No advertising, but more sponsorship?

Abstract

PurposeThis paper is dedicated to answer two questions: What is the business model of interactive television (iTV) ad at China’s Spring Festival Gala; and Why the business model of iTV ad creates different commercial values for different firms.Design/methodology/approachThe two questions can be summarized as what and why problems; so, this paper adopts the method of the qualitative case study. For the first question, this paper uses the method of system activity diagram to design the business model. For the second question, this paper proposes a new analytical method – voice, incentive and convenience (VIC) model, which is used to analyze the commercial value of iTV ad. The proposal of VIC model is based on Wang et al.’s Iceberg theory.FindingsThe effect of interactive advertising is significantly better than that of traditional advertising, and interactive advertising is becoming the first choice for marketers. The business model innovation of iTV ad brings new business opportunities. In addition, the larger the area of the triangle surrounded by the three elements of VIC, the higher the commercial value of iTV ad.Originality/valueCurrent business model studies focus on business model definitions and innovations, whereas the studies on business model evaluation and its influential factors are rare. A new analytical model named VIC is proposed. It explores the effect of VIC on the commercial value of iTV ad and provides a reference for the quantitative empirical analysis. The combination of activity system theory and VIC model contributes to the understanding of the explicit knowledge and tacit knowledge of iTV ad business model. This framework can be used to guide TV stations and stakeholders for business model innovations and optimizations.