Exploring the Current and Future State of Interactive Marketing for the Entertainment Industry and It’s Consumer Brand Partners. 

Feature Story, Digitrends Quarterly Review, Winter Issue, 1999
by Elaine Morris Palmer

MARSHALL MCLUHAN REDUX
It was June, 1994. The height of the platform wars. Philips was one of the  largest electronics company in the world. And they owned the prevailing set-top platform, CDI. Hollywood was barely visible on the Interactive scene.

“Philips was used to selling product.  They didn’t understand that they had come to Hollywood–to the entertainment industry.” The person speaking is Lynne Weaver, then, Executive Producer at Interweave Entertainment in Hollywood. Lynn’s partner/husband, Rob, directed the critically acclaimed Voyeur, The first “adult” interactive narrative game for the television and movie-going public. With the rollout of the Voyeur sequel, Voyeur II, came lessons for marketing in the Interactive space that would have implications far into the future.

Philips, a Dutch company, had come to partner with the entertainment industry, but entirely overlooked the way things got done. The writers and producers were  attempting to capitalize on a Hollywood-style cast, David Groh, Dennis Weaver and  Jennifer O’Neil covered the over 40 male audience. Karen Mayo-Chandler and Kari Whitman, young, up-and-coming actresses with a Playboy pedigree covered the younger yuppie and GenX audience.

These were not hard core gaming titles sold off the shelf at Best Buy. These were titles for the television viewing audience, so the game’s producers thought to go where that audience was. “That audience is not standing in front of a rack at Fry’s Market or buying  Jolt! Cola.” explains Weaver. “Gamers are doing that. Our audience is buying makeup at Nordstom, lettuce at Hughes Market, they’re going to Blockbuster  Video.” Those elements needed to have a common thread and that thread was Jennifer O’Neil.

On the success of the Voyeur franchise, women had responded positively in focus groups and the writers and producers of the sequel were women writing for women. Jennifer O’Neil, the original cover girl, was launching her own makeup line at the time. A campaign was designed to
have her do promotional tours in department stores, like Nordstrom, selling autographed copies of Voyeur II to women along side her makeup.

The CDI platform had given way to PC and MAC CD-ROMs.  Interweave built a “prequel” web site for the release.  The World Wide Web was indeed catching on but as Weaver relates, “Unless you were already driving on the freeway we happened to be on and saw us, you didn’t know we were there.” Philips did nothing to exploit their built-in product equity.

Here was an opportunity for Philips to use their previous success and current stars to drive traffic.  The tragedy is, all the pieces were in place. Philips ignored Hollywood’s star power and promotional know-how and assumed their retail partnerships would carry them.

Fade out, fade in. End of the 4th quarter, 1998.

EMOTIONS ARE IN
It’s still hard to imagine “the family gathering around the PC to watch Titanic”, but misread demographics, crossing or not crossing gender lines, mis-promoting, misreading an audience, and letting the audience know you’re even there are still issues that face marketers on the digital entertainment landscape.

There are approximately 60,000 movie screens in America. Must See TV tells us what
to watch, people are still picking up the Hollywood trades and People Magazine and
Sports Illustrated sells bathing suits once a year.

Jupiter Communications 1998 Rational Branding studies (Rational Branding defined as
combining function and information through the service proposition) show that 50%
of consumers never visit the web sites of consumer goods. We know that co-marketing
products which are traditionally sold indirectly with ones that command greater
consumer attention can increase visibility. But package good brands that fill their
sites with games and content, falling into the trap of “marketer as entertainer”
may only be confusing the statement they want to make. Jupiter concludes, “online
consumers differ from off-line consumers in two inseparable ways: control and relevance. Consumers have control over what they do, where they go, and what they interact with online. Brand communications, therefore, must be relevant to those consumers.”

Thus begins a relationship in which consumers, interacting with the brand and deriving
value from the service, are receptive to emotional appeals. This  was a recurring theme
throughout this series of interviews.

As Jupiter’s research shows, “online, the relationship of the three elements, basic
information delivery, service proposition, and emotional appeal– is much closer than
it is offline — yielding a more ‘logical progression’.  Consequently, Rational Branding,
or the emotional appeal, or ‘psychological sell’, that a brand offers is reflected both
by what the product itself is and how it is heightened by the service proposition. This
attempts to enhance the reality of what the brand is based on as opposed to creating an
illusion of what it may be.”

