Take, for example, "virtual ads"-ads that do not exist other than on the TV screen. The use of these ads is a classic case of fixing something that isn't broken.
For those fortunate enough to have missed one recent "experiment," some highly thought of companies well versed in TV advertising and sports sponsorships placed virtual ads during a recent telecast of a tennis event. The companies' names electronically appeared between the base line and the service line of the tennis court throughout match play.
One has to wonder what these companies were thinking. True, positive exposure on TV is valuable, whether by means of TV spots that impart a desired commercial message or by the positive good will and more subtle associations that come from well-placed signage at a televised event. But exposure via virtual ads creates negative value for all.
For the viewer. No one can seriously believe viewers appreciated what can best be described as an unprecedented and unwarranted intrusion of electronic commercial messages. The new virtual ads didn't even have the meager justification of providing on-screen scores or updates during match competition. Surely being forced to watch electronic messages during play may be all it takes to make even die-hard fans turn off their sets.
For the purists. By analogy, virtual ads become even more reprehensible for some viewers than colorizing classic movies. Advocates of the colorizing cite the greater potential audience for colorized versions of classic movies and even argue that colorization process allows today's audiences to overcome the limits of yesterday's technology. But what conceivable justification can be made for electronically imposing a commercial message in the field of play? Perhaps the only reason for virtual ads is a misguided belief that any TV exposure is valuable, coupled with the uncritical use of quantitative analysis techniques, which apply a value-per-minute of TV exposure based on number of viewers.
For event sponsors. With the advent of virtual ads, sponsors-who often spend six- and seven-figure sums to subsidize events, players' salaries and ticket prices-will have to rethink their strategies. At best, event sponsors' on-site signs are seen only a small fraction of the time and certainly not in as prime a location as the virtual ads. Now event sponsors also will need to be concerned that broadcasters may use virtual ads to obliterate on-site signs and replace them with virtual ads for other advertisers.
For TV advertisers. Virtual ads pose a threat to TV advertisers as well. With a limited number of spots available on a broadcast of a sports event, advertisers have some measure of exclusivity. With virtual ads, the potential amount of ad time and number of advertisers will be far greater, limited only by the duration of the telecast. As a result, the value of customary TV spots will plummet. Aside from the disagreeable aspect of excessive commercial clutter, TV advertisers-like the sponsors-may also suffer from declining audiences and reduced exclusivity.
For the broadcasters. Virtual ads may result in one or more of the following: the loss of revenue-which may or may not be offset by virtual ad revenue-from the sale of spots; higher rights fees to prime sports events to offset reduced receipts from on-site signs; diminished audiences; increased interest in pay cable and pay-for-view sports events in order to view events without electronic signage; potential Federal Communications Commission problems regarding permitted number of commercial messages per hour, as well as disclosure of commercial payments; and the possibility of increased governmental regulation.
Let's hope that-as one of the companies that participated in the televised tennis event admitted-the use of virtual ads was intended only as a test of new technology. Hopefully, upon reflection of the test results, it has become clear that no one wins with virtual ads.
Mr. Reich is a partner in the law firm Loeb & Loeb, New York.