Hype Blasters

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The future isn't what it used to be.

For starters, it's right on top of us. Much of our greatest science fiction is taking place right now. But instead of science-fiction writer Isaac Asimov's humanlike robot playmate or the Jetsons' jet cars, we have the Internet.

So it's time to dream new dreams. Let's fast-forward just five years, to the amazing world of 2005, to see what opportunities technology will open up for marketers:

* How about ads that are targeted not to a demographic or psychographic group, but to you specifically -- ads that know what you need, what you want, what you imagine?

* How about a house of smart appliances with Internet connections -- refrigerators that tell you when you're running out of milk and dryers that know to call the repairman before they break?

* How about a cell phone that knows where you are and can direct you to a great new Korean restaurant, or a Palm Pilot that delivers streaming video right to your hand?

* How about a TV that airs a pizza ad you can order from at the click of a button, with total integration between a channel and its Web site?

* How about underwear that knows your glucose level is dropping and automatically injects you with insulin or clothing that senses a heart attack coming and tells you to take a pill?

All these miracles are possible in the amazing world of tomorrow. These are not technologies in a lab, but working prototypes, many just about to hit the market.

The potential for marketers in just five years makes today's Web offerings look like a warm-up act. While these services will rely on the Internet to communicate between newfangled gadgets and more intelligent servers, most of the services won't be based on HTML for practical reasons.

For example, you can't run a Web browser on a cell phone screen, and you don't want one inside your shirt. A voice interface, already being advertised as a way to talk to your PC, may be the way to go, making "top of mind" marketing a real concept.

The pitfalls for marketers are also obvious. While today's Web is open, each of these new technologies has a potential gatekeeper -- cell phone operators, cable companies, appliance makers, even hospitals and insurance companies.

How the gatekeepers react may determine whether these visions become reality. In the 21st century, nothing is impossible. It's just a question of whether the market accepts it -- and whether you can break into the market.

The following scenarios are based on predictions by market researchers, futurists and company executives about the future's pressure points and where marketers will fit in.

Wireless

You've never been in this convention town before, and you need to host a business dinner in 30 minutes at a restaurant that's not too expensive because your company is on a tight budget.

Since this is 2005, you pull out your new cell phone, which features a flat color screen. The phone knows where you are, and quickly lists a half-dozen nearby restaurants. Your phone also knows you have a dining card that offers discounts, so it displays in boldface a restaurant that accepts the card. You're not sure it's right for your guests, so you click over to a multimedia tour of the place.

You see it has a private dining room, so you use the phone to reserve it. The phone then tells you how to get there, warning you if you make a wrong turn.

This isn't science fiction. By the year 2005, cellular devices will know where you are, says Eddie Hold, principal analyst for wireless services at Current Analysis, Sterling, Va., a competitive analysis firm.

Already, many of the elements in this scenario appear on Mr. Hold's desk. Cellular phones from manufacturers such as Nokia, Motorola and Ericsson feature touch screens and computing power, and they're becoming more like personal digital assistants such as the Palm Pilot, he says.

"You'll be able to do some Web browsing on those," he says. "You'll be able to do things such as MP3 downloads [of music]. Ericsson already has an MP3 attachment for their phones."

Third-generation cellular technology, expected to be widely available by 2005, will offer download speeds up to 2 Mbps, Mr. Hold adds. "The speed depends on where you are, whether you're moving. If you're in the car, you still can get 384 Kbps."

Josh Bernoff, principal analyst for Forrester Research, a Cambridge, Mass.-based market researcher, disagrees with Mr. Hold on the need for both the screen and the broadband access. But, he says, most phones in 2005 should know where you are, using enhanced 911 technology.

"The future is a voice interface," Mr. Bernoff says. "It's a phone, talk to it. It just calls up the information source, and the source pumps some bits out."

The best applications for these phones will be time and location dependent, he predicts. "It will give you just what you ask for when you ask for it. It's instant answers to your questions."

Barbara Boyle, global marketing manager for Ericsson in Richardson, Texas, says her company is already working on a service called Mobile Internet Advertiser for these new phones.

