Agencies wrestle with iTV universe

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Marketers, scrambling to find their way through a welter of emerging interactive technologies, aren't alone.

Agencies, both traditional and interactive, are helping clients navigate the unproven terrain of interactive TV and related technologies such as digital video recorders (DVRs), maligned as "ad zappers."

Agencies have more than a passing interest-holding companies Interpublic Group and Omnicom Group are equity investors in ReplayTV. TiVo counts broadcast networks and cable operators among its investors, and last year formed a relationship with Omnicom that gives its agencies the ability to test new ad models on TiVo's Personal TV Service. As new consumer technologies such as DVRs, and content delivery systems offering the promise of targeted advertising and promotions enter the market, advertisers can't afford to ignore them.

Neither can agencies, which have quickly stepped into an advisory role, establishing interactive and broadband practices committed to helping clients make sense of new digital technologies. They also guide clients in choosing alliance partners and in understanding the implications of broadband content delivery to the home. They help make sense of the current landscape, as well as envision future opportunities for the intersection of content, commerce and one-to-one marketing.

Tim Hanlon, director-emerging contacts, at Bcom3 Group's Starcom MediaVest Worldwide, Chicago, is part of the agency's specialist team. Mr. Hanlon sees himself as an educator: "Essentially, our entry point with clients is more about how we see media changing in the next five to 10 years. Certainly, television is the most compelling [media] for the majority of our clients. There are a lot of traditional clients that are addicted to television, anything that changes the paradigm of television immediately becomes a concern," he says.

Indeed, as companies like ReplayTV and TiVo began marketing personal television systems, Mr. Hanlon and cohorts at other agencies, hammered out charter advertiser deals for their clients. Late last year, Mr. Hanlon was close to signing three clients, which he declined to name, to advertise on the Replay system when the company pulled the plug on its direct-to-consumer business model. It's now licensing its software to cable operators and set-top box manufacturers. Among Starcom MediaVest clients are Discover, Kellogg Co. Nintendo of America, Miller Brewing Co., Pillsbury and Walt Disney Co.'s Walt Disney World.

Separately, deals Replay had with Coca-Cola Co., Ford Motor Co., Toyota Motor Sales USA and Universal Pictures were scrapped.

Despite the pitfalls inherent in any emerging and untested new media, agencies are forging ahead with clients. Marina Hahn, exec VP-strategy and entertainment, at J. Walter Thompson, New York's Content unit, takes a holistic approach: "We don't really look at it as interactive advertising ... we're working with myriad clients always with an eye toward how do you take this offline property and migrate it online and vice-versa."

Content, which is separate from the company's interactive unit digital@jwt, launched more than a year ago via an alliance with Hollywood producers Brillstein-Grey Entertainment. The unit will help jwt clients such as DeBeers Consolidated Mines, Kellogg, Merrill Lynch & Co. and Sun Microsystems to develop original, interactive content. By mid-2001, Ms. Hahn says she will have seven clients in the Content pipeline leveraging diverse genres ranging from short films and radio, to retail experiences and TV series.

"You can't just reach your target with 30-second commercials anymore," she says. "It's all about creating original content, not just about promotion or sponsorship online, it's got to be seamless with that brand personality."

Changing the consumer's experience of advertising is also one of Content's goals. Late last year, Unilever's Lever 2000 brand embarked on one such interactive media program with digital@jwt, New York. Unilever, working with Excite@Home's @Home broadband network, allowed consumers to create, edit and play their own commercial. Facilitated via rich media tools, participants could select characters, music, copy and product shots for their commercial. Lever had multiple goals-to raise awareness, spur sales and leads.

Most agency digital professionals agree that the line between entertainment and advertising has blurred in all media to such an extent that marketers must create clever and fun new ways to reach their audiences.

Agency executives currently experimenting with new media and DVRs maintain they work best when broadcast quality video is used and the message is blended seamlessly into content. The options are numerous-ranging from vignettes, solutions-oriented messages, short-form programming, sponsorships movie trailers and promotions, according to David Adelman, senior VP-Director of Convergence Media, Y&R Advertising's, The Digital Edge. Among the clients Mr. Adelman is advising: Campbell Soup Co., Sears, Roebuck & Co. and GlaxoSmithKline. "A lot of my clients are educating themselves, and I'm here to help. ... It's a long sell," he says. Mr. Adelman, like his cohorts, was keen on Replay's charter advertiser program. Since Replay pulled the plug on its business model last November, Mr. Adelman has pursued other opportunities on behalf of his clients.

The question is: What do consumers respond to, and why? In the case of DVRs, "What it comes down to is if a user perceives value, they'll be more willing to give a certain level of information," says Kevin Wassong, director, digital@jwt.

"Right now, we are very curious about the consumer behavior, about how people use the boxes," says Mitch Oscar, senior VP-director of media futures, Universal McCann (See story below). "Anybody who's in marketing, has to be curious," he says, adding that several agency clients are in discussions with providers of interactive TV technology. Among them: Johnson & Johnson, Nestle, Microsoft Corp. and Motorola.

Interactive and Web integration shops have taken the lead in experimenting with new iTV technologies. In Europe, New York-based i-shop Agency.com has run trials with Unilever, British Airways and others, where the infrastructure for interactive TV is more advanced.

In the U.S., Agency.com client Coke is working directly with RespondTV to test various promotional offers. Agency.com expects to conduct interactive TV trials on behalf of at least six clients during the first half of 2001, mostly in the entertainment arena.

"We tell them [clients] `here's what you can do today,' you can start to provide additional information, enhancements, without breaking up the broadcast," says Aaron Sugarman, regional president, New York, and head of the applied concepts lab at Agency.com.

For the American Film Institute, Agency.com teamed up with the Discovery Communi-cations' Discovery Networks to demonstrate an enhanced TV experience across multiple platforms and delivery vehicles. The agency devised an interactive prototype for Discovery's "Extreme Rides" show about roller coasters in which TV viewers control the experience, even choosing camera angles. Mr. Sugarman says visceral experiences that are closely tied to content work well in the interactive realm. In the future, Discovery could include sponsors with promotions to various theme parks, and other tie-ins, he says. "Depending on the [set-top] boxes there could be a build your own roller coaster game," he says. "If your client is a cool cell phone company, there could be product placement that fits the theme of a techno-thriller show."

"Maybe Coke does couponing," he adds, explaining that consumers could be directed to nearby stores based on the cable operator's knowledge of their address.

Chris Kilmer, head of broadband-future TV at i-shop Razorfish, agrees the possibilities are infinite and have staggering implications especially for his clients-broadcast networks such as ABC, CBS and PBS, and cable operators including Cox Communications.

"A lot of what we're doing is educating them [clients] as to what the technologies are, and the landscape over the next 18 months," Mr. Kilmer says.

"In a lot of ways what TiVo and Replay are trying to become are the broadcasters for television," he says. Our clients are "coming to us saying we know this technology is out there, we know it's scary, and it's going to change the way the industry is going," he adds. "They need to make money and they also need to extend their brands."

Ad agencies can take the opportunity to be in the driver's seat, at least initially, in guiding clients through the iTV universe.

"Unless the advertising community supports these initiatives, they won't develop properly or intelligently," Universal's Mr. Oscar says.

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