P&G STILL EXPERIMENTING
For Procter & Gamble Co., interactive marketing remains experimental, but 1997 was a year for expanding the scope of its experiments with new programming ventures and a further integration of interactive projects into overall marketing.
P&G provided seed money and was an early advertiser for the ParentTime at Work channel on PointCast in an effort to reach working women. (ParentTime's site is also funded by Time Warner.) And it financed phys.com, a women's health and fitness site, with Conde Nast.
P&G also moved to give two of its existing brand Web sites greater visibility by integrating them into other facets of marketing. In May it launched a spot for Tide by Saatchi & Saatchi Worldwide, New York, featuring a dad checking out Tide's Web site for stain removal help. It also used in-store messages issued by Catalina Marketing Corp.'s Checkout Coupon system to steer buyers of baby products to its Pampers site.
INTEL DOMINATES SPENDING
Intel Corp. opened its estimated $750 million annual "Intel Inside" co-op program to the Internet, allowing PC makers to put 10% of their computer chip co-op money into Web ads starting in January. Including the required matching contribution from PC makers, this could bring up to $150 million in spending to the Web. Intel is already the world's No. 1 tech ad spender, and this move should make it the top Web ad spender.
Intel also is promoting research and offering money and technical assistance to major consumer advertisers to produce showcase Web ads with the latest technologies and innovative interactive twists. What's behind all this Web promotion? By pushing applications that require high-power PCs, Intel expects to grow the PC market and create demand for its whizziest Pentium II chips.
E-COMMERCE AT DELL
Dell Computer Corp. is selling $3 million a day in computers from its site, giving it annualized Web sales of $1 billion.
Dell is winning on the Web by offering customers an easy way to buy and get service and support. Web sales have grown to something less than 10% of Dell's revenues since the world's No. 3 PC marketer began selling over the Internet in July 1996. Observers note it's impossible to say how much is incremental and how much is new business, since some buyers are shifting from buying over the phone. By any measure, the Web sales growth is startling. Dell's daily Web sales are more than five times those of the popular online bookseller Amazon.com.
GM'S VIRTUAL SHOWROOM
General Motors Corp. made extensive use of the Net to market 1997 models.
This fall, it launched its Net car-selling service in California and the Pacific Northwest via a new Web site. The site offers vehicle info, prices and GM dealer inventory; GM said it may expand the program nationally.
GM's Oldsmobile division also recently kicked off its "Intrigue Virtual Mystery Tour." An 18-wheeler with video and cyber stations is visiting 110 cities to tout the new sedan. Participants can design their own customized Web site while they learn about the Intrigue. GM is also experimenting with new online approaches, such as integrating its Intrigue product into the content of Web sites, such as a recent game on the NBC site in which users clicked on car parts.
Forget push. Forget pull. Levi Strauss & Co. decided to market itself on the Web by giving prospective customers newly developed Shockwave programs called Eye-Candy. Eye-Candy icons, developed by Organic Online, San Francisco, will be scattered on a number of music sites, such as thehub.com, wallofsound.com and SonicNet's Addicted to Noise area.
Rather than being linked to a Web site, users get to indulge in a mini-interactive treat, such as playing a videogame, in the ad.
NBC'S INTERACTIVE STORY
NBC continues to be the most innovative TV network in cyberspace, apart from its partnership with Microsoft Corp. in MSNBC. In "Homicide: Second Shift," an online storyline derived from NBC's "Homicide" TV series, the network started extending its TV brands to the Web with interactive stories found only online. With Yahoo!, the network started NBC Live, a chat service featuring actors who appear in NBC series. The broadcaster, No. 1 in the ratings--with a large advantage in the 18-to-49-year-old demographic category to boot--has also been quick to bring advertisers to the Web as well, through the leadership of Patricia Karpas, VP-Internet advertising and client services
Whether it was the Gap sponsoring NBC's teen site At the Max, or Oldsmobile backing the Pretender Adventure area, the network has made tying-in with marketers a top priority. For local TV affiliates, NBC launched its Interactive Neighborhood, which will combine the local affiliate's content with links to a number of other content providers. Other new media projects include Intercast (with Intel) and a deal with Wink Communications that gives viewers enhanced information about programming and commercials.
WB ONLINE BUILDS TRAFFIC
Warner Bros., through its Warner Bros. Online unit, ranks as the No. 1 studio in selling online advertising and No. 33 of all Web sites, according to Jupiter Communications' WebTrack publication. Warner Bros. Online has been a leader in putting ads in environmental settings on its virtual lot. It won a Casie award for working with IBM Corp. and creating special banners featuring Looney Tunes characters playing chess to promote the match between IBM's Deep Blue computer and chessmaster Gary Kasparov. Key to Warner Bros.' success is the marrying of content with technology in engaging ways, whether it was licensing ToggleThis technology so users can interact with characters on the computer screen, doing "ER" Live in conjunction with NBC or Interactive Mondays in partnership with America Online and Warner Bros.' syndicated "Rosie O'Donnell" TV show.
After watching rival bookseller Amazon.com rack up online book sales, BarnesandNoble.com has gained considerable market share since opening its site in May. Even before launching, the No. 1 offline bookseller had locked up an exclusive distribution deal on America Online, a deal that last week it expanded into a four-year, $40 million exclusive partnership. (Amazon.com has exclusive marketing rights on AOL.com.)
It also negotiated a three-year deal with Lycos under which the publisher is giving the search engine a share of revenue from books sold--which one analyst valued at $15 million. A deal with Microsoft Corp. gave it access to 2.5 million consumers a month as the exclusive bookseller for MSNBC, Microsoft Investor and Expedia. It's also pinned down exclusive bookselling space on the New York Times Online and the PointCast Business Network.
WSJ INTERACTIVE EXPANDS
Online financial paid-subscription magazines made news this year, led by the Wall Street Journal Interactive Edition topping 150,000 paid subscribers. And while WSJ Interactive has been building on success for a few years, 1997 also saw a handful of newcomers anxious to build their own subscription bases. TheStreet.com, Money.com Plus and SmartMoney Interactive all debuted this year, with competitive pricing around $20 per month and a cadre of advertisers eager to gain access to the eyeballs of the upscale, financial services demographic. When the market adjusted in late October, the paid sites reaped the benefits from nervous investors who went online in droves for updated news.
Meanwhile, WSJ Online moved ahead with new revenue models. From its Careers site for instance, it earned money from job listings and advertisers. It also added sports content to its site with a partnership with site Total Sports.
AOL SELLS REAL ESTATE
After starting the year with a marketing mess on its hands, America Online bounced back with impressive ad revenue and subscriber gains.
AOL quelled its busy signal complaints and built its subscriber base to 10 million, about four times more than the Microsoft Network, its closest competitor.
AOL also scored a coup in its bid to take over CompuServe Online Services last September.
Real estate on AOL became a hot commodity, with AOL announcing multimillion-dollar deals almost weekly. By the end of its fiscal year June 30, AOL reported close to $300 million in advertising, merchandising and e-commerce revenue. Combined, that amounted to 12.4% of AOL's total revenue, compared to 9.3% the year before. Highlights from a handful of exclusive deals include: 1-800-Flowers for $25 million, Tel-Save Holdings for $100 million--to market its long distance service to AOL subscribers--and direct marketer CUC International for $50 million.
Copyright December 1997, Crain Communications Inc.