of TV-based purchases being made through iTV, says online research group Jupiter Media Metrix.

By 2005, shopping via iTV is expected to bring in $4.3 billion, while ad income from the medium will be slightly higher at $4.5bn, but fragmented among operators, carriers and response networks.

“Even though our research shows that there’s money to be made in the iTV space, carriers, programmers, advertisers and merchants are struggling with models to justify iTV deployment,” commented Jupiter senior analyst David Card.

“However, advertising won’t account for more revenues than shopping until 2005, due in part to the current US economic conditions, internet advertising’s seeming ineffectiveness and the lack of a common national iTV technology platform.”

Nevertheless, advised Jupiter, agencies should experiment with iTV now, as adspend on the medium will eventually outstrip online ad revenue.

News source: CampaignLive (UK)