Interactive and what hasn’t changed – Strategy Magazine February 13, 1994

It’s been said that the trouble with the future is that it usually arrives before we’re ready for it and, in interactive media, the future has started to arrive, heralded (as it usually is) by the unmistakable sound of money hitting the table.

If you’re looking for opportunities to grow your business via interactive media, the key word is opportunities. We’re a long way from a significant reality…and not just in the technology department.

Somebody finally thought to ask consumers what they think of it all. A study conducted by Advertising Age found that only 19.1% of US consumers are even aware of the concept of interactive media. 80.4% were not aware of interactive media at all! Despite the proliferation of front-page banner headlines, business news stories and hyper hype.

So, who’s going to be the home shopper of the electronic future?

Traditionally, 60% of shopping from home has been conducted by women, but when it comes to TV shopping almost 50% are men. Does that say men spend more time watching TV? It probably depends on the day of the week and the progress of the home team!

Not surprisingly, age plays an important role in TV shopping. In theory, retired people have the time, money and interest in TV to be good prospects, however, scarcely 11% of retirees actually shop from TV. Meanwhile, almost 45% of TV shoppers are under the age of 35. Compare this to traditional catalogue shoppers where less than 33% are under 35 while almost 14% are in the senior age bracket.

Traditionally, the majority of paper catalogs appeal to a, relatively, up-market crowd. Almost 40% of catalog-shopping households earn over $40 thousand. TV shoppers, on the other hand, have been decidedly down-market with almost 45% earning $25 thousand or less.

Given the billions of potential sales dollars all the articles about interactive tell us about, the gentrification of TV home shopping is to be expected. Upscale American catalogers are not jumping on the band-wagon to sell junk jewellery to housebound women from blue-collar households with overextended credit cards which is how traditional marketers have generalized home shoppers.

Interactive television and the super information highway has become the buzzword of the 90’s, but, by the time it all comes into existence, I’m afraid, we’ll all be tired hearing about it.

There was a wonderful cartoon in the Globe and Mail recently. The scene is a dark and stormy winter’s night. Snow is piled to the eaves of an isolated house. The first dialogue balloon says, “Another ferocious blizzard! No power! No phone! No TV! No computer! We’re totally cut off from the information superhighway!”  The responding balloon says, “Isn’t it wonderful?”

Despite all the news stories assuring us it’s just around the corner, at the moment, interactive TV is confined to some very localized testing in the US among a few thousand households. Predictions are that systems will roll out from 1996 to 2000 and that by 2000, $3.5 trillion in worldwide sales will be conducted through interactive TV. Meanwhile, the Canadian company, Videotron, has had a modest head start in Quebec since 1990 with the largest, most advanced system and 230,000 subscribers.

What does it all mean for marketers? For starters, don’t panic–time is on your side so let those with the most money iron out the bugs first. Likewise, don’t cancel your printing contracts. The paper media won’t disappear. It will  (or should) change to integrate with all marketing efforts in whatever media, so get ready for a metamorphosis. Tune in now to learn for the future. Get involved, if you can, in helping mold the products and services consumers will be offered. Build relationships with people, and companies who are in the fore-front of technological developments.

Since the superhighway is still in the future, in the meantime, try to learn how to use television. And, look for co-venture opportunities because it’s often too expensive to do on your own.

In the end, always keep in mind that it’s only the media that has changed. You still must offer high quality products at affordable prices, satisfaction and personal service.

Joel Barker, the author who made “paradigm” the business buzzword of the early 90’s said, “The best time to look at new ideas is well before you need them”.

And, I say, the time to start looking at interactive media is now But, look hard before you leap! Don’t forget about that 80% of people who have yet to figure out what interactive media means…and could care less!

Charles de Gruchy remembers how it was

Privacy at any price! Strategy Magazine March 05, 2002

Anybody here seen my old friend “accountability”?

The one thing traditional direct marketers can now say about the dot com world is that it provides an opportunity to validate many of the strategies and policies that have guided profitable companies for many years. Now that profitability is coming back into fashion, maybe we’ll start to hear more about how that happens. In the meantime, the dot coms are learning  some old lessons the hard  way. Lessons learned long ago by traditional direct marketers and list owners. Such as privacy policy. The difference now is that the issue of customer privacy is further complicated by the issue of company bankruptcy.

As a consequence,  it may be time to really start seriously worrying about the potential for government intervention in privacy. But, guess what, it may not be in the form of legislation. The government may just sue you. That day came recently for toysmart.com.

