Category Archives: Predictions

Stretching Out: Technology and Advertising in 2010

(Originally published in December 2005) by Eric Picard

Every so often I write a column that looks forward a few years to predict the future. I’m taking another stab at it this year.

Rear Window

First, let’s look back on my 2000 five-year predictions and see how I did:

  • Unlimited long distance will be free in the next five years.

    Phone companies are continually expanding their programs for single-rate long distance coverage, but VOIP (define) really captured this prediction and ran with it. With telco-modeled firms such as Vonage; and free communications tools, such as Skype, MSN Messenger, AIM, and Yahoo Messenger; free voice communications are enjoyed by millions of people every day.

  • Cable operators will integrate PVRs (define) into digital cable boxes. Pausing TV (and skipping commercials) will be the norm.

    Not only are DVRs (define) integrated into cable boxes, the whole notion of on-demand TV viewing really took off this year. We now have a plethora of choices when it comes to TV content and how we’ll consume it, and an immense amount of control.

  • Rich media advertising will become the norm online, if only because iTV audiences aren’t going to respond to animated GIFs. Even without iTV, it will happen in the next five years.

    It did happen without iTV, which is only just now starting to explode. Rich media (depending on your definition) is certainly the norm now. Most ads are Flash-based, which is a minimum bar for using the term “rich media.” But for any kind of compelling brand advertising, rich media is the standard.

  • Some technology advance is going to radically change the way the Web works and affects our daily lives, and it will be completely unexpected. This could happen any time, but certainly within five years.

    I realize this one was vague, and it’s certainly a truism (one I’ll include in every list of predictions going forward!). Following, just four unexpected technologies that radically changed the way the Web works to the extent that they affect our daily lives:

    • IM. It was around back then but has really taken off in the past five years.
    • Peer-to-peer file sharing. From Napster to BitTorrent, the world will never be the same again.
    • Mapping. We all thought MapQuest was so cool, but Virtual Earth and Google Earth changed the game completely.
    • Search. Google was barely known in 2000.

Front Window

Here are four new predictions for the next five years:

  • Free Wi-Fi networks will eclipse digital cellular networks in coverage, sparking a revolution in free calling over IP-based networks. Portable digital information consumption devices will also explode.
  • Most TV content will be consumed over the Internet by download, and on demand over very high speed broadband networks. The TV networks will do just fine, and most content will be consumed for free with advertising, just as it is today.
  • Advertising will be much more relevant and effective due to appropriately implemented targeting and filtering technologies that will anonymously identify people across all media. Ultimately (maybe more than five years out), this type of targeting will extend across all forms of advertising, even what today is considered offline.
  • Some technology advance will radically change the way the world works, and it will be completely unexpected. This could happen any time, but certainly within five years.

I’ll even go so far as to guess at some of the technologies that may drive these changes. A huge area of expansion is printable technology.

OLED (define) technology is one of my favorite new areas for speculation. Essentially, the current crop of OLED technology makes flat-panel displays much cheaper because the display is literally printed onto a sheet of glass or plastic by industrial inkjet printers. A big plus is the display is flexible, so a foldable or rollable display is finally possible. But that’s just the beginning.

Last month, Siemens announced a new type of video display that can be printed on paper or cardboard. It’s so inexpensive, it will be used in books, magazines, packaging, tickets, and so on. Interestingly, it will utilize already available printable batteries. This makes the whole process very easy to produce — and very cheap.

Get ready for video everywhere, literally. Video ads will show up on cereal boxes, food wrappers, and all sorts of packaging. Also expect clothing, wallpaper, bedding, even paint to have video capabilities. This will lead to a revolution in information display, mapping, directions, and (of course) entertainment.

Let’s not forget RFID (define) tags and other tracking technologies, such as two-dimensional bar codes. These tools will change forever the way we interact with the world. In the next five years, the rules of engagement around these technologies will start to become established.

Media’s Believe-It-or-Not Future

(Originally published in ClickZ, October 2004) by Eric Picard

TV and radio serve up content in a linear broadcast format. It’s dished out in time slices according to schedules that make sense to broadcasters and the marketers who buy their ad space.

The change coming to media is so radical, many colleagues I speak with within the industry would rather not engage in the discussion at all: All media are going digital. Media will be nonlinear in the next few decades. Look at what’s happening with DVRs (define), such as TiVo. The latest estimates are that DVRs will control 80 percent of the market within five years, as cable and satellite companies begin distributing them. All a DVR does is strip linear content out of a broadcast and make it nonlinear. Why continue viewing linear broadcasts when you can simply download content as you want it?

