Web devices offer eager agencies a possible gold mine

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Serious competition for WebTV is on its way, and it's opening up a niche market for ad agencies seeking a cut of Internet business.

With so many players joining the field at once, Advertising Age estimates that ad spending for these new Web access products could surpass $80 million this year alone.

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Four new companies making a play in Web machines are in the early stages of searching for their first agencies:

  • ViewCall America, Norcross, Ga., is looking for an agency to promote its TV-based Internet service. Billings are to be determined.

  • Diba, Menlo Park, Calif., seeks an agency for a $2 million to $3 million trade campaign starting midyear to build awareness for its software standards for Net appliances.

  • Oracle Corp.'s Network Computer Inc., Redwood Shores, Calif., is deciding whether to use Oracle's shop, Fathom, Los Angeles, or go elsewhere for a branding campaign expected to start in the second quarter. Billings aren't yet set.

  • NetChannel, South San Francisco, Calif., is looking for an agency to handle what's expected to be a $12 million-plus campaign set to start in the second quarter.

    Additionally, Zenith Electronics, which in December announced its first national campaign in five years, may up its $10 million overall budget so it will have more money to promote a Net set-top box, which arrives mid-year. Bagby & Co., Chicago, is the agency.

    SLOW SALES FOR WEBTV

    One company already is in the stores: WebTV, which created the Internet service for WebTV devices introduced last fall by Philips Electronics and Sony Electronics.

    Some reports have indicated slow sales for WebTV. But VP-Marketing William C. "Chip" Herman said he's pleased with the launch--and he for months has argued Christmas '97 will be more important than last Christmas in establishing WebTV.

    WebTV agency Rubin Postaer & Associates, Santa Monica, Calif., spent about $12 million on the fall ad launch. Philips spent about $40 million on its own advertising for WebTV. And Sony is estimated to have spent about $10 million in a print-only campaign last year.

    All the players are staking positions in a market that is both wide open and uncertain.

    Network Computer is licensing standards for low-cost Web access devices and plans to make the NC brand ubiquitous.

    NC GAINING MOMENTUM

    NetChannel, run by former Yahoo! CEO Philip Monego Sr., is developing a family-oriented service for NC devices. The company signed deals with Intuit and CitySearch and is negotiating another with Golf Digest. NetChannel will be the exclusive service on RCA's planned NC set-top box, to be released by Thomson Electronics.

    Separately, ViewCall America is developing On-TV, a family-oriented service that launches Jan. 27 on Sega Saturn Net Link.

    Diba, which is focused on developing software standards for Web appliances, received a blow when Zenith this month switched to the NC standard for its future set-top box. Zenith is Diba's biggest equity investor, but new management at the struggling TV set maker moved to NC, a standard that is gaining momentum.

    "This is the winning technology for Internet television," said John Taylor, Zenith VP-public affairs and communications.

    Copyright January 1997, Crain Communications Inc.

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