The effort includes a new business unit, CBS Marketing Interactive, that will use a variety of interactive media technologies to deliver CBS programming, promos and advertisers' messages.
The most significant element is an exclusive contract CBS has signed with Prodigy, awarding exclusive broadcast network rights to develop interactive marketing promotions with CBS advertisers on the online service.
CBS is already in conversations with several advertisers and agencies about developing interactive marketing promotions via Prodigy and will offer them as part of its upfront ad packages for the 1994-95 season.
The move is a big blow to NBC as it tries to line up the major online services to carry a new programming and marketing service dubbed NBC Online.
To date, NBC claims it has signed agreements with Prodigy, America Online and parent General Electric Co.'s GEnie.
Last week, NBC announced a May sweeps promotion with the T.G.I. Friday's restaurant chain to use America Online for a consumer sweepstakes that it says is the first-ever network/advertiser online promotion.
However, Prodigy executives insist NBC has no agreement to do such promotions on Prodigy and that the peacock network hasn't even formalized an agreement to be a content supplier.
"One of our missions is to be the television enhancer, the place where viewers can enhance their TV experience. And we want to work with all of TV suppliers to do that," said Scott Kurnit, exec VP-consumer products marketing and development at Prodigy.
However, Mr. Kurnit said Prodigy insists on those suppliers maintaining some element exclusive to Prodigy, which would pose a problem for NBC's plan to carry NBC Online via all online services.
"Obviously, NBC has a relationship with GEnie through GE. And Fox has a relationship with Delphi through" parent News Corp., Mr. Kurnit noted. "They will have to figure out how they want to work with those services."
Mr. Kurnit and CBS Exec VP-Marketing and Communications George Schweitzer both declined to comment on the terms of the contract. But Mr. Kurnit said that "it's long enough for CBS to be able to sink their teeth into it but short enough that it won't send the other networks off to other competitors."
Mr. Schweitzer said CBS is already working with at least one major ad agency's interactive marketing group, believed to be Leo Burnett USA, Chicago, and that CBS will begin conversations with all interested advertisers about using Prodigy as part of their 1994-95 season ad deals.
He said the packages won't be priced separately but will be offered as incentives to increase overall ad commitments to CBS, much the way CBS uses other off-network promotions such as college and mall tours.
Those tour programs are estimated by CBS to generate about $80 million annually in incremental ad spending on the network.
"There is no [cost per thousand] for this. I don't think the interactive world is ready for CPMs yet," Mr. Schweitzer said. "But there is a real value to this. It's substantial. There is a Prodigy rate card."
For example, according to Prodigy's rate card, an ad that takes up five computer screens costs $27,500, plus creative and production fees.
"A lot of advertisers have been coming to us and asking how they can test the interactive world without sinking a ton of money into it," Mr. Schweitzer said. "We want to begin exploring that with our advertisers."
Besides interactive ad messages, Mr. Schweitzer said, the CBS/Prodigy window can be used to conduct consumer surveys, games, electronic couponing and sampling.
Separately, the CBS Marketing Interactive unit will launch a variety of interactive communications to advertisers and consumers. Those efforts will include a CD-ROM disk of the new fall schedule, to be distributed to advertisers and agencies after CBS' upfront presentation next month and to consumers via Prodigy and several promotion marketing partners.
CBS will offer the CD-ROM free to consumers as a premium incentive supplied by promotion partners. CBS is believed to be talking to Blockbuster Entertainment Corp., now testing CD-ROM software distribution.
In May, CBS will also start communicating interactively with about 7,000 advertisers and agencies via a computerized version of CBS' MarketTalk newsletter.
CBS Marketing Interactive's efforts will work in concert with interactive programming and media ventures that will be developed under Mark Harrington, CBS' new senior VP-new media.
CBS is believed to be developing several interactive programming and marketing efforts as part of a new NFL counterprogramming block for Sunday afternoons, offering sports anthology, news and family-oriented movie programming.