Princeton Video Champions Virtual Ads

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Seeing is believing is a cliché that no longer applies in the world of advertising-and soon perhaps in programming, as well.

That's due primarily to the efforts of Princeton Video Image Inc., which, in the past five years, has made the concept of "virtual advertising" increasingly acceptable.

New Jersey-based PVI will exhibit its wares at the upcoming National Show and National Association of Television Programming Executives gathering, among other conventions.

PVI CEO Dennis Wilkinson, whose resume includes stints as a marketing executive at PrimeStar Inc. and Home Box Office, called PVI's February contract with ESPN "a milestone agreement." Under the deal, PVI will create and insert virtual ads in at least 20 of the network's Major League Baseball Sunday-night games.

Virtual ads will be seen in more national games this year than ever before, he said.

Clients taking advantage of the virtual ads include AT & T Corp., MasterCard International and Oracle Corp.

In addition, PVI has deals with teams like the Philadelphia Phillies and San Diego Padres for home-game telecasts.

Due to those and other contracts, Wilkinson said, "Virtual advertising, after a long, hard, business-building process, is starting to find a place."

In baseball, he pointed out, the most common location for virtual images-mostly logos-is on the wall behind home plate. These images appear to be part of the live stadium scene until those instances when the image-like gasoline marketer Unocal Corp.'s "76" logo-is animated to display pitching speed.

Under other deals signed in March, PVI will handle virtual ads for the Indy Racing League's auto-racing telecasts on ESPN and ABC (including the Indianapolis 500 in May) and for Jack Nicklaus Productions, which produces 50 golf tournaments for ABC Inc., CBS Corp., Fox Broadcasting Co. and ESPN.

IRL has already booked Northern Light Technology Inc.'s NorthernLight.com for virtual ads in the auto races.

Virtual advertising is also being inserted into other sports and nonsports fare, ranging from CBS' National Football League coverage to that network's The Early Show.

This is occurring despite the New Year's Eve flap, in which CBS News, reporting on the festivities in Manhattan's Times Square, used PVI technology to insert the "CBS Eye" over the "Peacock" logo on NBC's Times Square Jumbotron screen.

CBS Evening News anchor Dan Rather told The New York Times it was a mistake on CBS' part, but CBS president Leslie Moonves defended the move.

"It was our technology," Wilkinson said. "They made the decision, and we executed for them."

Besides ads, PVI inserts other virtual graphics into CBS NFL telecasts, such as yellow first-down lines.

Nor is virtual advertising limited to the United States. During the international feed of the last Super Bowl, PVI inserted images for clients ranging from Charles Schwab & Co. Inc. to General Motors Corp. during Global Television Network Inc.'s Canadian coverage.

About 75 percent of the time, PVI is not directly involved in the actual selling of the advertising, Wilkinson said. ESPN sells the virtual ads on its baseball coverage, and the IRL sells ads on its auto-racing telecasts.

Does PVI get a share of those virtual-ad dollars? "It really depends on the deal we have," Wilkinson said. In some cases, PVI gets only a straight fee.

These ads, moreover, are not sold in 30-second units like typical commercials. In ESPN's MLB games, for example, "They sell a half-inning of exposure," which can run from two to five minutes, he added.

For the NFL games, the advertising usually is sold by the half, while the ads in auto races may run for one-half or one-quarter of the race, and they can be seen only when the camera pans past the same fixed position.

PART OF THE ACTION

The idea is that the viewers will think these virtual images are part of the action, and not foreign objects imposed on it.

PVI or whomever is selling the time abides by the restrictions imposed by the individual event's sponsor contracts, Wilkinson said, adding, "We're not into ambush marketing." Therefore, if a network, stadium or league sponsor sells a category exclusively, no other competing marketer would be able to insert its logo in that telecast, he said.

The PVI CEO wouldn't get into specific rates for virtual ads, saying only, "They're all over the lot-all predicated on [estimated] viewership," in much the same way network or station ad rates are.

What does the future hold for virtual ads? Wilkinson predicted that nonsports categories-chiefly entertainment programming-represent a major opportunity in terms of virtual logo or product placements.

Among variety specials, he cited MTV: Music Television's recent Ball2K event, during which PepsiCo Inc.'s Pepsi-Cola's "Joy of Cola" slogan was inserted virtually into the background, and CBS' Grammy Awards, where Harrah's Entertainment Inc.'s and Nordstrom Inc.'s names were inserted into preshow crowd scenes.

Wilkinson said company that's used insertions in series programming is Colgate-Palmolive Co. which has been using virtual logos and product placements for two years in Televisa S.A. novelas set in Mexico City.

The company could customize such placements, inserting different brands each time a program is aired or varying them by geographic region.

Since PVI has been pursuing this opportunity in the United States for only about four months, Wilkinson said he did not expect anything to appear on the air until perhaps this upcoming fall TV season.

PVI recently did a virtual Microsoft Corp. logo within an NBC Frasier episode, but Wilkinson said that was a test that has not aired.

Network sitcoms usually feature beer and other products with generic labels, rather than famous brand names. So PVI's entry into product placement "will offer advertisers an opportunity to associate with a popular show in an efficient manner," Wilkinson said.

PVI could also enable marketers to do product or logo placements within made-for-TV or theatrical movies that air on TV or cable. For instance, such images could be inserted on a wall or billboard seen in a movie's background.

"But in no case would we go forward without permission" from the distributor or owner of the rights to such movies, he added.

INTERACTIVE TV, WEB

Looking ahead, he said, interactive television and Internet video streaming also offer opportunities for PVI's virtual insertions. "We could place virtual advertising and [have consumers] interact with that and even purchase a product via e-commerce," he said.

PVI also could customize a particular virtual ad for a specific household, he said. In a TV household tuned to a baseball game, he explained, a Domino's Pizza LLC logo could be virtually inserted, and those viewers could click on that logo to order a pizza. Meanwhile, other households would see a virtual ad for a car, he noted.

With the advent of TiVo Inc. and ReplayTV Inc., Wilkinson predicted "more zapping through commercials." But he maintained that PVI could help marketers to get around that by allowing them to "be part of the content."

Although PVI is the leader in virtual advertising, it's not alone in this field.

Orad High-Tec Systems' IMadGINE division is another such company. Earlier this year, it said, The Sports Network in Canada was using its system for Canadian Football League games and other coverage.

Last December, IMadGINE inserted advertisers' logos at each end of the court during two Raycom Sports college-basketball tournaments-the Food Lion MVP Classic and the BB & T Classic.

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