Giving consumers control is a key driver in new technology adoption. DVRs are popular (and will be adopted) because they offer consumers much more control of their television viewing experience. Consumers can time-shift TV to watch a show when it’s convenient for them. They can skip ads just as they do in magazines, stopping to watch only those that interest them.

Look what Maven is up to with branded broadband video, if you don’t believe me. Pretty cool stuff. It’s on the cutting edge of this new market, and watching the beginnings of revolutions is always good.

Radio is where “delinearization” will happen next. Satellite radio providers XM and SIRIUS are making decent headway into changing traditional radio. Yet their model is more of the same, with an emphasis on “more.” Yes, more choice and better (wider) selections of various genres. But it’s still linear.

Those of us who’ve used Web-based radio solutions know the writing’s on the wall for current models. (I’m listening to Real’s Rhapsody service on a nearly-free trial as I write, and I’ve kicked the others’ tires as well.) Once you can queue up your own selection of music and listen to it all day long, there’s no reason to buy an album. New developments such as iPodder from former MTV VJ and Think New Ideas cofounder Adam Curry let consumers dive into the blogosphere and download music playlists directly to an iPod or other digital music devices.

Microsoft’s recent release of local radio that mimics major markets’ radio playlists is an astute move on its part, and only a tiny piece of its overall plans for the media’s future. Redmond is stretching toward the future in ways that remind me of the shifts it took after Bill Gate’s all-night Web surfing sessions drove it toward incorporating the Web into the OS.

The Windows Mobile site gives a bit of a view into where it sees things heading: Windows MediaPlayer 10 MobileWindows XP Media Center, and the new Portable Media Center interact seamlessly, allowing the consumer to manipulate digital content in unprecedented ways.

Sure, today these solutions are aimed at technology hogs like me. But Microsoft’s media device strategy is broad, well-planned, and in early execution phase. The revolution is hardly over yet. What happens when wireless blankets the world?

Wireless will change media once Wi-Fi (define) coverage is as large as cellular network coverage.WiMAX is the first step in this direction. Intel can’t talk enough about it.

WiMAX is essentially wide-area broadband Wi-Fi. Intel’s plans include building wireless into cheap-enough chips on such a scale that almost everything will connect wirelessly to the Internet in a few years.

What happens when radio and TV signals are sent via wireless IP instead of the current analog and digital broadcast signals? Once that happens, control over how, when, and where media are used and consumed falls squarely into the hands of — the consumer.

I rest my case.

Has Interactive Failed? Not the Way You Think

(Originally published in ClickZ, September 2002) by Eric Picard

Interactive industry pundits are complaining a lot lately about the negative treatment we’re getting from The Wall Street Journal and other traditional media.

Can we blame the media? An appalling lack of understanding about industry issues exists even among the online advertising “experts.” If our experts can’t get a handle on the issues, how can anyone outside be expected to do so? We stink at explaining ourselves to the outside world. We stink at communicating internally.

We argue about a host of issues, all from Balkanized perspectives with little respect for other ways of doing things. Add to this cacophony agendas and approaches within various marketing departments, and confusion starts piling up.

Walk in the Other Person’s Shoes

We need empathy — the ability to see things from another’s perspective. How do you respond to the following statements?

  • Online media should be bought using traditional offline metrics, such as reach and frequency.
  • CPM media buys are absurd. Everyone should buy CPC or cost per acquisition (CPA).

The statements are one dimensional. Each points to valid issues but not to answers.

I see five major constituencies in our industry, although there are probably others. How the two statement above are heard and perceived depends on which group the listener is in:

  • Traditional brand advertisers have advertised offline for years, buying media by gross rating points (GRP), reach and frequency, and other traditional brand media metrics. They understand clearly the science behind branding and prove their value to advertisers by showing them how many people they hit within the target market (sometimes through brand recognition studies).
  • Traditional direct marketers scientifically approach consumers via direct mail and other direct methods. They focus only on successful acquisition and care little about brand effect. They have the research proving what results will be before they lift a finger. This group uses very specific methods and language to describe their work.
  • “Traditional” online advertisers/marketers think of themselves as a hybrid of the first two. They love talking about the branding “side effect” (offensive to brand advertisers) and embrace direct measurement. Their dialect doesn’t quite make sense to brand or direct people outside the online space. Most are decidedly weak in their knowledge of traditional offline marketing concepts. They typically misunderstand the direct marketer’s proven science and have virtually no understanding of branding and associated relevant measures, such as reach and frequency.
  • Online brand advertisers have decided the only way to save online advertising is to build measurement tools that will match those used by their offline counterparts. They have stared to eschew direct-response type information in favor of building consensus for the traditional brand path as applied to online.
  • Online direct advertisers only buy CPA or CPC when they have any say in the matter. They buy CPM when they must, but they make darn sure their actual CPA is very low. Some understand traditional direct offline science pretty well, others think they invented the concept of measuring return on investment (ROI). Those who know the science of offline direct are successful by using the same indices to build models online.