In early June, the company filed for bankruptcy protection and authority to sell its assets by public sale. The assets were split into the expected categories including leases, furniture and equipment, software and operating systems. An additional category included web site applications, trademarks, product designs and customer lists and related information. Because this was a public sale, the assets were listed in the Wall Street Journal and….  The public nature of the process brought the issue to the attention of the companies own privacy …mark licensor, Truste. With overtones of government sanction, Truste  has established itself as a leader in authenticating the privacy polisies of the companies whish are licencees. By offering the customer list and related information as part of a public sale of assets of the bankrupt operation, toysmart.com  stumbled over their own privacy policy, the policy they had paid Trustee to endorse. Truste, viewing the sale as an attempt to pass customer information to a third party without customers’ consent, began its stated process of dealing with the situation. First, trying, unsuccessfully, to make contact with toysmart executives. In the frenzy of dealing with a crumbling company, no doubt toysmart executives thought messages from Trustee were the least of their worries. Their mistake was forgetting the process their license gave leave to Truste to pursue….alerting the FTC and suggesting that the potential sale mioght be classified as unfair and deceptive marketing practices. The FTC agreed, and sued to prevent the sale of the database.

Parent company, Disney, has very quickly stepped in to stem a potential public relations nightmare resulting from the situation. But, let’s look at what went wrong.

  1. Remember to never say never — Users have a right to informed consent; and   No single privacy principle is adequate for all situations Two cornerstone principles that govern the TRUSTe program: Let your own self-regulated privacy policy back you into the corner of unfair and deceptive business practice
  2. Right hand/left hand     One size rarely fits all. One of the two cornerstone principles of Truste is that “No single privacy principle is adequate for all situations”. While toysmart’s policy worked really well to bring    Self-regulation in response  to fear of legislation      “When you register with toysmart.com, you can rest assured that your information will never be shared with a third party.”
  3. “All information obtained by toysmart.com is used only to personalize your experience online.”
  4. Stating a privacy position
  5. It’s not about protecting customers’ privacy. It’s about ethics. Now, there’s a concept.
  6. Jumped on the TRUSTe bandwagon but didn’t read the fine print
  7. Need to overcome consumers’ reluctance to purchase on-line
  8. Privacy policy for the wrong reasons
  9. And, now a few short years later, enter the privacy policy backlash.
  10. Closely followed by the Truste initiative, which, as the name suggests, was designed to provide a “seal of approval” around a licensee’s treatment of customer information. And, conversely, provide reassurance to consumers that certain expectations would be met.
  11. Treat privacy as policy not promotion.  In the headlong rush to e-commercialism, one of the early dot com challenges was overcoming consumers’ distrust of doing business online. Enter the notion of privacy policy. The thought was it would encourage people to buy—didn’t .
  12. Toysmart.com’s mistake was 2-fold. Tried to package up the customer list with its trademarks, goodwill, URL names
  13. Honor your  stated privacy policy

How many retailers are really concerned?  Now, many many more.

Charles de Gruchy remembers how it was

The CD ROM Magazine Strategy Magazine February 4, 1994

And we  thought we were so sophisticated!!

I’m sitting here at my computer, ‘reading’ the world’s first magazine on cd-rom.

Called Nautilus, it is published by Metatec, located at 7001 Discovery Blvd., Dublin, Ohio 43017-3299, and costs US$137.40 for 12 issues.

Nothing to fear

Despite the usual hoohah about the death of print, I can assure you publishers of The New Yorker and Vanity Fair have nothing to fear.

A magazine on cd-rom is a different kind of medium from the print-heavy magazines that offer lengthy, juicy reads while riding on the subway, or propped up in bed.

You do not flip the pages of Nautilus; you boot it up on your computer. A couple of minutes pass, while the computer absorbs the basic startup data. Graphics slowly form on the screen, and you hear an announcer giving you highlights of what is inside.

Elements

There is a ‘table of contents,’ and there is an ‘index.’ And, once you get the hang of it, you will find there are articles and pictures, just like in a printed magazine. But that is where the similarity ends.

With a multimedia/interactive ‘publication’ such as Nautilus, there are also music videos with cd-quality sound and visuals that run in a kind of stop-motion animation.

A roundtable ‘article’ about computers and the automotive industry features the participants as talking heads that can be seen and heard.

There is an ‘electronic new car showroom,’ which provides information about 19 of the 1994 models.

If you want more information on something in particular, you point your mouse and click, and another window opens with more details.

There are computer games, and there is even free computer software. There is a sample language lab tutorial, a children’s field trip to the Columbus, Ohio zoo, and a few dozen other features.

The biggest difference between Nautilus and ordinary print magazines is the amount of data it contains.

