Marketers wary of Prodigy revamp

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Switch from banners to smaller icon ads proves questionable

As Prodigy shuffles toward the completion of its redesign, its ad strategy is getting murky and advertisers are growing restless.

The third-ranked online service early next year will finally rid itself of its trademark bottom-of-the-screen banner ads as part of a complete overhaul based on the World Wide Web's hypertext markup language, or HTML. In their place will be small icons that direct users to marketers' Web sites.

Marketers and agencies say the changeover, which began earlier this year, has caused a great deal of confusion.

Even more troubling to marketers, Prodigy has yet to develop a solid tracking mechanism for its new Web-based ads.

"Frankly, their reporting has fallen off considerably in their changeover to HTML," said Roland Sharette, VP-director of interactive resources at J. Walter Thompson USA, Detroit. A Prodigy backer since 1988, Ford is now likely to cut its spending with the service, Mr. Sharette said.

Fidelity Investments, an advertiser since 1992, is also rethinking its relationship with Prodigy.

"We are in the middle of negotiating a new relationship with Prodigy," said Douglas Sun, manager for electronic channel distribution.

While America Online and CompuServe have long passed the 3 million subscriber mark, Prodigy lags at just over 2 million. And the service is struggling to complete its redesign even as one of its parents, Sears, Roebuck & Co., is looking to sell its 50% stake.

Team Prodigy, a unit of rep firm TeleRep, is hawking 1996 ad packages that range from $10,000 to $45,000 per month to link to a marketer Web site. That compares with a base price of $27,500 for a five-screen ad on the old Prodigy.

At $45,000, Prodigy now ranks among the highest-priced pointers in the online world. ESPN's Web site costs $33,000 per month and gets an estimated 1.6 million visits in that period.

Prodigy will pull in some $20 million in ad revenue this year, about equal to last year, insiders said.

The online service acknowledges the ad tracking problem and says it will have new software in place during the first quarter.

"We are building it as quickly as we can," said Carol Wallace, a Prodigy spokeswoman.

But whether advertisers will continue to wait for solutions is a question. "We are torn about what to do there," Mr. Sharette said. "We certainly want to continue with Prodigy, but frankly, there are a number of problems."

Copyright December 1995 Crain Communications Inc.

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