What does this all mean? Just because you’re an online direct advertiser, doesn’t mean you should issue orders that the entire industry move to a response metric to value online advertising. And just because you’re an online brand advertiser, doesn’t mean you should suggest we ignore responses and only focus on methodologies such as GRP. There may be two paths to take — as there are offline.

Rather than snipe at each other because each group has its own agenda, we must unify the messaging from our industry. A divergent but strong positioning of each segment (without diminishing the others) would be an improvement. For example:

  • Online advertising is proving to drive direct response better than any other medium.
  • Online advertising offers the best ROI on branding efforts of any medium.

Issues to be aware of: Online direct has been boosted by lower online media costs. If the online brand crowd is successful, online media will be revitalized — and costs will rise. This will hurt online direct, because they rely on cheap CPC/CPA buys. Unlike offline, online direct and brand share a much higher percentage of the same media space.

Diversionary Tactics

As troubling as the lack of perspective between groups is the lack of clarity in technology companies’ marketing messages. Many use industry issues (real or imagined) as weapons in their own marketing arsenals in ways that further confuse an already confused marketplace.

My comments are not aimed at the companies used as examples (which is why I’m using fake names — although some of you know who’s who), rather at their messaging. I’m not saying marketers at these companies should ignore the value they offer customers. Rather, they shouldn’t inflate minor issues or make untenable claims spun as solutions to major industry problem.

TrueMethods’s marketing inflates minor issues. Its Site Side Ad Serving Solution is promoted as the only privacy-friendly server in the industry, making the case all its competitors share ad-serving data across customers. Virtually nobody in this industry does this. Even those who do cleanse and segregate data to protect customer information. They’d be out of business if they didn’t. This is a minor issue for a few publishers and marketers. It’s not a broad industry problem.

OneStream is a rich media technology company. Its message claims it is building standards for rich media advertising. OneStream doesn’t promote industry standards, just its own solutions. As a business, it should sell its products. What does it have to do with standards? Nothing.

A standard, by definition, applies to numerous offerings from different companies. Anyone can build to agreed-upon standards. OneStream suggests that the solution to a lack of industry standards is for the entire industry to unilaterally use its products. How inconvenient for competitors. If its mission is truly to help set industry standards, it should open its formats and offer standards that competing technology can be built to.

ZeroMedia offers an ad-serving and proprietary client-side creative format for ads. It claims to have solved all problems inherent to “first generation” locally installed ad-serving solutions (such as RealMedia and NetGravity) and “second generation” hosted ad-serving solutions (such as DoubleClick) that use their own server farms. ZeroMedia claims to have solved these problems by using CDNs to serve ads and a proprietary “patent-pending client-side intelligence.”

Many ad-serving solutions use CDNs (including Bluestreak, RealMedia, and others). Their “patent-pending client-side intelligence” requires individual users to choose ad preferences so ads can be targeted to them based on their defined criteria. Since the ad-serving solution seems to rely on this, it drags more issues into question.

Unless this industry starts communicating well, we’re not going to get past the misunderstandings in traditional media. If The Wall Street Journal doesn’t stop bashing online advertising, we’re in trouble. But we can’t complain about misrepresentation in the media if we can’t get our own story straight.

The stories above are on my mind, but I’m sure there are others. What are your suggestions for issues needing some housecleaning? We’ll try to air them here.

The Future Is Coming! The Future is Coming!

(Originally published in ClickZ, August 2002) by Eric Picard

Two years ago, I made some predictions (some privately, some publicly) about what the world would be like in five years. These can be placed into four categories:

  • Unlimited long distance will be free in the next five years.
  • Cable operators are going to integrate personal video recorders (PVRs) into digital cable boxes, and pausing television (and skipping commercials) will be the norm.
  • Rich media advertising will become the norm for the online space, if only because iTV audiences are not going to respond to animated GIFs. But even without iTV, it will happen in the next five years.
  • Some technology advance is going to radically change the way the Web works and affects our daily lives, and it will be completely unexpected. This could happen any time, but certainly within five years.