"It will send simple ads to your mobile phone, based on a preference you input and your agreement with the service provider," Ms. Boyle says, explaining that those revenues will help subsidize the cost of the service.

Apparently, that call we described was free.

Wearable monitors

You've been a diabetic all your life, but now it's become more serious. Your doctor has warned you to get medical help immediately if you feel a hot pain in your feet. Trouble is, you can't feel your feet.

But your new socks can. You're walking to your office when your beeper issues a warning. You turn around and head for the hospital.

Sam Joffe, president of FitSense Technology, Wellesley, Mass., says wristwatches that measure your glucose levels already exist. The form may change, but the direction is clear, he says. "Tracking glucose, or tracking people with cardiac issues, those sorts of chronic diseases where an intervention can make a big difference," represents a big, new market for sensor technology.

Alex Lightman, CEO of Charmed Technology, Sherman Oaks, Calif., is working on "microtubes" that make the socks possible. "The socks aren't computers. [Microtubes are] sensors interwoven into objects, with Internet connectivity," Mr. Lightman says. "The clothing [with the] microtubes will exude scents and cleaning chemicals so they clean themselves."

The microtubes will broadcast as well as sense, he says. "People will get their clothes for free in exchange for tiny scrolling ad bars woven into clothing," such as shirts and jackets, creating what are essentially little billboards to advertise products.

But Julie Tracy, director of marketing for Thoratec Labs, a Pleasanton, Calif., company that makes portable heart pumps designed to help heart patients survive until a transplant, warns that regulatory agencies could keep Mr. Lightman's ideas in the labs for decades.

"Because the [Food & Drug Administration] regulates our industry, the approval time for these devices can be quite long," Ms. Tracy says. Still, the technology continues to advance as it waits approval. Thoratec's pump technology is nearly 20 years old, she says, "but the [unit] has gotten a lot smaller, down to less than 20 pounds," from 300 pounds originally.

Dr. Ross Jaffe, a physician and managing director of Versant Ventures, a Menlo Park, Calif., venture capital firm specializing in medicine, agrees with Ms. Tracy.

"Will monitoring technology improve healthcare? Yes," he says. "Will wearing a body suit be normal in five years? I doubt it."

The bigger change may be in the use of tiny PCs worn by doctors to collect data and access databases. Doctors would have a small screen in front of one eye and wear the PC on their head or on their wrist, with wireless connections to the Internet.

In five years, these will become small, cheap, light and fast, says Mike Jenkins, chief technology officer for Xybernaut Corp., a Fairfax, Va., company that holds key patents in this area.

Xybernaut's "core computing" technology will let doctors plug their PC settings and voice patterns into any other system that supports it, whether it's a desktop, laptop or wearable PC.

"It will be smaller than a Palm Pilot, operating at 1 GHz," Mr. Jenkins predicts. And it won't need FDA approval.

A network for every home

An e-mail from your burglar alarm company informs you that the refrigerator repairman came to your house. You didn't even know the appliance was broken.

On your way home from work, you page the oven to preheat to 450 degrees so you can start baking a pizza as soon as you arrive. While you're at it, you tell the guest bedroom to readjust its temperature to 73 degrees -- your mom's visiting, and she likes a warm room.

By 2005, new homes will be built with servers that link to the Internet and to appliances. The tools for creating these "smart" houses are now on sale.

Honeywell, Minneapolis, and IBM-spinoff Home Director, Raleigh, N.C., are among the leaders in this new market. Mary Walker, CEO of Home Director, says she expects 25% of homes to have some network capability by 2005.

The opportunities here will be huge, say Russ Straate, business development leader for the home comfort and systems group at Honeywell. "When we demonstrate the business model, the application will take off," he predicts.

The brain of the smart home will be a server that fits inside a wall and connects to phone lines, electric lines and a radio that can reach other appliances, Mr. Straate says. Homebuilders will install this type of computer in new homes, while heating and security companies will retrofit it into older homes.

Monitoring alarms, light switches and thermostat adjustments will be the first applications, he predicts.

Installing this circuitry in an appliance would add $2 to $6 per unit, Mr. Straate says, but this manufacturing expense will be offset by benefits such as the unit's market research capability.

