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LARGE PEPPERONI, HOLD THE PHONE WIRELESS ORDERING WILL EITHER BE A KILLER APP OR A FAST-FOOD FLOP

By Published on .

With huge ad budgets and products that lend themselves to home delivery, fast-food restaurants are among the most chased marketers for interactive media.

Pizza delivery, for instance, is considered Interactive 101. Media gurus argue that hungry couch potatoes are a natural target for commercials enabling them to order food through their TV screens at the touch of a button.

But for fast-food marketers, finding profits in an interactive environment isn't as easy as pizza pie.

A tentative partnership between Domino's Pizza and interactive service Eon Corp. is on hold. And Pizza Hut's test of an in-store interactive ordering system fell flat.

One problem: Fast-food delivery is already a convenient process. Many viewers can reach for a phone without leaving the couch.

"I have a magnet on my refrigerator I can use to order pizza," said Gary Arlen, president of new-media consultancy Arlen Communications, Bethesda, Md. "Pizza is the kind of thing people already know how to get. Making it harder for them to order with a confusing TV screen doesn't make sense."

Unlike automobiles or consumer electronics, fast-food just isn't the kind of complex product that needs to be explained to consumers, a primary benefit of interactive media.

Yet fast-feeders with the money to spend say interactive has its advantages.

McDonald's Corp. and Pizza Hut are likely participants in Time Warner's Full Service Network trial that begins in Orlando later this year. And McDonald's is teaming with NBC Online for a two-month promotion this fall.

"We're not doing [the NBC promotion] because of the current audience," said McDonald's Senior VP-Marketing David B. Green. "Interactive marketing is going to explode over the next five to 10 years and we want to start on that path. It's not only great for the less than few million people we'll reach now-it's the long-term exposure."

NBC Online delivers celebrity and programming news to subscribers of America Online and Genie. In May, NBC and TGI Friday's ran a promotion connecting the trendy eatery's young audience to the season finales of "Frasier," "Mad About You" and "Saturday Night Live."

Using TGI Friday's logo on NBC Online's opening screen to announce the promotion, the network and the restaurant chain ran a "click and win" contest with a grand prize trip to London. Each Friday in May, online users could engage in "live chat" with NBC celebrities.

"Most online subscribers are not pro-advertising," said Alan Cohen, NBC's senior VP-marketing. "What we're doing is creating unique, more interesting ways for subscribers to participate" in promotions.

Roughly 28,000, or 3%, of America Online's 800,000 subscribers registered for the click and win contest, a number Mr. Cohen says is impressive considering NBC did not mention the online element in TV spots supporting the general promotion.

The cost to TGI Friday's was "relatively minimal compared to the promotional weight NBC provided," said John Lee, account executive at TGI Friday's agency Richards Group, Dallas. The restaurant chain's only expense was printing point-of-purchase materials for its 265 restaurants.

McDonald's Mr. Green was mum on details, but Big Mac's fall promotion, handled by Leo Burnett USA, Chicago, should resemble the TGI Friday's promotion. Online subscribers, Mr. Green said, will be given a glimpse of McDonald's upcoming promotions.

But while fast-feeders appear to be nourishing online services, interactive TV is looking underfed.

Domino's started talking to Eon in early 1992 at the request of franchisee Frank Meeks, who runs 53 Domino's units in Washington, D.C. Mr. Meeks said he was enthusiastic after seeing a demonstration of Eon's service, which allows viewers to respond to TV programming using a remote control that sends radio signals to Eon's receiver.

"I wanted Domino's to realize the wave of the future is customers ordering through TV screens," Mr. Meeks said. Customers, he said, are better equipped to make choices when provided with Domino's full menu.

But delays in the rollout of Eon's service have stalled talks with Domino's. Eon is at the mercy of the Federal Communications Commission, which grants licenses for the use of radio frequencies.

Domino's, however, doesn't appear to be hanging the moon on Eon.

"We told them we'd be happy to participate once they're doing full-blown test markets," a Domino's spokesman said. "There hasn't been much correspondence with them in a few months."

Pizza Hut, meanwhile, confirmed it is considering joining Time Warner's Full Service Network. Fellow PepsiCo restaurants Taco Bell and KFC Corp. also are likely candidates.

The restaurants would offer menus on-screen or through a home printer and allow customers to punch in their orders using the TV remote control. The customer's address and credit card number would already be stored in the set-top box, making it simpler to arrange payment and delivery.

Time Warner is also exploring joint promotions that might, for example, reward a subscriber with a free pizza with a pay-per-view movie order.

"We're very eager to have a fast-food application in Orlando, and the only question becomes do we do it with a local franchisee or try to do it at the corporate level," said Curtis Viebranz, president of Time Inc. Multimedia, a unit of Time Warner.

"Every time you see an [interactive media] demonstration, you see the restaurant application, so it's clear everyone thinks it's a killer application for this technology," Mr. Viebranz said. Still, he admits, "Who knows whether it will be more or less compelling than the tried-and-true application, the telephone?"

Interactive advertising could gain importance as more fast-food marketers experiment with home delivery. Within the past year, McDonald's has begun testing delivery in Virginia and Canada, and KFC announced plans to boost delivery over the next few years from 10% of its units to 30%.

Marketers capable of sending goods through the mail are particularly well positioned to benefit from interactive TV, said Roland Sharette, manager of J. Walter Thompson/Online, Detroit. JWT client White Castle Systems, for instance, can ship frozen hamburgers.

"White Castle came to us trying to figure out the best way to enter that arena," Mr. Sharette said. "Frozen products like that go over particularly well on online services like CompuServe." The hamburger marketer is just beginning to consider its interactive options, he said.

In-store interactive marketing represents an interesting possibility. Restaurants could install ordering kiosks that would eliminate waiting in long lines.

But Martin Nisenholtz, senior VP-director of the Electronic Marketing Division at Ogilvy & Mather Direct, New York, cautions, "Most restaurants are very carefully engineered, and there's not a lot of space to put kiosks."

A regional Pizza Hut experiment supports this theory.

Two years ago, a handful of Pizza Huts in Chicago installed 8-inch TV monitors at each table. The goal was to allow customers to place their orders through the TV while Pizza Hut used the screen to promote its products, said Meade Rudasill, general manager of Pizza Hut's Chicago market. The TVs also were to carry music videos and cartoons.

But Pizza Hut scrapped the project when it became apparent the TVs were too big for the table.

"They were oversized and intrusive," Mr. Rudasill said. Current flat-screen TV technology would have made for a better test, he added.

McDonald's said it is still reviewing an initial test of McDTV, an alliance with Turner Broadcasting Co. that brought original programming and paid ads into McDonald's units in seven markets.

"One of the original goals of McDTV was to include interactivity," Mr. Green said, adding that his long-term goal is to see customers "coming into McDonald's for interactivity." A deal with NBC, for example, might give McDonald's customers the power to influence programming through comments made on a McDonald's kiosk.

"Our kiosks could determine what's on tomorrow's `Today Show,"' he said.

Or, more simply, what's for dinner tonight.

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