It’s amazing how much has shifted in the world since I made these predictions, and I certainly could use the sweeping changes in the economy and in the world to take them back. But, if anything, the circumstances have only solidified the likelihood of these predictions coming true — if only because companies are making innovations spurred by that highest of motivators: fear.

Unlimited Long Distance

My reasoning behind this prediction comes from basic math. The growth of data transfer has outpaced voice by a very high margin. At a certain point, it makes sense to “throw in” long distance voice to attract customers for data services. But things have shifted since I formulated that opinion, and reality is outpacing my prediction.

MCI has jumped the gun by instituting its new service, “The Neighborhood.” It’s the strongest bundle of services I’ve seen yet in the nonwireless space. It includes unlimited calls (long distance and local) within the U.S. and all the bells and whistles (call waiting, caller ID, speed dial, three-way calling, and voice mail). The price is only $49-59 monthly (depending on where you live). Think about that for a minute. Because this includes local phone service, you deal directly with MCI instead of your Baby Bell-remnant local provider.

The only question most consumers will have is whether MCI will be around long enough to support this offer. But the genie is out of the bottle. It’s only a matter of time before this becomes a standard offering across all providers.

PVR Support With Your Cable Box

 

In my mind the biggest problem with PVRs — whether you’re talking about TiVo, SONICblue, UltimateTV, or another company — is they’re add-ons. Individual consumers must make the decision to go out and buy a PVR, set it up, and get it running. Though every existing PVR owner is out there evangelizing the hell out of this technology, the reality is they’re still early-adopter buyers. PVRs are great solutions, but my parents are not going to understand the value proposition.

However, if a PVR is a standard offering within your digital cable, then the ballgame changes. Seamless integration with your cable remote really will change things. Come on
— if you can simply pause live TV without adding anything to the system, that’s a big deal.

Earlier this month, The Carmel Group issued a new report that cited these amazing estimates:

  • PVRs will penetrate an estimated 1.5 percent of U.S. TV households by 2002, increasing to 25 percent in 2008.
  • Six PVR players will account for about 73 percent of the total market by 2008. The manufacturers are Digeo (Moxi), Metabyte Networks, Microsoft (UltimateTV), OpenTV, SONICblue, and TiVo.
  • Two pure-play PVR providers will emerge as leaders in the digital video recorder (DVR) race: TiVo for its branded PVR solution and Metabyte Networks for its unbranded PVR solution.
  • Cable operators will be more inclined to work with unbranded PVR solutions, such as Metabyte Networks and OpenTV, because they provide greater flexibility and control.
  • By year-end 2005, U.S. cable operators will have an estimated 4.8 million PVR-based users, up from 300,000 users in 2002.
  • By year-end 2005, U.S. direct broadcast satellite (DBS) operators will have an estimated 4.9 million PVR-based users, up from 1.0 million users in 2002.

In addition to these amazing estimates, Metabyte and Digeo (the two leaders in PVRs marketed toward cable operators) have announced major integrations with some of the leading cable infrastructure technology providers. Digeo is offering its Moxi solutions through Motorola and Scientific-Atlanta. Metabyte has also integrated with Scientific Atlanta. This is a major step, especially given the Moxi integration with Motorola supports existing infrastructure out of the box.

I’ve talked about the Moxi solution before, and I can’t stress enough how cool this solution is — and the cool factor goes a long way with home electronics.

Rich Media Will Become the Norm

I won’t spend too much space on this one — I think most of the leaders in the online advertising space would agree this is a basic truth. But it is likely happening faster than most realize, and I believe the time of rich media is finally at hand. Next month, I’m going to write a comprehensive review of the rich media space and detail what everyone should be watching for.

In my role at Bluestreak, I have access to the aggregate stats from our ad-serving efforts. We’re a great benchmark of what’s going on in the industry (although our rich media background does give us a bit of an edge in this category).

When comparing January stats with June stats, you can clearly see a big shift in the proportion of rich media being served.

Bluestreak Ion Server Stats
by Media Type
Ad Type Ads Served (%)
January 2002
Images 96 percent
Rich media 4 percent
June 2002
Images 80 percent
Rich media 20 percent

This came amidst a 32 percent increase in the number of total impressions served between those two months. About 80 percent of the rich media served in June was Flash, and the rest was spread pretty evenly between third-party rich media technologies (including our own) and HTML ads.

The Changing Face of the Web

Although I’m uncertain exactly what shape this radical technology advance will take, I’m pretty sure something’s coming along that will change the face of the Web. There are a lot of indicators of this, from the amazing work being done in digital identity to the innovations of Flash MX. It’s likely this change will seem subtle when it first emerges, but its implications will be broad.

