Point-and-Click TV Ad System

A small Boston-based firm thinks it can achieve a long-desired goal for networks and advertisers—bringing point-and-click interactivity to the TV screen. And it thinks it can do it without scrapping existing cable set-top boxes or replacing legacy back-office systems used by media buyers and stations to manage the buying and trafficking of commercials.

Backchannelmedia, a 20-employee company founded in 2000 and funded by private investors, says it has created a hybrid, two-screen interactive advertising system that links a Web interface to simple on-screen graphics that could be displayed in digital broadcast programming.

A viewer could click on a graphical icon promoting a product or service, such as a teaser to buy a DVD version of a popular show, and the existing “backchannel” in a DOCSIS-compliant cable set-top would be used to relay the request to Backchannelmedia.

The viewer would then go to his personal computer and use a Web interface, perhaps a personalized shopping page within his cable company's Web portal, to receive a “bookmark” with more detailed information about buying the DVD. The same sort of graphic could be placed within a commercial, encouraging a consumer to click and then receive an electronic coupon for a product.

Backchannelmedia co-CEO and founder Michael Kokernak's pitch is that the system works without replacing existing equipment for consumers, buyers or broadcast systems.

Kokernak says he spent much of the past 10 years reverse-engineering the legacy advertising management, traffic and automation systems currently used by media buyers and stations. “With 65,000 clients for Donovan Data Systems [ad management systems], you just can't go into these ad agencies that have enough problems with fragmentation and get them to switch out their systems. You've got to come up with something that fits right down the pipe with the way the industry is today.”

The company has been demonstrating the system in New York over the past few weeks to programmers, advertising agencies, media buyers and cable and satellite operators, and says it expects to launch a beta trial with local stations this spring. The demonstration showed a simulated cable headend, with a Sencore video server and a 64-QAM modulator being used to deliver digital video signals to a standard Motorola 6416 digital set-top. Backchannelmedia inserts a “token ID,” a small piece of data, into the MPEG-2 data stream, which is then recognized by a simple piece of software on the Motorola box that renders a graphic.

Clicking on the graphic on the TV screen with a standard cable remote sends a request from the set-top to Backchannelmedia's servers through the Internet, which then instantly generate a Web bookmark in the consumer's shopping portal on their PC screen.

One example Backchannelmedia demonstrated showed a graphical icon promoting a song from American Idol winner Jordin Sparks. Clicking on the icon sent a Web bookmark that automatically loaded the viewer's iTunes account in order to purchase the song.

Since both the token and the set-top have unique IDs, the click-throughs can be directly measured, allowing TV advertising to deliver the higher level of accountability that media buyers have been looking for. Advertisers could also place banner ads on the Web portal that directly target consumers based on the information they've already requested through the TV. Both capabilities should allow broadcasters to reclaim advertising share that they've lost to Internet search giants like Google and Yahoo, says Kokernak.

Backchannelmedia isn't seeking a cut of advertising or e-commerce revenues, but simply wants to license its system to networks and multichannel operators. Its challenge is to gain traction before new technology—perhaps from an Internet player like Google—creates a more elegant one-screen solution.

Val Napolitano, president and CEO of TV spot rep firm Petry Media, sees another stumbling block. He thinks rep firms would need to get a share of click revenue in exchange for access to station clients.

“It's a great concept,” says Napolitano. “But how do I get paid?”

E-mail comments to glen.dickson@reedbusiness.com