Another Place to Slap an Ad?

It’s funny, our industry still struggles with a lack of standards in selling, tracking, and measuring online advertising. As with offline media, we struggle to keep our heads above water in the current economy. Internet penetration is said to have flattened out, and online spending is predicted to reach $9.5 billion in 2002 according to Jupiter.

If you are housed within a traditional agency as I am, you may have heard of some interesting innovations lately. For instance, do you know about entertainment gateways? They’re set-top boxes (of sorts), containing personal video recorders (PVRs) combined with broadband access. Haven’t heard about these until now? If it makes you feel any better, I hadn’t heard the term until recently.

As a consumer, I’m glad this new technology has come out. It will reduce that pile of crap on top of my TV set. As an advertising exec, I have to ask: Who will buy and sell the advertising? In my experience, anything clickable or linkable is thrown my way. This can be both good and overwhelming.

Forrester predicts that this technology will reach 14.7 million U.S. households within the next four years. When I heard this, I had to check out what’s hot on the market.

WebTV (now MSN TV) founder Steve Perlman’s start-up, Moxi Digital, announced a new product called the Moxi Media Center (MC) just this month. Giants AOL Time Warner and EchoStar and Paul Allen’s Vulcan Ventures have already invested $67 million in the arena. It’s said that EchoStar plans to deploy these units this year. MC will be available to satellite and cable operators for about $425 per unit. Forrester calls this the first “true” entertainment gateway that could displace traditional set-top boxes.

This product appears to have endless advertising opportunities. It contains a DVD and a CD player. Up to four shows can be recorded simultaneously. Music can be downloaded and managed. For an additional fee, the music is ripped (converted) and can be added to a receiver to connect to PCs on wireless networks. Users get interactive TV (iTV) and Internet access. Whoa!

This all-in-one, low-cost package could be a threat to the likes of TiVo and UltimateTV. We all know if this catches on, it will completely change the way television is viewed and perceived. It appears to be convergence at its best.

If this thing connects to TVs and computers, who the heck will own media planning and selling on it? Will each category have a sales rep? Will agencies need two brains instead of one? Speaking from the agency side, I guess it depends on the agency. I wouldn’t hang my hat on this type of advertising, but I’d certainly take a shot at it.

This appears to be a great way for advertisers to reach consumers in active media. Consumers control the way they view TV and the Internet. So advertising messages have a real opportunity to be top of mind. It also seems to have the potential to drive revenue, as well as branding, to an advertiser.

Consider this scenario: A 30-something, affluent female who is about to build a house sits down to watch an HGTV program she recorded while at work. As she watches, a 30-second spot for a lending company airs. As an overlay to the ad, there’s a typical “i” button that can be clicked to go online. A click of the remote control tells her mortgage rates have dropped. She downloads an application for a construction loan. The download is saved for later while the woman uses the remote to return to the program on TV. She picks up on the precise moment she left off.

The ownership of such advertising may be in the gray zone, but the opportunities seem limitless!