To give you an idea of the kind of clear change I can see from a tool such as Flash MX, just look at this innovative Web site: Chipotle.com. This is a definite indicator of what I believe Web sites are going to be like in the next few years. They will be much more interactive, dynamic, and interesting. And this site only uses Flash the way its been used for years (albeit much better than it typically is used). See my coverage of Flash from a recent column, if you want a fuller picture of the specific implications of Flash MX.

Digital identity is a broad topic and difficult to sum up in a few sentences. It promises to revolutionize the way Web sites are built, used, and controlled. But it will be a quiet revolution, not a loud one. See more about the digital ID revolution at Digital ID World.

Rich Media Trends, 2002

(Originally published in ClickZ, March 2002) by Eric Picard

In August 2001, I predicted a significant shift in the trend of rich media in the online advertising space. My theory was that we were going to see a change in the way things in the industry had “traditionally” been done — which was that ad agencies were driving the rich media technology development. My thought was that publishers were about to step into the lead. I was right, and this trend is continuing.

So, as the development of rich media progresses, let’s talk about various shifts I see going on right now and what these trends mean to all the parties involved — advertisers, agencies, and publishers.

Trend 1: Publishers are productizing rich media ad solutions.

As I stated in the aforementioned article, publishers are responding to a number of market pressures.

First, publishers have significantly “streamlined” their operations by cutting staff. This means that they have fewer people (with less experience) to implement complex campaigns and must simplify the way they integrate rich media campaigns. As a result, only the simplest implementations of rich media will be accepted as part of normal media buys.

This has had a chilling effect on third-party rich media providers, since many solutions require the publisher to jump through a series of hoops to run the creative types. The broad winner here is Flash, which has become the de facto standard for rich media advertising online. (See Trend 3, below.) The losers will be any rich media technologies that are complicated to implement and are targeted toward cross-publisher media buys.

Second, publishers have greater need than ever to differentiate themselves to advertisers by offering exciting and effective ad solutions. This means that they don’t want to focus on being part of a cross-publisher media buy. Publishers want to get media dollars that are uniquely allocated to them. This is driving publishers’ launching of customized “products” that their sales forces can offer to advertisers.

Great examples of this:

 

 

    • Eyeblaster, Ad4ever, and United Virtualities all license their products to publishers, whose sales forces can then use them as a point of differentiation.

 

 

    • Bluestreak has licensed its video products to AOL (a Bluestreak investor), which sells them to advertisers on its Moviefone property.

 

Trend 2: Agencies want to use standard design tools to build rich media ads.

Creative teams within agencies are billed out at an hourly rate. Agencies don’t want to spend extra time (read: money) getting their creative teams up to speed on the specialized tools needed to build an unusual rich media ad.

To add to this problem, designers demand an incredible amount of flexibility when building solutions. They hate working within constraints, and online advertising is all about constraints. If designers are going to build specialty rich media creative, they want to use tools they’re familiar with — Photoshop, Flash, Fireworks, and so on.

If a designer must use a custom specialty tool to build a special rich media type, the tools has to be either wizard-based and extremely simple or robust and very powerful. The problem is that the simple tools often don’t give designers enough flexibility and the powerful tools take too long to learn.

This has led to some major shifts in the industry. A few years ago, everything in rich media ad technology was Java-based. Today, everything is Flash-based. The long-standing rich media firms have all released Flash solutions, from Enliven to Bluestreak to Unicast. And most of the new rich media technology that has hit the street in the past year is some combination of Flash and DHTML.

Trend 3: Advertisers are not pushing agencies and publishers on which rich media technologies to use.

There was a time when advertisers tended to be extremely involved in pushing agencies to use specific third-party rich media solutions, and they leaned on the publishers to get that technology approved. Those days are nearly over. The market has matured to the point where the technologies available can meet advertiser demand without requiring a lot of extra work.

Solutions from all the veterans are very robust and meet most customer needs — Enliven and Unicast have been providing Flash-based solutions for years. Bluestreak just launched a new Flash solution this week that captures tracking information from Flash creatives and reports on it. Between Eyeblaster, United Virtualities, and Ad4ever, there are plenty of off-the-shelf solutions available for layers-based advertising. Point·Roll’s technology has been implemented often enough that it has achieved good penetration in the rollover space.

Advertisers don’t care so much what’s under the hood — they care about results, and the agencies and publishers have solutions that can easily be employed without twisting any arms or performing “unnatural acts.” This makes the position of new players in the medium rather tenuous, since they have a lot of ground to cover in a tough climate. It isn’t impossible, just difficult, because there are many mature solutions on the market.

