Digital ads
bend reality
Believe your eyes? Digital images
appear real to TV viewers
04/24/00- Updated 12:27 PM ET
By Bruce Horovitz, USA TODAY
LAWRENCEVILLE, N.J. - Think you know
an ad when you see one?
Hold that dial.
Madison Avenue is sitting on a seismic
crack that ultimately could rip apart the very
definition of what constitutes an advertisement.
Made you look: Princeton Video
took a blank space behind the batter at a
baseball game and placed an ad.
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At the epicenter: virtual ads -
digitally created images that don't exist in reality but
appear to be very real to millions of viewers who see
them on their TV screens - like a Coca-Cola logo in the
center of a soccer field or a Budweiser logo in a
wrestling ring. In this year's international - but not
domestic - TV broadcast of the Super Bowl, discount
broker Charles Schwab used virtual technology to place
color coded signs that spelled ''Schwab'' in the hands
of fans in the stands.
For the moment, virtual advertising is
an industry the size of a gnat. Total revenue was less
than $10 million last year, media buyers estimate. But
industry experts suggest that figure could top $1
billion within five years.
Some say virtual ads ultimately will
take over as 30-second commercials increasingly become
obsolete. Special devices now coming on the market can
pick up the codes of TV ads and zap them out of video
recordings - or even as you watch, if you allow a few
minutes of delayed start. But darned if these machines
can zap virtual ads inserted in the actual programs. And
while you can switch the channel to avoid a TV
commercial, virtual ads are often right in the middle of
the action.
Perhaps nobody knows that better than
Brown Williams. The company he co-founded, Princeton
Video Image, is quietly placing virtual ads in athletic
events and other TV broadcasts worldwide. Beyond that,
it has even bigger plans to noodle its way into the very
heartbeat of mass culture: virtual products placed
inside TV shows and films.
''We think we're going to change the
definition of what an ad is,'' says Williams, from the
firm's modest headquarters at a nondescript industrial
court. ''It scares the heck out of guys who make ads.
And it scares the heck out of me.''
But even as virtual advertising
threatens to turn the nation's $87.5 billion ad industry
upside down, it also has an impact on consumer trust.
''It's about lying and cheating,''
says George Gerbner, communications professor at Temple
University. ''It takes advantage of the public's belief
that a broadcast of a real event actually conveys what's
going on.''
Already, virtual advertising is
evolving to places few expected to see it so soon:
Grammys. During the pre-awards
telecast last month on CBS, virtual ads for Nordstrom
and Harrah's were placed in an entryway. No one at the
ceremony saw them, but millions of TV viewers did.
''It was a little bit outside the
box,'' says John Moczulski, vice president of
programming for CBS-owned stations. ''It's a way to
further brand advertisers.''
Baywatch. Pearson Television,
which produces the TV series Baywatch Hawaii, is seeking
advertisers who want to place virtual products inside
future episodes. It expects to sell its first virtual
product slot - perhaps a bottle of branded suntan lotion
stuck in the sand at the beach - for a show this fall.
''The trick is to make it look
seamless,'' says Mike Weiden, president of ad sales at
Pearson. Virtual product placement on the show would
cost the same as a 30-second commercial - about
$150,000.
Early Show. Eager to quickly
get viewers familiar with the show's brand name, CBS
hired Princeton Video to make it look like the show's
logo is in all sorts of upscale New York locations seen
on the show. TV viewers see the logo atop the Plaza
Hotel or inside the skating rink at Central Park. The
virtual logos are seen only by TV viewers, not by people
at these locations.
''No one feels we're altering the
editorial content of the program,'' says senior
executive producer Steve Friedman. ''It's simply part of
our branding.''
Seven Days. The science-fiction
series on UPN last year placed virtual products for
three advertisers - Wells Fargo Bank, Evian water and
David Cole shoes - on one episode. Because that was done
as a test, advertisers did not pay for the publicity.
Although UPN has no plans to do it
again, it's keeping its options open, says spokesman
Paul McGuire. ''This opens a vista of advertising
possibilities.''
CBS News. During a
much-publicized live broadcast on New Year's Eve, CBS
replaced a real NBC logo erected at Times Square with a
virtual CBS logo that appeared over anchor Dan Rather's
shoulder. The network took plenty of heat; even Rather
later said it was a mistake. Critics charged that by
doctoring reality, CBS News compromised its journalistic
integrity.
Rather declined further comment. So
did CBS News president Andrew Heyward.
