IQ News: Analysis – Out of the Box, Off the PC

Web-based ad applications can reach you anywhere.
We’re not quite at the point where Internet advertising is ubiquitous, but if a series of recent launches is any guide, we’re well on the way. Maybe next year at this time, our MyExcite-powered toasters will wake us with the latest whole wheat news and our kidneys will tingle constantly as our cell phones signal us about fluctuations in the financial gestalt.
While we wait, however, a number of companies are already targeting convenience stores, health clubs and public areas at corporate offices and college campuses to unveil Internet-based advertising applications that would have been impossible to execute before the dawn of online media. Not dependent on the PC, these new applications are often developed to fill the nation’s copious down time-according to a recent survey from USA Today, Americans spend 30 minutes a day on average just waiting in line.
One of the places we wait is the convenience store, and one company, at least, figures that people shouldn’t wait until they get back to their car to catch the local news or traffic report. With many retailers having moved the National Enquirer away from the checkout stand, Minneapolis-based Next Generation Network (NGN) has created InLine TV, one of the new breed of advertising media.
InLine TV sends targeted digital content to video monitors in public locations, complete with ads, of course. Bored people waiting while their gas tanks fill or queuing up to buy beer and chips can get a read on the weather, see the schedule for next Sunday’s Corn Fair, and realize that the two-for-one pizza special at Joe’s can solve tonight’s dinner dilemma. InLine TV reaches a captive, prepared audience; there’s no doubt people standing in line at the store are ready to buy.
NGN was founded in 1990 by chairman Gerald Joyce, who saw it as a logical extension of his Patrick Media Group’s outdoor advertising business. Right now, the company has around 4,100 screens scattered through 18 markets, including the San Francisco Bay Area, Manhattan, the Miami/Ft. Lauderdale market and Norfolk, Va. And, although not interactive for the viewer, the channel’s content is delivered to each screen using the Internet’s TCP/IP protocol. Most have been installed within the past nine months, and NGN reports it reaches 5 million people. “It’s tough to find a space in people’s days where they’re susceptible,” says CEO Tom Pugliese, “and waiting in line is one of those.”
InLine TV’s national content is gleaned from wire reports and updated several times a day by human editors in Minneapolis. Some of the local content is automatically generated, such as AccuWeather reports which are coded by airport, so that NGN’s software application can immediately reroute it. Ad reps and community relations directors in each market help produce the local mix of ads, announcements and PSAs, all of which are sent or updated via a Web interface for redistribution from the head end.
Because the service is delivered in an Internet-like process, ads can be posted in an hour. The service also has obvious geographic targeting; UPN and Fox TV have used InLine TV to promote local airings of the Dilbert series and X-Files, respectively. Pugliese says that the service has been popular with retailers, who think it helps ease customer irritation when they’re stuck behind someone who seems to be writing a poem on the check.
San Francisco-based Netpulse has been making the rounds recently at interactive advertising shows, pitching Web content companies and advertisers on reaching its favored captive audience: those poor humans churning the pedals of a cardio-bike at the gym. Netpulse equips standard cardiovascular equipment with the broadband-enabled Netpulse Station, allowing pedalers and joggers to surf or watch broadband content. The company can also deliver pre-cached, full-motion video infomercials and interactive advertisements. The company changed its name in 1997, after being founded in 1993 as Transcape Systems; it shipped the first of its Netpulse Stations in February of 1998. Each gym buys the station as a way to attract and retain members. Netpulse handles installation and pays for the data lines and ISP, sells ads and creates advertising content. The first time exercisers climb on, they register, giving some demographic information.
In future workouts, they log in so the system can recognize them, send them appropriate ads and help them keep track of their workouts. With a touch screen, users navigate through a portal-like opening screen featuring paid placements. “They’re actively seeking distractions from the pain and boredom they’re in,” explains president and CEO Tom Proulx. He claims touch-through rates are off the charts. New York-based women’s community iVillage did a four-month test on the network, and signed a year-long deal to be its exclusive women’s channel. Advertisers include Toyota, Hyatt Hotels, NBC’s, FogDog Sports and hair restoration drug Propecia.
“That combination of an online experience in an offline place gives us some opportunities you can’t do at home or in business,” says Netpulse co-founder and senior vice president of marketing Jeffrey P. Cahn. For example, Berkeley, Calif. maker of energy snacks Clif Bar ran a banner campaign on Netpulse, and had trainers at gyms deliver a bar at the end of members’ workouts.
That same kind of instant gratification is key to Zoom Systems’ Automated Distribution Systems, networked vending machines that combine the rich information of the Internet with instant delivery of a real product. The retailer is open all the time, with the added advantage of being able to serve product information and targeted offers.
San Francisco-based Zoom officially launched as a company this April, but since 1997 it’s been working on a pilot project with Palo Alto, Calif.-based Hewlett-Packard to create E-Stations, large vending machines stocked with printer cartridges and other supplies. They’ve been tested successfully in large offices and college campuses. “We’re doing a complete emulation of a bricks and mortar, with all the benefits of Web-type purchasing,” says Zoom CEO Gower Smith.
Inside each E-Station is a microprocessor running proprietary software that manages what electronic messages get shown to each consumer, handles the credit card transaction, serves advertising and promotions, approves payment and delivers the goods. It also creates transaction logs and generates an inventory list. The station communicates with a global data center via regular modem calls through a local ISP. Information such as special promotions and changes in pricing can be pushed to the E-station at that time.
“We’ve focused on a platform where the vending component is a peripheral under the control of the software and communications platform,” Smith says, “so information goes two ways. It’s instant gratification combined with information.”
As the old saying goes, more or less, an ad in time saves … time.