This leads back to Trend 2. The newer technology vendors are discovering the lay of the land very early and are mainly focusing on offering solutions to publishers.

These trends may or may not be long-lived. It will be interesting to watch what happens over the next six months as the market (if the analysts are correct) continues to stabilize and advertiser growth on the Internet increases more quickly.

We have the technology

(Originally published in ClickZ, February 2002) by Eric Picard

As a kid, I wondered what the world would look like by 2000. We’re well past the benchmark millennium, even past 2001. We “should” have flying cars, regular flights to the moon, and holographic virtual reality. Well, not quite yet. But we do have some interesting new technologies that are not in development — they’re already reality. I have yet to see anyone take real advantage of them for marketing purposes.

DVD

DVD player and media sales have surpassed VHS. Most people I know have either bought a DVD player in the past few months or will buy one soon. I don’t just mean my single male friends — I mean most of the people I know.

Anyone who bought or rented the DVD version of “Shrek” knows that DVDs come with a massive amount of additional material on them. Some extras come in the form of interactive entertainment available only when you place the disk in your PC’s DVD-ROM drive, though some are accessible from the DVD player.

This opens up possibilities for advertising that (to my knowledge) haven’t been explored. For instance, as an advertiser, you could buy an unprecedented amount of space on a video or interactive environment to expand your brand.

I predict that we will see major advertisers buy space on DVDs for a variety of uses this year. Smart advertisers will build unique, custom content for this medium, creating standalone interactive games or exciting short films to showcase their products. BMW broke ground with Web-based short films. Imagine a similar concept with high-resolution, DVD-quality video. Or, a custom game that lets the customer play a movie tie-in game.

Video Games

Some advertisers create Web-based games. LifeSavers built a site to entice kids to play LifeSaver-themed games in a virtual environment. RadioShack built a series of high-end video games available for free through the MSN Gaming Zone. They drive interest in a line of radio-controlled toys.

Games will play out in our industry (pun intended). Product placements in video games are often free to advertisers — as game developers tend to request brands to include, not the other way around. Developers need established brands to increase a game’s realism. There’s no reason an enterprising brand manager seeking the right demographics couldn’t push her own brand to appropriate game developers.

Wireless

Ho-hum? I’ve reacted that way to wireless myself recently. Now, the space is about to change. Why?

My wife is one of three sisters. All three got new digital wireless phones over the past few months. At a recent family dinner, I posed some questions. First I asked, “Are there any circumstances in which you would be OK with getting ads on your wireless phone?” The initial reactions were violently negative: “No way!” Then I posed questions that got very different reactions.

“How about if you only got ads from companies you use — like Wal-Mart or eBay?” Knowing all three sisters are Wal-Mart and eBay freaks, I was confident of the answer I would get, “Oh, well, that’s different! I wouldn’t mind, as long as the ads were for things I’m interested in.”

I pushed. “Would you be willing to receive ads on your phone if you got paid with phone minutes for each one you listened to?” Another positive response. I finished with my secret weapon — the question I laughed at originally, the thing I pointed to as a “just plain stupid” idea for wireless not too long ago.

“Would you be OK if Starbucks sent you a coupon for a discounted cup of coffee when you were within one block of a Starbucks?” The answer? A resounding “Yes!”

PVR

TiVo, ReplayTV, Ultimate TV, and others broke ground. It’s time to grow these products into a maturity. I once believed this could only happen when cable companies integrated personal video recorders (PVRs) with digital cable.

A new player in the space, Moxi, is garnering much attention. Moxi plays directly to the cable companies as an infrastructure developer. The Moxi Media Center is basically a combined PVR, digital cable/satellite receiver, cable modem, and MP3 jukebox. One of the coolest things about this system is that you can hook it (wirelessly!) to as many as four TVs in your home.

The reason I mention PVRs (besides wanting to discuss Moxi) in this column is that they are currently viewed as a detriment to TV advertising. Users can fast-forward past the commercials. Let’s look at this from another angle.

What if you could provide a compelling piece of original creative content users want to watch — and what if you could sponsor that content exclusively through the PVR or cable company itself? You could contract with Moxi to download your content to a user’s PVR hard drive, then you could place a sponsorship icon in the menu of the channel guide. The user could click on your icon to play back the original content.

Perhaps this is an opportunity for traditional brands to push products in an infomercial-like way. The Web taught us that users want access to deeper information about products and services than a 30-second spot can provide. If you could offer the opportunity for a user to learn the benefits of your product/service in an extended format — outside of the 30-second spot — it would be valuable.