In keeping with the goals of any brand planning: maximizing the impact of insights into consumer motivation, brand relevance and the competitive landscape, entertainment properties have and do play a significant role.

The Hollywood Reporter Media Asset Management white paper in April of this year suggests that “no one practices brand management with the flair, finesse and raw seduction of the Hollywood community.”

ENTERTAINMENT AND THE SPEAR METAPHOR
Then, where is the advantage to a brand marketer in connecting to an entertainment
property in the Internet space? While package goods are relevant to consumers only when the need for that product  occurs, “riding along” on an online car shopping expedition with a leading auto maker, could increase its chance of being top-of-mind when need arises. Jupiter’s study
corroborates, “Informationally rich, high-consideration goods and services, such as auto purchasing or financial planning, fit into the “destination buy” category. These are well-suited to
direct selling from a brand site, because consumers actively seek them out.  More commodified goods, such as soap, food, beverages, household items, and some cosmetics, are better aggregated with others to provide the motivation for consumers to act.”

How can marketers–of package goods, especially–begin to make emotional branding
appeals when the consumer can click away in a heartbeat? Rsihad Tobaccowala of Giant
Step offers the following metaphor to illustrate how consumer control alters the online strategy of marketers. “In direct marketing, you make a spear, hunt down the consumer you want, and impale him. In brand advertising, you make a really, really sharp spear, chuck it into a crowd of consumers, and hope it impales as many as possible. With online marketing you make a spear, and invite the consumer to come and impale himself.”

“Companies like Disney and Time Warner have the brand names and promotion power that
will give them an overwhelming lead in attracting consumers to their Internet sites,”
says Bill Bass, Director of Forrester Research’s Media & Technology Strategies service.
In June of 1997, Bass predicted in his report, New Media Networks, that “these companies
will take their numerous properties and form new media content networks, groups of sites
clustered around a common theme such as sports, that will give users a higher experience
than any single site can deliver.”
Today, lots of entertainment companies are banking on Bass’s prediction for now and for
the future. “The fact is, consumers love on-line content,” says Forrester’s Shelley Morrisette,
Director of Quantitative Research and author of the Report, Media’s On-line Challenge.
“To be effective, on-line media companies and advertisers need to enhance and leverage
this content to gain consumer’s attention and trust.  Adding to the on-line experience
will increase consumer’s willingness to share personal data, respond to ads, and buy
products that advertisers and media companies are seeking.”

For example, the Clairol Web site, (a Bristol-Meyers Squibb brand: http://www.clairol.com)
part of Jupiter’s study, incorporates a unique service proposition: After scanning in a photo of themselves, users can see what they would look like with another hair color, helping them to decide–and to purchase–the color that suits them best. You can’t buy the product itself online, but this way of providing enhanced services makes a richer more functional product. As Marc
Johnson, Senior Analyst of Online Advertising and Principal Analyst of the Rational Branding Study suggests, “It’s delivering the goods that the brand promises versus just making the promises.”

Additionally, Clairol is understanding this “piece of human need.”  The need to look better and not look foolish trying. While hair color, by its nature can force that risk upon the user, Clairol acknowledges the product “shortcoming” and creates an online service to address it. Some elements of the interactivity with the consumer online could filter back into their R&D. As the Rational Branding Study further iterates, “And such a service proposition helps to effectively move the emotional appeal on to the next level.”

Before jumping on board, advertising research, Ipsos-ASI Inc.’s Marianne Foley, recommends
gathering intelligence, “In the beginning the Internet was a fringe kind of thing now there’s
good data that can give you early indicators of traffic, behavior, consumer patterns.” Foley
says you can find out what’s going on today and if you’re choosing an entertainment property,
it shouldn’t be haphazard. She suggests looking at the flavor of the property and developing
creative along those lines.  Foley believes there are good answers to questions like:  what
kind of traffic does the entertainment property site get, what are the demographics of the
people going there, the congruence with your brand and your image and equity. “This is all
about equity building,” she adds.

Says Greg Bauer, Vice President of Online Advertising at Ticketmaster, “When you can define
an audience and rely on that audience to keep coming back, if you’re smart, you can define
that web site as an extension of your core competency and of your media and marketing
opportunities. Advertisers who want to speak to that audience will want to advertise on
that website.” In addition, Bauer believes that certain organizations have services whose
functionality alone will breed an audience. In the case of Ticketmaster, the site isn’t just
another distribution channel for selling tickets. An online user can also launch “My
Ticketmaster” (http://www.my.ticketmaster.com) where virtual 360 degree views to the
stage or field of play from 17,000 locations in about 80 venues can be accessed before
purchasing any particular seat.

