New Technology Positions TV to Gain Competitive Advantage

By The Myers Report Archives
Cover image for  article: New Technology Positions TV to Gain Competitive Advantage

Originally Published: November 19, 2003

Visible World was one of several companies battling for attention during the exciting wave of interactive television business initiatives in 1999 and 2000. Direct competitors included ACTV, Expand, Invidi, Navic, and AdExact. While ACTV, Invidi and Navic continue to seek their niche and Expand and AdExact have disappeared, Visible World is gaining both funding and traction. "In the New York real estate crash in the early 1990s, the mantra was 'Survive 'til '95,'" says Visible World founder and CEO Seth Haberman. "In our business it has been 'Survive to 2005.'"

In 2000, Carat Chief David Verklin, commenting at a Myers Interactive TV Forum, suggested that television commercials in the future would need to cost advertisers $30,000 each instead of an average $300,000 to respond to the demands of instant consumer feedback resulting from interactivity. While the average commercial production cost has dramatically increased since Verklin's prediction, the ad community is slowly embracing the philosophy of creative and production flexibility. The growth of digital video recorders is accelerating awareness of customized targeting. WPP Group and Grey Media Ventures provided early funding for the four year old Visible World, which has developed technical solutions that enable advertisers and agencies to produce multiple versions of TV commercials -- up to hundreds or even thousands. Called IntelliSpot, the Visible World service is designed to deliver commercials to designated cable systems, broadcasters, zip codes, and in the future, households. Several advertisers have tested the service including clients in the wireless, medical, insurance, and media categories.

Three Advances in Evolution of Customized Commercials

Haberman points to three steps that had to be accomplished before television advertisers could adapt the IntelliSpot service. The first step was to build the technology, which Visible World has accomplished with video-on-demand technology provider SeaChange International. The second step was gaining deployment, which has been a far greater obstacle than Haberman anticipated. Today, however, the company boosts deployments of the technology to cable systems serving nearly ten million homes, with deployment to more than 20 million projected in the next six months. Earlier this week, Visible World announced an agreement with the New York Interconnect to deploy IntelliSpot and provide advertisers with the ability to customize commercial messages by network and geographic regions within the Interconnect coverage area. Interconnect marketer Adlink and

National Cable Communications offer the Visible World service in seven million cable households, and Comcast has deployed the service in Chicago and Detroit. The nation's largest cable operation,

Comcast, has invested a portion of the $8 million in funding recently committed to Visible World, insuring continued expansion in Comcast systems across the country. Haberman advised Jack MyersReportthat a deal will also soon be announced with a major broadcaster that will expand the Visible World service across the country.

The third challenge, said Haberman, "is for IntelliSpot to be regularly used in the workflow of advertisers. We have a methodology for building multiple versions of commercials that can save time, increase production efficiency, and generate increased advertising effectiveness. Constantly trafficking new versions of commercials is a major expense, and is a hurdle preventing increased use of local cable advertising. This hurdle can now be overcome," says Haberman. He reports that Visible World is starting to work with direct response agencies and is eager to expand discussions with traditional ad agency creative and media groups. "The Visible World service is much easier to discuss now that we have large deployment numbers and New York distribution," he adds.

Visible World Positions TV To Compete With Newspapers For Retail Budgets

Haberman suggests the most traditional of media, newspapers, is much more dynamic for advertisers than TV, and the only reason is the lack of a methodology that enables commercials to be dynamically altered. Visible World, he comments, "creates a virtual circular that allows retailers to change items in commercials quickly to respond to market conditions. For major marketers who invest significant funds into their commercial production," he adds, "it enables advanced copy testing. In television even those who are smart about commercial testing lack the ability to be granular and are forced to adapt their commercials to the lowest common geodemographic denominator rather than recognizing unique local preferences."

Obstacles to Visible World Expansion

There are three remaining obstacles to the growth and expansion of the Visible World service, Haberman comments. "First, the way optimization is thought about is agnostic to the creative message, and we say the message should be considered in terms of how you spend your media dollars. Agencies are not yet structured to recognize creative and media as interrelated. Second, there is a cultural bias in traditional general ad agencies to build one-size-fits-all messages.

This is a tradition that has existed since the inception of television and the industry has not evolved creatively. The third impediment," he adds, "is what folks do in direct world, which is information intensive, and what they do in traditional advertising are worlds apart. Our technology puts those two worlds together."

Prior to forming Visible World, Haberman ran Montage, contributing to the design of non-linear editing equipment now used for "Law & Order" and other television series. He is trained in artificial intelligence and has worked on video game development. He believes he built first graphical online ads when he worked for Prodigy, which was the original Internet service provider. For information, contact Seth at sethh@visibleworld.com or visit www.visibleworld.com.

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