People may be more inclined to watch an infomercial-type ad on their PVRs. They don’t need to worry about what they’re “missing” on TV.

As with the Internet, you must build for the medium. Repurpose from other media, and you’ll get diluted results. Stretch your creative and media teams’ abilities by pushing innovative ways to use these new technologies. Find the value.

Wireless location based services will change everything!

(Originally published in ClickZ, July 2001) by Eric Picard

I have to admit that lately I’ve been feeling a little frustrated about the state of wireless when it comes to advertising. The “best” idea I’ve heard on using the space for marketing was to fire Starbucks coupons at customers as they walk by store locations. And that’s just plain stupid. Certainly, using text and graphics to advertise on wireless Web pages will grow and continue, but that’s neither new nor very interesting.

That all changed for me last week. I came across some information about a company called iProx, a small start-up in London focusing on supplying location-based services (LBS) infrastructure technology to wireless providers. It might not sound exciting, but LBS would be the enabling technology to let Starbucks bounce a coupon to a potential customer walking by the store. It is also opens up amazing new opportunities.

Now, I like this company, and I spoke with cofounder and COO Ravi Kanodia during my research for this article; but regardless of whether it is iProx or another company that breaks open this space, this is one of the most exciting technologies I’ve heard about in years.

The Federal Communications Commission (FCC) has mandated that by October of this year, U.S. wireless providers must be able to pinpoint the location of 911 callers from mobile phones within 100 meters. But there’s nothing in the FCC requirements that limits using this technology for 911 calls — and there is a mad dash to provide this capability to the wireless providers.

iProx is the most exciting of those companies that I’ve seen. If it has developed what it claims, we could see a wireless revolution, with thousands of new services and business models coming from it. Not to be clichi, but this could really change everything.

To illustrate why iProx’s solutions are amazing, let me explain how LBS works today. Currently, to be located by an LBS, I need to initiate a call. When I make the call, the wireless provider triangulates my location by cross-checking my location between transmitters. Then my location can be aligned with potential offers that intersect my needs at the moment, and an offer based on location and time can be made.

Logically, we need to be able to continually track the location of users and push information to them based on preselected needs or preferences. Kanodia likens this problem to the need for air traffic control in the aviation industry, because in a wireless network environment there are problems with simply pinging every user’s wireless device at short regular intervals. The wireless networks would simply melt down from the volume of pinging traffic.

iProx has solved this problem through its Correlation Engine, which tests users’ locations based on various criteria, including velocity and the user’s profile. For example, if you are sitting at your desk, not moving, iProx will ping you at very long intervals. But as you start traveling, it pings you more often — and speeds up the interval based on how fast you’re going.

This simple solution makes many amazing things possible, and they go far beyond pushing relevant time- and location-based offers at users.

Here are a few scenarios from an application standpoint.

  • Imagine that you’re on the road traveling and have a 6:00 flight to catch. Because you’re still 50 miles from the airport at 5:45, the airline can automatically cancel your reservation and reschedule you for the next flight (if you signed up for this service).
  • A shipping company could be instantly notified if a valuable truckload of computer chips were to suddenly start moving in the wrong direction. And obviously this is the next generation of LoJack for cars with hard-wired wireless devices.
  • For the first time, it would be possible to value outdoor advertising with unquestionable evidence. Even with the user-identifiable information removed, it would be extremely valuable if Macy’s could learn that of the measurable 10 million people who drove by its billboards last week, 300,000 of them visited Macy’s stores. This could work for any retailer, even the movie industry.

And this opens new vistas of analytics and demographics. For the first time, truly detailed and “clean” demographics can be assigned to populations. The privacy implications aside, this is a huge opportunity for a company to build datasets on human activity at a level that hasn’t been possible before.

iProx has also built a mobile location-aware “buddy list” application on top of its Correlation Engine; the application has integrated mapping and navigation capabilities (from Navigation Technologies). The idea is that you can be notified when one of your buddies has come within a certain distance of you — and instantly shown a map detailing your locations. You would be able to search for your buddies (if they’ve agreed to allow this) as well. Simply run a check as you leave work to see where the gang has gathered, and go meet them.

From an interactive marketing perspective, this feature could be used by marketers to build pools of buddies who could be introduced to each other based on affinity. Additionally, we could fire an opt-in application to any unregistered user as he or she walked into or out of a store location. There are virtually unlimited applications for this technology once it is implemented.

iProx has taken the right approach: Its solutions are vendor agnostic. It can make use of whatever technology is installed by the wireless provider — so, however closely the provider can pinpoint location, iProx will make use of it. And that’s one reason I think it’s onto something.

