P&G, Conde casting Web deal

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Plan echoes marketer's involvement in producing early TV programs

Procter & Gamble Co. is close to a deal with Conde Nast Publications that will cast the glossy publisher in the role of online content provider to the marketing powerhouse.

P&G is also believed to be in talks with other World Wide Web sites and online services companies about similar deals to invest in content production.

"We have an interesting deal with CondeNet and P&G," said Conde Nast President-CEO Steve Florio. "It involves a whole program of creating content on the Web. We're becoming content providers for P&G products."

HISTORIC PARALLELS

The new-media strategy tears a page from P&G's corporate history. The marketer took a similarly experimental approach to TV in that medium's early days through its production of soap operas and other programming.

But it also raises questions about the online medium's controversial tendency to blur the lines between editorial and marketing content.

Mr. Florio declined to disclose details or the amount of money Conde Nast will get from the deal but said it is "significant." CondeNet is the company's new-media unit.

Norm Levy, director of advertising development, is P&G's point person for the new-media deals. He referred questions to a spokeswoman, who declined comment.

AN INTERESTING CHOICE

CondeNet is an interesting choice of a partner for P&G, since the publisher was among those that took a pass on the marketer's recent proposal to pay for online ads based only on the number of people who click on its ad banners, not those who view them. The plan caused an uproar and has found only a few takers so far, including search engine Yahoo!

P&G has apparently been approaching publishers for some time about investing in online content but seems to be stepping up its efforts now. In addition to Web sites, the company is believed to be in similar talks with America Online--which last week unveiled new initiatives to draw advertisers. AOL, which also turned down P&G's "click-through" proposal, wouldn't comment on talks.

P&G approached Hearst Corp. about a similar deal last year, said Susan Russo, until last month VP-ad sales and strategy for the company's HomeArts Web site.

`THINK HOLLYWOOD'

"They were looking at doing major, major investment deals," said Ms. Russo, now general manager of Rodale Press' Health Online Service. "What they said to us specifically was, `Think Hollywood investment.' They always cited the advent of television and the way they invested in soap operas."

P&G proposed a joint venture content site on the Internet separate from HomeArts, Ms. Russo said. She declined to discuss terms of the proposal, but said P&G would have expected Hearst to contribute significant resources to develop new content for the venture. Hearst ultimately decided not to pursue the deal.

GREY'S ROLE

Grey Interactive, New York, P&G's interactive media buying agency of record, has been working with the client on a variety of large-scale interactive initiatives, including deals with Hollywood studios. The agency is offering guidance to P&G on the Web site deals as well. P&G currently operates a corporate Web site and sites for several of its brands.

CondeNet is made up of Epicurious, a food and travel site, and Swoon, a new site about romance and relationships. The sites draw material from Conde Nast magazines, including Gourmet, Glamour and Details.

Contributing: Keith J. Kelly and Debra Aho Williamson.

Copyright July 1996 Crain Communications Inc.

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