Consumer Electronics

Marketing Machines: Ads Abound on Consumer Electronics


NBC Universal tried some new tricks to promote its new action thriller The Wolfman. The studio placed audio ads on Internet radio service Pandora, ran small banner ads on mobile phones, and created a Wolfman application for Boxee, a device for connecting TVs to the Web.

The advertiser's tool chest is getting bigger. Devices due this year—from e-book readers like Hearst's Skiff to set-top boxes such as the Boxee Box, and even tablet computers like the one due from Apple (AAPL)—will give marketers new ways to pitch goods and services. "There seems to be more of a proliferation of new opportunities now than there was 10 years ago," says Doug Neil, senior vice-president for digital marketing at NBC Universal.

Publishers of newspapers and magazines see these electronics as new ways to showcase publications and generate revenue from ads, while device manufacturers in some cases will share part of the bounty.

Sales of mobile-phone ads are expected to pass $1.1 billion in 2012, from $320 million in 2008, according to researcher eMarketer. Spending on ads for newer technologies such as e-readers may increase at a similar pace in the coming years, says eMarketer senior analyst Paul Verna.

Boxee Promotes The Wolfman

For its Wolfman campaign, begun in January, NBC Universal targeted males ages 18 to 34 through tried-and-true sites like Disney's (DIS) ESPN.com and Hulu, the video site owned by Disney, NBC Universal, News Corp. (NWS), and Providence Equity Partners.

It also experimented. Ignited, an agency that creates marketing campaigns, worked with Boxee to create a free Wolfman application that could be downloaded by Boxee's 800,000 users. Ignited media planner Timothy Fleming calls projects like these "test purchases," since they usually cost little and help the agency learn about a new technology. Ignited typically does about 20 test purchases per year. Internet radio service Pandora was once a test purchase for the agency; now it's standard marketing campaign fare.

Boxee volunteered to help create the Wolfman application to demonstrate to other potential advertisers how its service and set-top box could be used to reach customers. "[Marketers] can see how this stuff looks on a big screen, how people will interact, how many ads they're willing to watch," says Boxee CEO Avner Ronen. "It's a new consumer behavior."

E-Reader Potential

Advertisers are also enthused about e-readers. At an early January trade show, magazine publisher Hearst showed off its Skiff Reader and startup Plastic Logic announced its QUE proReader; both manufacturers plan to bring ads to the devices. Hearst says it will share ad revenue with content partners and use it to subsidize the cost of the Skiff Reader. "We are working on [advertising] now, but it's too early for specifics," says Plastic Logic spokeswoman Betty Taylor.

Skiff President Gilbert Fuchsberg says he hopes certain ads will be more effective on an e-reader than on a Web page viewed on a PC. "There's a lot of categories of advertising that work well in print and haven't really found a home online," he says. For example, certain packaged goods might be better marketed to someone sitting in their living room or kitchen rather than in front of a computer. "There's not a lot of people selling frozen peas online," Fuchsberg says. Advertisers may even be able to make Skiff ads interactive, like zooming in to see the details of a car, or include bar codes to be scanned for coupons at the grocery store. "In the same way that advertisers have gotten creative about serving all types of online ads, the larger [e-reader] devices are going to allow some creativity and experimentation," eMarketer's Verna says.

New electronics won't quickly deliver mass audiences. "E-readers are going to be huge at some point, but it's still in the hundreds of thousands" of users, says Chris Colborn, chief experience officer for New York-based digital marketing specialist R/GA. "It's not going to replace (buying space) across a number of TV channels," he adds. Research firm Forrester (FORR) has estimated that more than 6 million people will own e-readers by the end of 2010.

Target Audiences

Still, emerging platforms such as e-readers offer the ability to target specific customer types. Hoping to reach the target audience for a new Showtime (CBS) series, Nurse Jackie, Omnicon (OMC)-owned Ignition Factory last year released a free script of the show's pilot episode on the Amazon (AMZN) Kindle store. Within 48 hours, the script was among the top 20 downloads on the store.

Microsoft (MSFT) began running ads inside Xbox Live three years ago. "We built the entire service with advertising in mind," says Dean Carignan, director of online ad business strategy for Microsoft. Marketers including Sprint Nextel (S), Porsche, and Frito-Lay (PEP) use the service to reach some of the 20 million gamers who use Xbox Live. Redmond (Wash.)-based Microsoft sells ad space on Xbox Live through its large sales staff, often combining promotions on the gaming console with other Microsoft properties. A recent Discovery Channel (DISCA) campaign for Deadliest Catch ran on Xbox Live, the MSN online portal, Hotmail, and MSN's mobile Web site.

Marketers must avoid bombarding would-be customers with ads. "All these platforms are more personal and potentially more intrusive if used poorly by marketers," says Johnny Vulkan, partner at boutique New York ad agency Anomaly. "Brands don't want to be tarred with spoiling a good thing."

Do guys want to see Benicio del Toro turning into a bloodthirsty wolf on all manner of devices? Execs at NBC Universal may soon find out.

MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.

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