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Next Up on Fox: Ads That Can Change Pitch

The unfashionable 30-second television ad is about to get a makeover.

In a move that could help redefine broadcast-TV advertising, News Corp.'s Fox plans to offer marketers tweakable ads -- spots that can be digitally altered to contain elements relevant to particular viewers at the time they are seen. By changing voiceovers, scripts, graphic elements or other images, for instance, advertisers could make an ad appeal to teens in one instance and seniors in another.

Tailoring commercials has emerged as a new goal in the ad industry, thanks to a plethora of media outlets and the increasing fragmentation of audiences. While digital technology already gives cable carriers the ability to offer adjustable ads -- sometimes even by ZIP Code -- advertisers who wanted to customize their pitches in the not-too-distant past often had to create separate spots. The Fox effort could let an advertiser modify a single ad in various ways, minutes before it airs. Perhaps more significantly, it brings the practice to a major broadcast network for the first time.

Should the nation's advertisers embrace Fox's option en masse, some interesting developments could ensue. A beer company, for instance, could have actors refer to the particular teams in a sporting event. Or a soup marketer's ads could cite cold temperatures outside in an effort to sell more product. Fox hasn't officially signed advertisers directly, pending a formal announcement of the service. The network expects to launch the service within the next few days.

Fox is teaming up with Visible World Inc., a private New York concern whose technology can help to create what Bill Katz, Visible World's executive chairman, calls "a living, breathing commercial" that can be updated as a marketer sees fit. "Why would you show the same commercial on 'American Idol' that you would show on Nascar?" he asks. After all, each TV show has different audiences -- not just men or women, or consumers between the ages of 18 and 49, but sports fans, comedy buffs or music aficionados. WPP Group PLC, Comcast Corp. and Reuters Group PLC are minority shareholders in Visible World.

Mr. Katz, a former executive at Omnicom Group Inc.'s BBDO, says other broadcast networks could adopt the technology his firm offers. He says that Visible World has talked to other broadcasters, which he declined to specify.

The networks could use a boost to their ad efforts. With the ad-sales season known as the "upfront" just weeks away, networks are getting ready to hawk their coming prime-time shows to Madison Avenue -- and running into the usual wall of marketer ennui. Advertisers are increasingly fed up with the networks' combination of long-term audience erosion and constant demands for higher ad rates. The burgeoning threat of digital video recorders that let viewers skip ads doesn't help, nor does an attractive array of nontelevision platforms -- such as cellphones and the Internet -- that often can reach consumers in a more-targeted fashion.

"One of the concerns advertisers have in a world where you need to show your commercial more often is how to keep it fresh," says Jon Nesvig, president of sales for Fox Broadcasting. "As much as you are building reach, people are also seeing a lot of the same commercial."

Indeed, a huge complaint among consumers is that they are bombarded with the same ads day in and day out, no matter what program they watch or what time they watch it. "If the ad is not that relevant and I have seen it 50 times, then I'm glancing over and I'm going someplace else," says Steve Lanzano, executive vice president and general manager at HavasSA's MPG media-buying firm. Increasingly important to those who buy TV ad time, he says, is ensuring an ad "not go to the same person five or six times and lose its effectiveness."

One factor driving the broadcast networks to get on board: Cable is ahead of the game. Comcast's Comcast Spotlight cable ad-sales division allows advertisers to target ads to specific viewers based on demographic information and other data. In one example provided by the ad-sales group, Johnson & Johnson was able to rotate ads among different segments of Detroit viewers for its St. Joseph aspirin. One ad, aimed at African-American viewers, featured different copy than ads that ran in other parts of the market.

The Fox service won't be able to target ads by household, but it can change the message for different shows, time slots or days or the week. To use it, marketers and their ad agencies devise a base ad as well as a number of elements that can be inserted depending on certain conditions -- the type of program or audience, for example. A digital file with computerized codes and rules governing how different components of the ad are put together is shipped electronically to a Visible World router at the media outlet offering the service. There, the commercial can be configured and loaded into rotation as instructed. Fox and Visible World will split a production fee charged to advertisers.

"All you have to do is shuffle components or change the components with the same costs of producing," says Robert Clauser, a partner in Accenture's media and entertainment practice. Offering such a service is "one of the very strategic few things we think agencies could be doing now," he adds.

Still, such advertising could change some of the ways Madison Avenue conducts business. "It's going to require some real innovation on the creative side," says Carla Hendra, president of WPP's OgilvyOne North America, which specializes in direct and interactive marketing. One challenge: devising an overall template and the smaller "modules" of content necessary to tailor an ad for a particular situation, she says. If the project requires too many elements, it could be tough on an ad agency.

"If you can deal with 10, 15, 20 different versions, that seems workable," says Jeff Johnson, president and chief executive of Atlanta's WestWayne agency. "If you get into 100, 200, 500 versions, you are going to drive yourself crazy."

But one ad agency's crazy might just be an advertiser's nirvana. "This is where the world is headed," says Kathy Delaney, an executive creative director at Interpublic Group of Cos.' Deutsch. "It's kind of archaic to think that one message is going to hit our entire target."


Brian Steinberg, Wall Street Journal. April 21, 2005

Copyright © 2005 Dow Jones & Company, Inc.. All rights reserved.