Storage capacity

The magazine takes advantage of the enormous information storage capacity of the cd-rom – about 650 megabytes per issue (a cd-rom disc can store the equivalent of 360,000 pages of text.)

That capacity permits the editors to create a grab bag of contents, as well as using the computer memory-intensive tricks of animation, color pictures and music.

What’s missing from this picture? A few ads, perhaps?

Jeffrey Wilkins, the founder of Metatec, says in a computer magazine interview last July:

‘I really believe that people who use information services do not want intrusive advertising, but they do want access to advertising.

‘As time goes on, we will provide more and more access to advertisers, but only if users choose to look at it,’ Wilkins says in the interview.

‘You could say that the software demos we include on Nautilus are advertising, but there are no pitches about why to buy the product,’ he says.

In reality, of course, Nautilus is a marketing tool. It does market software directly, and offers free samples/previews of computer games, and demonstrates other computer software products that are for sale commercially.

Marketing the medium

More importantly, for the moment, what it is marketing best is the medium of cd-rom.

For a concrete example of what this mysterious thing called ‘multimedia’ is all about, Nautilus is an excellent place to start.

There is, of course, audio and video and text. And there is the sheer tonnage of information that can be stuffed into it. What makes it really different is the power of the computer.

You point and click, and things happen. You can ‘use’ the magazine, ‘play’ with it, and you can extract software to put on your computer and use after you have removed the Nautilus disc.

But, most important, you can learn from it – and it is a powerful communications tool. And that is, after all, what we, as professional marketers hope to do – reach an audience, communicate with it, and impart something that it can use, or absorb, as a ‘call to action.’

Nautilus is also just the tip of what is turning into the biggest communications iceberg any of us may ever live to see.

Right now, as Wilkins says, Nautilus is a special product for a special audience – what he calls ‘early adopters.’

They are mostly upscale computer users at job and home, ‘very male,’ and well-educated.

But competition from the mass market consumer publishers is already here.

Newsweek is offering quarterly editions of current affairs material on cd-rom. And there is advertising on its cd-rom editions.

Admittedly, it is just tv spots for at&t, ibm and Lincoln/ Mercury, reprocessed for the limited quality of video animation available on cd-rom.

But there are plans for custom cd-rom advertising on the Newsweek discs; and that should be just around the corner.

Any visit to a computer store these days would also reveal a heavy new marketing push on cd-rom software, especially from companies such as Sony, Warners, and Microsoft, who have introduced a new brand, Microsoft Home, to market a growing line of sophisticated cd-rom programs.

These include everything from a tour of the National Gallery in London, and an elaborate program on dinosaurs that includes video from the pbs dinosaur series, to such highly regarded reference tools as Encarta, an audio/video/interactive encyclopedia.

There is Microsoft Bookshelf, which includes seven key reference books, from the Concise Columbia Encyclopedia to Bartlett’s to the Hammond Atlas.

All of them feature random accessibility of information through a cross-indexing system. Pick a topic and the computer searches the mass of data and instantly tells you, for example, the history of Afghanistan, shows you a map, gives you pictures, reproduces its flag, and even plays its national anthem for you.

The bottom line is that here is a medium people are getting excited about. And yet….

The marketers who seem to understand this medium and choose to take advantage of it are still extraordinarily rare.

Early adaptor

Last month, I described the case of one such ‘early adaptor,’ the Canadian branch of Searle Pharmaceuticals.

Drug companies are frequently leaders in the marketing arena, and Merck in the u.s. is now issuing its Physicians’ Quarterly Reference Journal on cd-rom.

To help its salesforce demonstrate it, it bought 3,000 Sony TIX-100 portable mmcd (multimedia cd) players.

These come with a monochrome liquid crystal display (lcd) screen, but have a video output, so they can be plugged into an ordinary tv set, for a much better picture.

For them, it almost seems self-evident to take advantage of a new medium whose strong suit is the ability to store huge amounts of information and make it instantly accessible.

Surely, there must be somebody besides the drug companies, and in the case of the November issue of Nautilus, the car companies, who have products to market that are information-intensive, and can benefit from a multimedia presentation, with sound effects, music, narration, color pictures, animation, video and text.

Well, there are. For starters, how about the real estate industry? We will review an example in next month’s column.

And how about direct marketing? There is an exciting field trial in the u.s. of multimedia/ interactive catalogue shopping through cd-rom.

Next issue, we will check in on preliminary results as we continue to explore what the future holds for marketers in this strange new world of multimedia and interactive communications

Charles de Gruchy is President of Salter de Gruchy, a Toronto and  New York based direct marketing agency