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It's almost as old as advertising itself, but direct response TV (DRTV) rode out its blip in popularity a few years ago and seems to be going from strength to strength. More than 25 per cent of all commercials are now direct response ads, with some sectors reporting massive recent growth. According to Billetts Media Consulting, DRTV was the only channel to enjoy an increase in spend by financial services companies in 2002 - up to £350million. In contrast, spend in press, cinema and radio all fell.

Combine this popularity with the fact that around 40 per cent of UK households now have digital TV, and direct marketers ought to be on the cusp of the next new development in this medium - ditching the phone number for pressing the little red button for interactive DRTV.

Interactive campaigns on the rise

But what exactly is the take-up? With many advertisers already die-hard users of DRTV, heading into iDRTV seems the logical next step. Currently the biggest players are the financial, automotive and travel sectors, with charities increasingly coming on board. And as a growing number of ads from FMCG brands, including Nivea, Rimmel and Silver Spoon (see boxout, page 46) also show, the medium is continuing to attract new sector entrants.

The NSPCC ran its first iDRTV ad in August to test response rates against standard DRTV. "We hope interactive TV will prove a new channel for charity fundraising," says John Turner, NSPCC interim donor recruitment manager. "By testing the interactive version against the control we'll discover if interactivity lifts response rates and appeals to different audiences."

So far, Sky, on its interactive platform Sky Active, has run almost 400 campaigns. "Around 76 per cent of advertisers have run follow-up campaigns," says Sky's head of interactive services Robert Leach. "So we know it works."

Some advertisers now run interactive ads year round. "Advertisers such as National Accident, Regency Mortgages and Royal Bank of Scotland are consistent with their interactive advertising," says Keith Rattray, iTV director at media company Carat. "They're always on TV, with the right message and the ability to dispatch application forms to viewers. Interactive ads are an integral part of their campaigns."

According to many, iDRTV couldn't have come at a better time. "As traditional channels get more saturated, everyone's looking for new ways to go to market," says Marc Lewis, associate director at WWAV Rapp Collins Media. "Interactive has the potential to grow new business."

Even better, interactive TV is also attracting new audiences - those who perhaps wouldn't have responded to a traditional DRTV ad. For example, 10 per cent of 16-24 year olds regularly use interactive TV according to figures from analyst Nvision.

But not everyone's convinced. Advertisers are holding back for a number of reasons. For one, there is the fear of alienating the DRTV audience. "The public hasn't entirely picked up on digital TV yet," argues Paul Farthing, managing director at agency Target Direct, which works with a number of clients such as Marie Curie and Amnesty International, which are still trialling DRTV. "Thirty per cent of 50-pluses have access, but only four per cent claim regular usage. As this is defined as two to three times a month, this isn't very regular."

Two of the biggest prohibitors are cost and technology, yet interactive ads aren't necessarily expensive or complex to do. A normal ad can be given an interactive bolt-on mechanism fairly easily, and templates simplify the creation of interactive ads.

The risk with template-driven ads is they tend to look similar, and for those who want to be more creative, there has been a lack of technology available.

Things are starting to look up though - this year has seen the emergence of several products that aim to make creating an interactive ad easier. iTV advertising services company Press Red launched BlackBox Designer last month, which claims to cut the creation time of an ad from six weeks to 24 hours.

"It means agencies can now take responsibility for creating content within the templates," says Chris Moreton, CEO of Press Red. "Until now, it's been in the hands of developers and programmers because of its relative complexity, limiting creativity."

Counting the cost

So what about the cost? A basic iDRTV ad can be created quite cheaply if a brand already has a TV presence. "One limiting factor is that you need a TV ad to sit behind any interactive ad," explains Lewis. "Which means if an advertiser hasn't done TV before, they have to have an ad that works in its own right first. Everything that goes behind normal TV has to be good, and in addition, you need interactive elements."

These costs add up and affect cost per lead. With no return path from the ad to the advertiser, they have to go through Sky to get the data on each respondent. Sky charges 50p for each and for FMCG brands and charities in particular, it adds up. "Cost is a big issue," says Donna Barradale, founder of iTV specialist Zip Television. "A lot of FMCGs are refusing to pay 50p a lead - it's a lot of money."

But if the responses were enough to enable advertisers to recoup these costs and gain ROI, marketing directors' ears may well prick up. Many high profile case studies talk about strong response rates, but there's a question mark over how much of this translates into sales, and how many of these respondents come from the brand's actual target audience.

There are ways around this. Renault has run interactive campaigns through Carat to drive brochure and test drive requests for its Clio and Laguna models. In order to understand who's responding, Carat follows up the brochure requests with a phone call inviting respondents for a test drive.

"To stop children responding, we insisted on respondents giving a phone number and told them they'd get a follow-up call," adds Carat's Rattray.

But to really push interactive advertising forward, clients need to talk about what they're doing and the results, and so far there has been a lack of case studies. Without proof that an iDRTV ad is financially viable, few marketers are going to risktheir budget. "People aren't yet confident enough that any money they put behind an ad will be returned," says Lewis.

This lack of openness frustrates Simon Smith of iTV creative partnership Weapon7. "In interactive TV, no one's brave enough to say this failed and this is why," he says. "It means there's no learning curve."

Despite this, there's no denying iTV has great potential for audiences and advertisers. The next step, according to Ian Haworth, creative director at WWAV Rapp Collins, the agency behind the NSPCC's and Cancer Research UK's first interactive ads, is to move beyond the interactive bolt-on mechanism used so much now.

"The big opportunity is in creating an ad solely as an interactive piece of communication," he says, "giving the opportunity to interact at various points of the commercials." The whole thing is a direct marketer's dream and a fantastic playground for creativity." But with the number of benefits interactive advertising offers direct marketers more or less equalled by prohibitive factors, it remains to be seen how long it will be before it really takes off.

INTERACTIVE GAME HELPS RELAUNCH BRAND FOR SILVER SPOON

Silver Spoon used an interactive TV ad to relaunch its Crusha milkshake mix brand in August. The ad centred on a game called Crusha Cows, aimed primarily at the brand's target audience of 10-15 year-old boys with the highest scorers winning entry into a competition. It was developed by specialist game agency 3RD sense, and links the viewer directly from the ad to the start of the game.

As well as driving brand awareness, the ad drove sales through a 'cheat code' element that enabled players to try and gain a high enough score to enter the competition through cheating. To get a cheat code, players had to input the last four digits of one of four available Crusha bottle barcodes. When they entered the competition, a code was generated that indicated which barcode was used, if any, providing Silver Spoon with information on product purchase.