"The manufacturer will see how appliances are used and are performing, which helps subsidize the cost," he explains. "Then there's the whole issue of service. [The cost of] a service contract now is based on statistical information. But if you knew how appliances were really performing, you would be better able to determine a price point" for a service contract.

The appliance could also alert a repair center about worn parts before they break, he says. That way, the repairman would always arrive with the correct part.

There will be other applications as well, says Home Director's Ms. Walker. "The washing machine will tell you exactly how to wash something with a merlot stain on it," she says. "It will access stain tables on the Net."

Then there are the entertainment applications. "The PC will blow apart," Ms. Walker predicts. "You'll have displays throughout the house. You'll have storage that won't be inside the PC," music and video servers that distribute signals to any TV or speaker in the house.

The only limit is delivery of broadband service, she adds. "All this stuff requires a fat pipe. Until you have 50% penetration, most applications don't make sense."

Interactive TV

You're watching chef Emeril Lagasse prepare a dish on TV, and you decide you really need that "essence" spice he keeps talking about. So you squeeze your TV picture down and use your remote to order some spice, then return to your show.

Ordering what you see on TV is going to get a lot easier by 2005. Forget using 800 numbers, fax machines or going to your PC to find a URL. Couch potatoes are about to get a "shop" button on their remotes.

They'll get it from a service called interactive TV.

The National Cable Television Association estimates as many as two-thirds of homes reached by cable already have been upgraded for digital service, and digital should be universal in five years.

By fall 2001, stores should start selling set-top boxes with Internet and transaction support, cutting the normal three- to seven-year cable set-top replacement time in half, says Don Dulchinos, VP-advanced platforms and services for CableLabs, an industry research group in Louisville, Colo.

All this means that TVs with cable access should have some Internet capability in 2005. But it won't be the Internet as we know it, says Forrester Research's Mr. Bernoff, and sites shouldn't treat it the same way.

"While you're watching TV you'll be able to interact with what you're seeing, ordering pizza or letting the Ford dealer know you're interested in a Ford," Mr. Bernoff says.

Once marketers are dealing with qualified leads, each prospect becomes far more valuable, he adds. "Why show a commercial to 2 million people, most of whom don't care, when you can show it to 20,000 and get their names and addresses because they do care?"

Once the U.S. has the basic technology, he expects use to ramp up very quickly. "I just revised my estimates for U.S. penetration [by 2005], and we're talking about more than half of American homes, 55 million, with digital cable or satellite boxes," Mr. Bernoff says.

The key is to make interactivity a basic service, he adds.

Giving away interactive TV is not only easier than selling a cable modem, it's far easier for the cable operator to control, says Mr. Dulchinos. These will be "Internet-like services," not the Internet, and the higher-quality TV picture should keep most viewers glued to their sets.

Advertising to one

When ads weren't entertaining, they used to be a waste of your time. Now, you find that TV ads and Web banners seem to be speaking right to you.

It's not your imagination. By 2005, prospecting via the Web or TV should be just as targeted as in any other medium. Advertisers may not call prospects by name, but they will know all about them.

"The tools will be in place" for addressing Web ads to individuals, says Kevin Ryan, president of DoubleClick, a Web ad network. "But it never makes sense to go literally to one person."

Advertisers will need to target their pitches as well as narrow their targets, says Cliff Allen, president of Guestrack, an e-mail marketing company.

The market will determine when ads get too familiar, says Larry Jones, president of MessageMedia, another e-mail company. "They'll let you know when they feel offended," he says, adding that an essential ingredient for targeting prospects or pitches is a sophisticated database.

These databases do what good salesmen did in the past, says Mr. Allen. The prospect database, however, still needs to be matched with a pitch database. Web ad networks such as DoubleClick also use databases to track individual preferences, then serve ads based on them. But the market reacted negatively this year after DoubleClick sought to combine that data with data from Abacus Networks, a direct marketing database company it bought in 1999.

Mr. Ryan says this taught him an important lesson. "The vast majority [of prospecting] will be done anonymously" in 2005, he predicts.

Or, in the words of a recent "Cathy" cartoon strip, everyone wants to be understood, but no one wants to be known.

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