What is it: On-demand TV advertising involves video ads displayed in digital video-on-demand, DVR, and IPTV video streams, as well as inter-active program guides. Currently, on-demand advertising is more prevalent at the local level than nationally. It is still in the pioneer phase and offers unique opportunities to innovate DR marketers.

Who does it: According to Peter Koeppel at Koeppel Direct, everyone is getting into the game. TiVo has an interactive advertising platform that was developed specifically for direct response advertisers (and why not DRTV spots are some of the least fast forwarded ads on TiVo). Expo TV provides on-demand infomercials. Time Warner, Comcast and Cox offers Exercise TV, which reaches 22 million homes, and where Jake Steinfeld’s Body by Jake ads are inserted into on-demand workout sessions.

Time Warner, DISH, and Comcast offer short-form spots that telescope to long-form, on-demand advertising. DISH viewers can utilize their remotes to review a product, request information or purchase it directly on screen. Cox will be dynamically inserting ads into VOD content in 2008.

According to Koeppel, Time Warner also has a feature that lets digital subscribers re-start live programming, but does not allow them to skip ads in order to counter ad skipping. All of this activity (and all of this money being spent) means one thing, on-demand TV is here to stay.

Why bother: Unlike traditional “linear” television advertising, on-demand TV advertising can be tracked and quantified muck like Internet advertising. It is highly suited to direct response advertisers, since it enables the viewer to respond to offers, find out more information, or order a product or services. It also allows infomercial advertisers to most effectively utilize a combination of short-form and long-term advertising formats.

Internet protocol television (IPTV) is getting a slow start in the U.S. for a variety of reasons; however, its promise is true convergence of television and Internet. DRTV companies that have established themselves on the internet, such as AsSeenOnTV.com, see IPTV (and any technology that blends Internet and television) as a way to skip to the front of the line. According to Daniel Fasano of AsSeenOnTV.com, “our brand is one of the best positioned and most widely recognized by consumers across the two major viewing channels: television and Internet. Our “Powered By” solutions successfully bridge the gap between TV and Internet, allowing a seamless transition from viewing content to creating transactions in real-time. In short, our bridge allows for on-demand purchase advertising on a global scale.” Fasano sees his solutions working in today’s world, but also becoming a de facto “infotainment” standard as on-demand TV matures.