YOU SCRATCH MY BACK…

“Brand advertisers will want branded content,” further reports Forrester Research. One reason CNN has been successful on-line, the report tells us, is that it sells CNN Interactive in a package deal alongside its other properties. “As targeting gets more sophisticated,”  the report goes on to say, “Users will be more willing to trust established content networks with their information. [Networks, in turn,] can leverage trust in the content to serve as an emissary for
advertisers.”

Conversely, Forrester advises content networks to focus on the advertisers that will form the core of their long-term support. “Each content network should cultivate the unique set of related product and service suppliers that fit.”

Steve Rimland, Head of New Media at Interscope Records is a big believer in cross-marketing.
Interscope’s site “genre-izes” or segments music types such as rock, hip-hop, R&B, gospel,
sound tracks and compilation into categories drawing various demographic groups. “Our website is a culture, it’s more than just a music website,” he says.

Rimland adds that his biggest challenge today is choosing his partners wisely. “We want to
create an online youth culture environment around each of our artists…We always have to
ask ourselves if kids relate to this as hot brand right now. You have to go in the street,”
Rimland states, “All our business revolves around what the street says…and you also have
your stable partners…”

Rimland knows that fans of Interscope’s acts have a certain fashion style and like certain
things, play certain games, have a certain rhythm of life. “You have to have a website
where everything comes together in one place.”
Interscope did a co-branded theme last year with Kenneth Cole’s Reaction line. Rimland explains, “We did an enhanced CD compilation using ten Interscope acts. We packed each other’s web sites and gave the CD out as a gift with purchase at Tower Records. It became one of the hottest CD’s to have. It helped get our music out there but it also gave [Kenneth Cole] an association with a cool brand and drove people to their website.” An enhanced CD element takes people who are offline buying in record stores and brings them online. From that
component Interscope created a huge database of fans…for artists’ tours. And, as an incentive, those who bought the CD online couldn’t get shut out of the concert.

Interscope also recently set up a promotion with CDNow and Miller Beer. Fans can pick their own songs, build their own compilation and starting July 4th, Miller has on- and off-premise marketing efforts. Rimland feels there is a need for both an online and an offline component to promotions. “There’ll be displays with high – profile bands and Miller will promote them on 7 – 10 million cases and bottles.” Says Rimland, “You can really hit a home run.”

In his six months at Interscope, Rimland closed an ISP (Internet Service Provider) deal with AT&T Worldnet who is looking for subscribers. “It’s one of the biggest deals in the music industry – AT&T is supporting the albums that they’re on. They’ll also advertise around an artist,”  he says.    For example, the relationship with AT&T gives Black Street, an Interscope band who is interested in sending a message to fans about higher education, a chance to do so through the AT&T Learning Center.

Rimland adds, “A CD is only software, now we can give added value — exclusive material once they get to the web if they have the disk and one month free Internet Access with AT&T.”
Interscope and AT&T Worldnet together provide a service for the audience and bond with the customer.

Recalling  first and foremost that the job is to protect and enhance the brand AND sell product, Alexander Gellert, Executive Vice President, Integrated Communications, Lowe & Partners  Advertising, suggests determining what the brand stands for, finding the crossover and the links, defining what to do together, and deciding on a way to deploy that to the consumer. So many have failed to follow this seemingly basic procedure. Gellert feels part of the reason for that is, “we act as if people are schizophrenic. That they are person A in front of a radio, person B in front of a TV, person C in front of their computer, person D when they open their mail and a person E when they read a magazine or newspaper.
They’re not. They’re the same person with the same set of emotions and the same likes and
dislikes, wants and desires, and that plays out whether in a movie theater, in front of a
television screen or anywhere else.”

GOING WHERE THE AUDIENCE IS
Trusting in that principle wholeheartedly, Rusty Citron, Founder and CEO, As Seen On,
Inc., (ASO) Bellevue, Washington, is exploiting the enormous impact entertainment has,
on commerce in general, the economy and specific businesses exposed in television, film
and video. Not formally announced yet, Citron’s ASO selects current movies, TV shows,
home and music videos with identifiable consumer goods or services and then, by obtaining
the rights through the entertainment company, makes them readily obtainable for purchase.
Requests are routed to the appropriate retail partner, the ASO Processing Center or to
the ASO web site.

