Catalina expands in cyberworld

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Catalina Marketing Corp. is extending package-goods companies' reach beyond the cash register to interactive "touch points" including interactive TV, home and Internet appliances, and wireless devices.

With these high-tech moves, St. Petersburg, Fla.-based Catalina ventures beyond the supermarket checkout line, where the company built its business by helping package-goods marketers and grocery retailers deliver promotions, ads and incentives. Catalina also reaches consumers at home via direct mail, as well as online through its ValuPage supermarkets promotions site (, started in 1996.

Some of these other interactive media already are being used as communications vehicles, but Catalina hopes to change the model by delivering targeted offers the same way it has with its other venues-by using consumers' previous purchase behavior obtained from their frequent shopper card numbers.

Package-goods clients saw the need for such an approach, complaining to Catalina that most interactive companies claimed to be targeting based only on geography or demography, not by previous purchase behavior.

"Our clients know that that is the biggest fallacy that ever walked the earth," said Eric Williams, VP-research and development at Catalina. "They came to us and said, `You've got to help these guys or else it's doomed for failure.' "

By asking consumers to enter their loyalty numbers on an interactive TV screen, for example, Catalina can overlay a localized promotion that runs simultaneously on the bottom of the screen with a national ad.

"Our goal out of this is to offer the incentives, promotions and advertisements that have the most relevance to the particular customer," Mr. Williams said.

Catalina is partnering with two interactive TV companies, Re-spond TV and Commerce TV, to install this program on set-top boxes in the first quarter of this year. Commerce TV is building a cable network to deliver content from advertisers or cable companies to particular demographic and geographic regions and is hoping to further develop the network to the level of individual subscribers, thus opening up more possibilities for Catalina.

"There are ways we can match up some of their affinity card programs with some of our subscriber information. Then we can match up those shopping patterns with subscribers' profiles and really deliver offers based on their own behaviors," said Evan Saks, director of marketing at Commerce TV. "Everything's about targeting [with Catalina], and it's all based on people's previous preferences."

Catalina also is working with Canon USA to deliver incentives to consumers via their home printers, a process that will become easier as broadband access increases. In the next couple of months Canon and Catalina will begin a test in which ValuPage incentives will be printed directly from customers' printers.

Catalina "was one of the first companies we approached because it just seemed like such a logical type of content and something that would be very useful to consumers," said Doug Barr, director of product planning at Canon Information Systems.

Catalina also is experimenting with mobile phones as touch points. It's part of a four-month test with wireless interactive marketing company SkyGo, Redwood City, Calif., which is delivering promotions and ads to 1,000 consumers in Boulder, Colo., who opted in to receive them via Internet-enabled cell phones that allow two-way communication.

"I'm allowing consumers to be in charge of their data," Mr. Williams said. "They tell me they would like me to help add value to these communications vehicles" by offering their loyalty card number in exchange for incentives and promotions.

Catalina hopes to roll out the service on a market by market basis after analyzing the results of the test ending in February, Mr. Williams said.

Still in development are applications like a device Mr. Williams called "the garbage can scanner," enabling people to maintain a virtual shopping list by scanning the bar codes on used-up products before they're tossed into the trash. Catalina hopes to make this available by midyear, in addition to a refrigerator equipped with a built-in Web screen allowing consumers to scan groceries and download Catalina's ValuPage offerings right onto the screen.

Mr. Williams admitted that 2001 will be a year of trial and error, and he anticipates that the company's interactive strategy will begin to boost the bottom lines of Catalina and its clients in the first half of 2002.

As Mr. Williams explained: "The argument [by package-goods companies] has always been, `If I could tie TV advertising or motion advertising to promotions, it would be the next major move in the industry.' We believed them, and that's why we're focusing so strongly on this."

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