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SCALING NEW-MEDIA MOUNTAINS FOR AGENCIES THAT DON'T HAVE A CLEAR STRATEGY,IT'S A LONG WAY DOWN

By Published on .

People who climb mountains have a lot in common with many traditional advertising agencies that create interactive marketing communications these days. They do it because "they must," to embrace a challenge. And, ultimately, the bottom line in both cases is survival.

The volume of interactive marketing messages promises to rise like a majestic mountain in the coming years, while that of traditional media messages remains relatively flat.

The situation is reminiscent of the '50s and '60s, when commercial TV took off as a new medium. No major advertising agency survived that didn't embrace TV as a creative marketing tool.

The same will be true for agencies that don't create interactive messages. The handwriting is on the wall: Even traditional media such as newspapers, magazines and TV are becoming interactive through the wonders of digital technologies.

In the rush to keep up with the times and competitors, lots of ad agencies have suddenly become "interactive media experts."

Unfortunately, the creative, distribution channels and monitoring of traditional media are different from interactive media, which are being defined as we speak. An agency must first learn the boundaries of the new playing field and the rules of the game before it can compete effectively.

While creativity remains a key ad agency service, strategic thinking has become equally important as markets continue to segment and more personal communications are needed. Markets today range anywhere from several hundred million people, as in the case of the Super Bowl, to several hundred, as in the case of very targeted business-to-business sales pitches. Everything in between is where most ad agencies work.

Interactive media provide many ways to reach markets of all kinds and sizes. Knowing the target markets and how their members like to receive marketing messages, and determining the penetration of each interactive technology in each market are the first steps in developing a strategy.

If we look at the penetration of several interactive media, it becomes clear that just because a medium is capable of delivering an interactive message, it may not make sense to use it.

For example, while some 31% of U.S. homes are equipped with PCs, only 9% are multimedia-ready and only 7% subscribe to an online service.

Ad agencies must take the initiative and determine if these represent a critical mass for a product or service in a particular market. They must also evaluate the economics to determine if the return on investment makes sense.

If either of these numbers don't add up right now, count to 10 and look again, because things are changing fast. By the end of the year PC penetration will reach 40%, while the multimedia and online customer bases are expected to double.

While these numbers don't compare to the 94% penetration of telephones, the 80% penetration of VCRs and the 63% penetration of cable TV, they still make sense for some advertisers, such as automobile manufacturers.

Until now, they've provided just basic product specifications and catalogs online, but that's changing. Dealer locators, financial and lease information, as well as parts, service and accessory information are being added to the mix, providing online consumers with even more information.

What about CD-ROMs? While only 8.7 million U.S. homes are currently equipped to run them, they provide an attractive way to personally showcase new cars and trucks to individuals in a select consumer group.

For example, research indicated that a large portion of multimedia households matched the prospective customer profile of the Chrysler Neon. So Chrysler created a Neon CD-ROM brochure. It provides lots of information in an entertaining way, when and how each consumer wants it.

Another strategic consideration is the technical standards issue. Since we don't have uniform standards for all interactive technologies, we must take this into account when creating and distributing communications. Otherwise, the intended message could fall on deaf ears.

And, rather than promoting the product or service, the ill-fated communication turns the prospect off.

Yes, consumers are less forgiving than ever.

Interactive technologies like video kiosks and fax on demand provide more ways to reach large audiences in a personal way.

Their popularity will increase along with that of many other interactive communications vehicles in the years to come because advertisers must extend the retail environment.

Making the purchasing process as easy as possible is becoming a key strategic goal, and interactive technologies will help achieve it.

So before climbing the interactive media mountain, make sure you have a strategy because it could be a long way down.

Mr. Donlin is director of media and interactive technology at Ross Roy Communications, Bloomfield Hills, Mich.

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