“Using e-commerce to turn millions of viewers into millions of buyers!” is how Citron hopes that both manufacturers and entertainment companies can take advantage of massive numbers of people in this country engaged in entertainment on a weekly basis. The existing focus today is products in search of an audience. ASO reframes the focus to audiences in search of products. An enviable place to be if you’re a brand. Or anybody selling anything for that matter.

For ASO, it boils down to quality and an audience which represents a massive number of buyers who want the opportunity to buy. Citron delineates, “It’s a vehicle to purchase brand name products that are used in entertainment programming. It’s called leveraged equity.”

Citron, a veteran of the entertainment industry, has relationships with most of the major studios and with retailers and manufacturers. Market by market, advertising what exactly is for sale will appear on radio, in print and on television.

Bottom line: “We’re driving the manufacturer’s business with no cost of sales to them.”

“The jury’s out,” says Citron, “on the true convergence of the PC and TV. There’s a market out there today who can access this service through the Internet or by picking up a telephone. Enabling technologies,” he emphasizes, “get entertainment properties to a much better audience. It gets them there deeper, gets them there faster and gets them there again and
again and again and again. It enables you as a marketer to reach a massive market and a specific market simultaneously. That’s the joy and the excitement of technology,” Citron
continues, “You can be out there with a movie that’ll reach 20 million people in a weekend and you can also get a list Monday morning of the 400,000 people who bought your product. ASO is a connecting service that gives everybody a win-win.”

Content networks on the Internet tackle the slippery task of developing hits. Forrester Research again suggests that these content owners view advertising and customer relationships as key strategic assets and advises that, ultimately, they will control the bulk of advertising. “When digital television becomes a reality,” says Citron, “I won’t have to advertise.”

Along these lines, Ipsos-ASI’s Foley predicts the direct marketing model approach to the Internet is going to give way to an Internet community that is all-inclusive: television, magazines, everything. “It’s not about click-through and how we buy things where we just slap a catalog online.”

At Santa Monica, California-based Intertainer they are taking full advantage of that theory in what they call “a new generation of blazing-fast access alternatives just hitting the radar.”  This
new company plans to provide video-on-demand, electronic shopping, music, and other services to the home over high-speed telephone lines or cable television devices. “We are the future of digital entertainment and electronic commerce,” says Richard Baskin, a music
producer who shares his chairman and chief executive duties with Jonathan Taplin, tour manager for Bob Dylan in the ’60’s and producer of Martin Scorcese’s Mean Streets. Along
with film Director, Jeremiah Chechick, the founders have a combined 50 years experience in California’s most fickle town. “If there’s one thing Richard and I understand,” Taplin says, “it’s how to work in this industry.” The company has licensed new hits and classics from several major Hollywood studios, signed agreements to distribute television programming from PBS and National Geographic and access several independent cartoon, fashion and travel-oriented shows.

Intertainer’s business models rely on shared revenues from video-on-demand sales, advertising, and online shopping transactions. Says Terrence Coles, Vice President of
Commerce and Advertising, “In any new medium, the risk is missing your target or failure to design a compelling message. In the new digital marketplace, taking risks is actually the name
of the game. The cost at this stage of the game is much lower than it will be as the market evolves. Taking risks actually creates opportunity.”  Intertainer provides opportunities for advertisers to sponsor content or to deliver a message by targeted video.

Coles agrees the opportunity to link a user from an ad to the purchase decision is very powerful, but Foley, who has focused on advertising research for the past ten years, states that advertising that delivers the right message against the right need will invariably do better. “On television, people don’t develop advertising for a show, they develop an ad and then they go against demographics. You might get the same ad on ER that you get on Friends. And they’re very different shows.” On the Internet you can pick your content and embed it in a property. “The whole concept here is targeting,” continues Foley, “the whole promise of the Internet is the individual, not the mass. Our feeling here is that while the Internet will become mass in terms of reach…it is never going to be mass in terms of audience the way other media has been. And it doesn’t cost a lot to customize things because of the varying technologies that can do that now.”

THE RELEVANCE FACTOR
Lowe & Partner’s Gellert emphasizes that the use of entertainment properties have to be an intricate part of your story. It must to work to further the creative objective and, ultimately, the client’s strategic objective. Gellert believes the Internet absolutely plays a role for a brand. But, the Internet is no exception to his rule of thumb for any other medium, each with unique strengths and weaknesses. If co-branding with an entertainment company makes sense, has a
synergy and fit and some reason to be together in any medium, then it does. Conversely, says Gellert, “There doesn’t seem to be a reason to go into co-branding on the Internet and nowhere
else.” Gellert advises finding the natural synergies and then deploying across all media.  “And that doesn’t mean you don’t use [those media] differently,” he adds, “TV is a push medium…the
Internet is much more of a pull medium, an information resource, a shopping environment.” Either way, Gellert says, “You tend to capture people by showing something they enjoy watching or doing. The Internet is no different.”

