Mba francisco Pinto Balsemão

Hypothetical business models

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8.2.4. Hypothetical business models

For a small market such as the Portuguese one, it is reasonable to think the advertising will have the biggest piece of the revenue source for the television operators. For the time being, the Portuguese are not huge on-line buyers such as the Americans or the English, and it is most likely that t-commerce will not generate as much revenues as the advertising.

T-commerce is an add on for broadcasters, whose business was been based on the advertising revenues. Of course, for the pay-TV operators, their revenues also come from the subscriptions fees. In a first implementation phase, in which there is always a certain degree of scepticism regarding a new transaction technology –as it happened before with the ATM machines and the Internet e-commerce and e-banking.
It is a matter of time until the consumer has trust in the system. Nevertheless, the television is particularly suited for impulse buying of inexpensive products - CDs, books, pizzas, toys, merchandising, and so on. The Open BSkyB is the best example of a successful t-commerce initiative. Still, Portugal is a different culture and what may have functioned in England may not function here – going to a shopping mall during weekends is regarded as a leisure and family activity.
Once again, the broadcasters should focus on advertising, more specifically, and in brand new ways to pass the advertiser message. Of course t-commerce is a feature advertisers will demand, but is better not to emphasise that particular item since the consumers reaction may be above expected. What a broadcaster can provide the advertiser and it client is one of the most valuable and costly resources in our age: information!
One of the major advantages of interactive advertising is that the advertiser can monitor the user interaction with the brand and services. If someone decides to view an interactive ad, each time he clicks on some interactive feature a request is made directly to the advertiser’s server, who knows exactly what was his choice and how much time he spent on a particular zone of the interactive ad. Therefore, the advertiser can redefine the marketing strategy basis on accurate information that the consumer himself provided.

Business objectives will move from reach and market coverage to establishing the greatest share of customised messages for defined target viewers. Since its beginning , television justifyed the advertising costs based on the rating and share rates, and the marketers did not have alternatives nor exact instruments to define of a markiting campaing was really worth the cost. With Interactive Television, it is possible to target and identity a potential customer as on the Internet, as states the IDATE report “Interactive Television, direct marketing and e-commerce” published May 2000:

“On iTV, the access platform operator can regularly, and in a transparent fashion, download onto his subscribers' set top boxes complementary data which relates to their behavioural patterns or centres of interest, as previously stated during operator satisfaction surveys, for instance. Hence, by conditioning the execution of an advertiser's interactive application according to certain criteria, it is possible to target that portion of the population whose set top boxes' memory contains corresponding data193”.
More, according to the same IDATE report, Interactive Television ads are a way of supplying reliable and relatively qualified audience measurement. The platform operators' customer database is another priceless (or almost) asset for the advertisers. The best example to follow is, whose database allows them to customise their marketing operations to a level only compared to the traditional neighbourhood grocer, so to speak. Direct marketing operation is a key expression for interactive advertising.

“By exploiting interactivity, however, the television medium can also help advertisers to design a more personalised offer which is better tailored to the customer needs, thereby fostering true customer loyalty and enabling advertisers to locate, define and privilege those customers which represent the greatest asset194.

Of course, Television will remain a promotional and brand recognition tool as “mass medium”. But, Interactive Television now integrates the power of one-to-one comunication of the Internet. The overall goals of direct marketing, or one-to-one communication are outlined the following way by the the IDATE report “Interactive Television, direct marketing and e-commerce”:

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