First it was VCRs and remote controls. Then came split screens and DVDs. But the latest additions to the couch potato's tower of TV wizardry could pose either the most serious challenge or the greatest opportunity automotive advertisers have seen so far.
Two of the most powerful new technologies for TV - personal video recorders (PVRs) and interactive TV (ITV) - are expected to have a big impact on the way TV commercials are created and watched. PVRs allow viewers to program up to 30 hours of their favorite shows or movies, and quickly skip over commercials. ITV allows the viewer to interact with advertisers, and some systems also include Internet features. (See related story on this page.)
Forrester Research, a Cambridge, Mass., technology research firm, says 14 million consumers will have PVRs by 2004, and 24 million viewers will be watching ITV. Those figures get automakers excited because this new technology may provide the first real opportunity for marketers to communicate with TV viewers, thus giving them a way to determine how many viewers really are watching those costly TV spots.
'If I know what kind of product you like and where you are in your purchase cycle, I can direct messages to your household without waste,' says Jan Klug, marketing communications manager for Ford Division. 'The efficiencies are enormous.'
Testing the waters
Automakers have just begun to experiment with ITVs. The leading company for enhanced broadcast - which allows consumers to communicate with advertisers - is Wink Communications in Alameda Calif., with 110,000 household subscribers in six states. Ford began running spots for some of its trucks on Wink this past summer; DaimlerChrysler will begin running Chrysler and Dodge brand commercials on Wink by the end of the year.
In a Wink-enhanced spot for the Ford F-series truck, viewers who click a prompter are asked if they would like to be contacted by a dealer or receive more information on the product. Another spot for a Ford Excursion asks if viewers would like to receive a 2000 Ford Excursion catalog, and then gives the www.fordoutfitter.com Web address.
Betty Jeffrey, media operations manager for DaimlerChrysler, said the Chrysler and Dodge ads would ask similar questions, including inquiries about whether or not viewers like the color of the vehicle. If customers want more information, the cable company will forward their names to the automaker's fulfillment house.
Wink is covering the startup costs for encoding the TV spots for Ford and DaimlerChrysler, says Greg Clark, vice president of Wink. Clark says Wink's fee is based on the number of catalogs requested. The fee generally has not exceeded more than $1.60 per request for other advertisers.
Oldsmobile is testing ITV, too, but is using Microsoft Web TV, which also includes Internet capabilities. Its first interactive ad on Web TV ran Nov. 1, featuring the Alero. Viewers who clicked on the prompter and gave their e-mail addresses were offered Alero catalogs and test drives. About 900,000 households have subscribed to the Microsoft system.
'Right now ITV has low penetration numbers, but we want to be in a position to take advantage of this technology early,' explains Mike Sands, Oldsmobile director of advertising and marketing.
PVRs are playing catch-up to ITVs when it comes to advertising. Two companies, TiVo of Sunnyvale Calif., and Replay Networks of Mountain View, Calif., are marketing PVRs. Both units were introduced this past spring. While neither company has any auto advertising, both are talking to automakers about their capabilities to deliver tailor-made ad messages. For instance, General Motors already has signed up to be a TiVo advertiser once the PVR maker begins accepting advertising. The deal includes exploring how GM can target consumers through their viewing habits. For instance, the TiVo will know if someone likes family shows and may suggest that GM run a minivan commercial in that particular household.
'It's important to have that measurement piece,' says Tom Jump, director of advertising and sales promotion for Buick. 'You're in an environment where consumers tell you that they've been impacted by you, and that gives us the opportunity to provide them with richer communication.'
Automotive marketers are excited about ITVs or PVRs, and the potential they offer for customer feedback on the impact of their ad messages. They're poised to hear - and, it is hoped, accept - the truth from the public.
Jump says: 'It's either the most scary time or the most exciting time to be in automotive advertising.'