Scot Safon, Sr. Vice President of Marketing at Turner Network Television (TNT) always presents advertisers with an Internet component. “The things you associate with entertainment and entertainment products are on the Internet,” Safon says. “It’s engaging, you interact, explore, there’s a joy of discovery. There’s a level of involvement by the consumer.”

While an entertainment property like TNT can service fans on the Internet by letting  them experience shows on a level beyond TV, affinities with brand marketers and TNT’s consumer base intersect in many areas. “I underestimated on how many levels this medium works,” reflects Safon, “to be entertained, to get gossip, to contact people, to pick up competitive information, to sell things. I’m amazed.” Safon believes clients should reward agencies for spending money and brainpower on innovative ways to use the Internet space and is a willing and ready potential partner for marketers regardless of the size of a media flight.

“We educate advertisers in conduction with our ad sales,” continues Safon. TNT has, to date, done successful co-branding online with Hyundai, Nestle and Coca Cola and Safon believes there are synergies that should be explored and exploited, but believes this in not a “GRP kind of medium.”

Pat Wyatt, responsible for marketing and selling of all Fox Entertainment properties and former Vice President of Marketing at Mattel, believes that, for the moment anyway, if the Internet doesn’t produce direct sales for the brand it is at least a useful awareness tool. “You have to decide if your product or service requires a long-term relationship with your consumer,” she points out. The challenge for advertisers is “how do you make yourself relevant to the public.” Wyatt says that with all the existing alternatives and all the consumer choice, “we have to
continually surprise and delight, not just with the message but with the way it is presented. Formulaic thinking is the kiss of death.”

CONVERGENCE – A DIRTY WORD?
With convergence of digital media well on the way, Wyatt sees a different relationship
emerging between a brand and its consumer. “It’s harder to build a consolidated viewership
to pound your message home.” The Internet presents an opportunity to custom-tailor the kind
of entertainment and information people will get in the future. Wyatt advocates developing
greater skills for really knowing who your target market is and meeting them where they  live.
“A brand then becomes a beacon to people,” she emphasizes, “it helps them decide what’s for them, what they want to associate themselves with and how they spend their time.”

What of convergence? Says Wyatt, “This is one of those major cultural shifts that’s very challenging. Tried and true practices from the past no longer hold. And they require a re-
definition that has no clear answers. The future isn’t crystal clear, but the past is shattered. The marketing people themselves have to have a blend of good analytic thinking and a risk-taking, a go-from-the-gut kind of feel. You’ve got to balance them together and be right more often than not.” Wyatt hastens to add, “This is a point of great excitement, great opportunity. This is the nucleus of what’s to come. Go invent something new! Rewards will go to the clever and the swift.”

It is the consensus that convergence is simply up to the consumer. And he doesn’t just sit passively and wait for a programmed message to come. He is actively pursuing more knowledge. Having said that, it behooves the marketer to know his audience well and target the best possible message in the best possible medium.

NET, NET.
When the FCC advisory committee decreed in 1987 that HDTV was “an economic opportunity
of almost unparalleled proportions, broadcasters, chipmakers, phone companies, satellite interests and cable companies all wanted a piece of the action.”  Eventually the computer industry sold the FCC their version of the convergence of consumer electronics and computers
which will ultimately lead to the complete phasing out of analog. Consumers’ wishes do not figure at all into the picture and many years, political action committees and dollars later, we wait.

The Los Angeles Times reported recently that when the space shuttle Discovery left earth,
it was the fist time a color printer was sent into space. On Halloween, the crew printed
color portraits of senator John Glenn from a floppy disk they carried into space and fashioned
the printouts into Halloween masks. Marshall McLuhan was known to have said that “people
tend to define things through a rear view mirror” but it’s pretty clear even now that  digital media in whatever form it takes is taking over. The issue isn’t so much what device the message comes through, it is on the other hand, how audiences react to whatever spills out of the screen, whether PC, Open TV, Enhanced TV, Digital TV, DVD-ROM from a satellite, DSS, DSL, ISDN or Speak’n Spell.