Net technology connects data with marketers

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A new technology that can instantly connect TV sets to specific Internet sites is getting high marks and big bucks from advertising and media players.

Developed by DigitalConvergence.com, the keystroke automation technology has $50 million in backing from partners Young & Rubicam, A.H. Belo Corp. and ING Barings.

Sears, Roebuck & Co. and Forbes already plan to use the technology, which gives users direct access to online information by clicking on an icon during TV programming or by scanning a printed code.

"With one click or one sweep of the scanner, a consumer can be as far down into the Internet on a precise page of information that a programmer, publisher or advertiser wants them to see," said Michael Garin, president-chief operating officer of the newly formed DigitalConvergence.com.

CODE SCANNING

Forbes will mail the required KAT software and scanner to more than 800,000 subscribers in advance of its September "Best of the Web" supplement. By scanning special codes, readers will be able to view Web content pertaining to the products, services or subjects featured in print.

Eventually, Forbes plans to use KAT to make all its editorial and advertising content interactive.

Sears is planning to refer consumers to specific sales and product information on the Web by scanning a special code printed in newspaper inserts.

"Thinking about all the ways this technology can be applied makes my hair hurt," said Steve Koonin, VP-consumer marketing for Coca-Cola Co. "It is a breakthrough for anyone trying to make an instant interactive connection with customers and consumers."

Ad executives say the possibilities are endless for using the new technology to strengthen consumer ties, increase sales and even launch new businesses.

DigitalConvergence.com said it can provide advertisers with general demographic and preference data on its registered users without names or e-mail addresses.

`REVOLUTIONARY'

"This will revolutionize advertising on the Web because it establishes accountability and connection," said Mike Dolan, vice chairman of Y&R. "I know that every one of our clients who has been shown this technology has been blown away."

Among the major advertisers thinking about using KAT are AT&T Corp., CitiBank, Colgate-Palmolive Co., IBM Corp. and Toys "R" Us.

Time Warner's Warner Bros. has said it will be an early investor and use the technology. By scanning coded ads and ticket stubs, consumers could then access streaming film trailers, local show information and contests. Warner Bros. Music will seek similar interactive applications for its recorded music products.

DigitalConvergence.com expects to have more than 100 participating advertisers -- many paying $200 a year for exclusive licenses -- in time for KAT's planned midyear launch.

The biggest challenge will be assisting advertisers in creating compelling Web sites and applications, said Y&R's Mr. Dolan.

In turn, advertisers get the rare opportunity to track consumers interested in their products and tailor Internet product or service information to their needs.

Package-goods advertisers "will finally find out who is using their products," said Kevin Lavan, exec VP at Wunderman Cato Johnson, Y&R's direct marketing and interactive arm. "Until now, that consumer information has been convoluted and has taken time to compile."

IPO POSSIBLE THIS YEAR

DigitalConvergence.com, which is expected to be profitable in its first year, could be a candidate for going public in 2000, executives close to the company said. The Dallas-based company plans to double its 70-employee base this year and open offices in New York and London.

Fifty million CD-ROMs (to install the necessary software) and 30 million KAT scanners will be distributed free to consumers by Radio Shack and other strategic partners.

The software and KAT scanners also could be distributed free with popular food and drinks, such as 12-packs of Coca-Cola, with Pizza Hut home-delivered pizza or even movie tickets.

Ms. Mermigas is editor at large for Electronic Media

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