Ford Motor Co. and Domino's Pizza are close to signing with AT&T Corp.'s Tele-Communications Inc. to become partners in interactive and addressable advertising on cable TV.
It would be the first signings since TCI came under the world's largest telecommunications company. The two marketers would join Kraft Foods in an alliance with TCI to help develop TV advertising for the new millennium.
Neither executives from the two advertisers nor TCI could be reached at press time. The agency for both Ford and Domino's is J. Walter Thompson USA, Detroit; executives with knowledge of the situation could not be reached for comment.
Kraft and TCI announced their landmark deal in February 1998, but TCI had made no other major agreements because it was busy closing the AT&T pact. It had a tentative deal with Bank of America and Intuit that was somewhat different than the Kraft package, but that has since fallen apart.
Last year, TCI's then-Chairman-CEO John Malone held an ad summit at company headquarters to entice advertisers to partner in the ad-technology work.
Like the Kraft deal, the Ford and Domino's pacts--whose prices haven't been disclosed--primarily get them commercial time on local TCI cable systems in the near-term. But the driver of the deals is long-term: getting in on the ground floor as one of the biggest cable operators develops interactive and addressable advertising.
Part of the future value is what Mr. Malone has dubbed the "walled garden."
"That's Internet-based functionality within the digital set-top box that operates on [universal Internet programming language] HTML," said one executive familiar with the concept. "It looks like an America Online, but you only have to use your remote control, not a keyboard, and you can't go surfing all over the Internet."
For example, while watching a football game, a message could pop up asking a viewer if he or she wants to order a Domino's pizza.
Said the executive: "You'd go into the walled garden, order what kind, the size, press a button and then the pizza is delivered to your house."
Because the viewer is on the cable system, Domino's would already know where to deliver the order.
Kraft, as part of its deal, is working on targeting ads to specific households.
Eventually, the package-food giant would like to experiment with sending coupons and recipes to a responding viewer's house.
"What Kraft is doing is making sure TCI includes the utilities [that] marketers will need in the future," said Alec Gerster, chairman of MediaCom, the Grey Advertising unit that helped broker the Kraft/TCI agreement.
"And from Kraft's side, they have to how to use the utilities."
Contributing: Judann Pollack.
Copyright April 1999, Crain Communications Inc.