June 6, 2000 5:15 PM PDT

High-tech ads unite print, Web worlds

Ads used to be something you glanced at while flipping through a magazine. In the Internet Age, they are becoming interactive, with readers scanning them with special pens or holding them up to their computer to link to a company's Web site.

Free software released by Digimarc today bridges the old and the new, allowing readers of Wired magazine's July issue to hold up ads to a Web camera that will "read" the ads and open up the advertisers' Web sites.

Thirty advertisers--including Ford, IBM and Visa--are trying out the ads in Wired. In the Ford ad, for example, customers link to a site with more information on a car and are offered a search engine to find a local dealership.

The test is the latest development in the rush to link everything from newspapers and magazines to household goods with the Internet.

In May, a pioneering, small-circulation newspaper in the South started delivering papers enhanced with digital codes that link readers to the Web. A small group of readers were given "pens" to drag over the code and special cradles to link the pens to their computers.

In March, online drugstore PlanetRx launched a similar program, selling an egg-shaped scanner customers can use on the bar codes of their existing household products that they would like to buy online.

"This is a new technology people are playing with," said Michele Slack, an advertising analyst at Internet research firm Jupiter Communications. "Anything that helps close the sale.

"But the two things that are going to slow adoption by advertisers are one, how many consumers they can reach--how many consumers have the Web cam--and two, how many publishers are going to support the Digimarc watermark?" Slack said.

Bruce Davis, Digimarc's chief executive, said he is optimistic about the software, called Digimarc MediaBridge Reader.

"Advertisers see this technology as a means to deliver the benefits of the Internet to customers and prospects via the traditional media that they're already buying," Davis said.

The Digimarc-coded ads will appear in Popular Mechanics magazine in August, followed later by about 160 magazines that have licensing deals with the software upstart.

Customers will have to have a Web camera, however. About 1.4 million PC cameras were sold in the first quarter of this year and about 6 million will sell by the end of the year, according to International Data Corp.

Slack said that scanning an ad from a magazine might also be more difficult for consumers to get used to.

"With Digimarc it requires the consumers to save the page or go over and turn on their computer to scan an ad, and it's a lot of extra steps that consumers aren't used to."

Advertisers pay more for the Internet-enabled ads, and Digimarc receives the surplus, which is generally less than 10 percent of the total ad cost from each publication.

But analysts say that for the same cost of digitally enhanced ads, companies can easily coordinate their promotions better. For instance, if an automaker advertises a new car model nationwide, it should feature the new model prominently on its Web site for interested consumers.

"If the main benefit of this technology is to get to the ad better, wouldn't advertisers integrate their products better and not rely on this technology to overcome a lack of integration?" Slack said.

 

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