Start thinking about how you’ll make use of these advertising solutions as they arrive — because arrive they will. It’s only a matter of time.

Oh say can you see Convergence?

(Originally published in ClickZ, May 2001) by Eric Picard

There’s one thing to say about getting sick… you get to watch a lot of television. I just spent a week on my couch, and while being sick is pretty lame — I was fortunate I’d had digital cable installed the week before. Or so it might seem.

I was underwhelmed by digital cable’s programming and video quality, touted as being “digital quality.” I may have been getting four Discovery channels, but I found that without buying premium service, the only other things of interest were Pay-Per-View and the Independent Film Channel. The video quality is compromised by high compression, and it isn’t as good as my old analog cable — at least when viewing the extra channels. But despite all that, all things considered digital cable has great features, and I won’t go back to the old way of doing things.

I’ve uncovered interesting issues at the convergence point of digital cable, interactive TV, game consoles, and broadband. That broadband Internet connections come through your cable company can open up some amazing opportunities you may not have considered before.

Last week’s illness has given me some time to reflect on the consumer experience. I’m a technology nut — as you might imagine. Before I buy a new computer, video camera, television, stereo, or other component, I research the heck out of it. Afterward, I wire all my stuff together and make them do neat things.

Of course, when someone like me intersects with a cable-TV company, some peculiar things can happen. In Rhode Island, where I live, we have Cox cable. About a month ago, I started coming to some of my conclusions when I was researching the various set-top boxes that Cox offers for digital cable. The first thing I did was call customer support and ask what manufacturer Cox used and which boxes were available to consumers installing digital cable.

Based on the rep’s response, I don’t think anyone had ever asked these questions before. But, as it turns out, she was able to get me the answers pretty quickly. The set-top boxes they use are manufactured by General Instruments, which was recently purchased by Motorola. The model Cox had most recently introduced was the DCT-2000 Interactive Digital Consumer Terminal.

Some of the highlights of this consumer box are pretty cool high-end home-theater-type features like S-Video connectors, wide-screen ratio compatibility, Dolby Digital (with an S/PDIF digital coax interface), and MPEG-2 Video. But there are some other interesting (if nascent) features as well. This device provides a two-way interface to the cable network and automatically downloads all the program listings on a regular basis. (Sound like TiVo?) It has parental lockout controls using the new television rating standards, and — although Cox isn’t supporting it yet — it can provide some access to Internet, email, and home shopping.

What is more interesting to me is that Motorola’s next version (which I uncovered during my search) —the DCT-5000 — looks even more interesting. This thing has all the features listed above but also includes a cable modem for use with either internal controls or pass-through for PC and IP telephony. It also offers USB, EE1394 firewire for HDTV interface, PCMICIA support, Smart Card support, a Parallel port (for printing), and the option of a hard drive using an integrated IDE connector. (Can you say personal video recorder [PVR]?)

The reason I go to this level of detail is because I’m paying my cable company $2 per month for my device. And think about it — how far away are we from the incorporation of TiVo, AOLTV, or UltimateTVinto these things? I’d happily pay a small fee every month for integrated PVR support!

That’s not too far off when you consider that AOL Time Warner owns most of the cable networks in the United States and that it has just signed on with Sony to offer Internet access, email, instant messenger, and Netscape to the PlayStation 2.

Now wait a second. Did anyone notice that Microsoft’s new Xbox gaming console, due out in September, includes an ethernet port for broadband access, and its UltimateTV includes WebTV? (These operating units were combined?) And doesn’t Microsoft have an interest in some cable networks as well?

That leaves us with the only nonaligned player in the space: TiVo. And I predict that TiVo is going to jump right into the fray through partnership or acquisition. It’s the only player that isn’t owned by a company affiliated with a cable network. And although many players invested in it, including AOL andNBC, TiVo has the flexibility to go to every other cable operator out there.

And TiVo may well be an interesting acquisition target for a company such as Excite@Home (if it weathers the current storm). Or Sony could take a closer look, considering that it’s one of the manufacturers using TiVo’s solution — which would leave Sony with a prime method of offering I-TV to its PlayStation 2.

This is going to be a very interesting time because many experts are saying that the home electronics system of the future is going to be built around these high-end video-game consoles. They’ll be the heart of the home network and the glue that holds your stereo, television, computer, and even your appliances together. Hey — it’s called “convergence,” baby! Get on the bandwagon!

I’ll sign off now — because this is starting to sound like a conspiracy-theory newsletter.