What's next?
By fall, sponsorship rights to that
bright yellow first-down line seen on many televised
college football games on CBS and other networks could
be sold. Advertisers are bidding now to have their logos
placed on those virtual markers.
''You might be offended the first time
you see it,'' concedes Charles Bachrach, executive vice
president of media at Rubin Postaer and Associates,
which is negotiating for virtual space along the markers
for client Charles Schwab. ''But I want to lock in the
space before E-Trade or Merrill gets there.''
So, it's mostly about being first.
On that score, it might seem that the
very first virtual ad would have received the most
publicity. In fact, almost no one saw it.
In June 1995, a mid-Atlantic financial
institution called CoreStates Bank, which has since
merged with First Union, paid Princeton Video $900 to
locally broadcast its virtual ad on the wall behind home
plate at a Trenton Thunder minor league baseball game.
''We were so ecstatic, we drank up the
$900,'' Williams recalls.
Virtual advertising hit the big
leagues in May 1996, when a Bay Area broadcast of a San
Francisco Giants game featured virtual ads for local
Toyota dealerships.
Since then, it's been used in sporting
events worldwide. The San Diego Padres have sold out all
their virtual ad space for home games for the season. It
guarantees the team nearly $1 million in ad revenue.
But some off-the-field brawls are
taking place in the virtual ad world.
SportVision, creator of the virtual
first-down line used on ESPN for two years, is suing
Princeton Video, charging patent infringement. And
Princeton Video is suing a smaller rival, SciDel
Technologies, also charging patent infringement.
With such bickering going on, you
might think the companies that develop virtual
technologies are rolling in dough. Far from it. Most are
losing money. Princeton Video, by far the biggest, lost
about $9 million in the year ended June 30, 1998, and
nearly $10 million in the year ended June 30, 1999.
Executives project losses will decrease this year, but
won't say by how much.
And Princeton Video continues to fund
development, nearly $50 million over the past five
years.
Acceptance growing
Advertisers and consumers are
beginning to accept virtual ads. Princeton Video CEO
Dennis Wilkinson envisions virtual product placement as
the company's big growth tool. That's because product
placement on a single episode can be sold and resold
many times in reruns and syndication.
To illustrate, Wilkinson shows a clip
of a recent episode of Friends that has been doctored by
Princeton Video. In that episode, a cast member is
munching a cookie. To help sell advertisers on the
virtual concept, Princeton Video has used its virtual
technology to place a package of Oreo cookies on a
kitchen counter. This video is used only as a sales
tool, however, and it has never aired.
Some day, say, in foreign syndication,
the virtual image of that package of Oreos could be
replaced with another brand sold in that country. The
same space could be resold repeatedly.
''The trick is to place products
seamlessly,'' says Wilkinson. ''What could be more
natural than to have a box of cookies on the counter?''
Federal regulators are mostly
disinterested.
''It hasn't been a major issue,'' says
Lee Peeler, associate director for advertising practices
at the Federal Trade Commission. ''In looking at any
advertising technology, what the FTC wants to know is:
Does it misrepresent a material aspect of the product?''
Officials at the Federal
Communications Commission say no complaints have been
filed.
Critics say that if the federal
government doesn't get involved soon, virtual images
will become as engrained in U.S. culture as, well,
commercial breaks.
''It's a sneaky way to get your brand
name in front of viewers,'' says Michael Jacobson,
author of A Survival Guide for a Consumer Society.
''There's no label on it that says this is
advertising.''
Such labeling could be the cure.
Already, some European countries require virtual
advertisers at televised sporting events to inform
viewers of the ads before and after the broadcasts.
About once a week, Early Show co-hosts
Bryant Gumbel or Jane Clayson will jokingly inform
viewers that the Early Show logo just broadcast on, say,
the back of a horse-drawn carriage at Central Park was
make-believe.
''Ultimately, you can make anything
look real,'' says Friedman, the Early Show producer.
Regular viewers have become addicted to guessing where
Early Show virtual ads will show up next, he says.
But, Friedman adds, ''a technology as
powerful as this in the wrong hands could surely be used
for ill.''
Even Princeton Video says it has
refused some client requests. A foreign network
broadcasting a sparsely attended soccer game asked the
company to use its virtual technology to make the stands
look full of fans.
''We're not tampering with reality,''
says Wilkinson. ''We're just putting some ads out
there.''
Way out there. In the ether.
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