Now You See It Virtual ads are the next frontier in TV sports

Aug. 24, 1998
Aug. 24, 1998

Table of Contents
Aug. 24, 1998

Now You See It Virtual ads are the next frontier in TV sports

If sports television ratings haven't kept up with escalating ad
prices, how do networks expect advertisers to foot the bill for
commercials? It's a riddle worthy of the Sphinx--particularly
since various networks ponied up $17.6 billion for NFL rights
over the next eight seasons and Disney recently offered $600
million to air hockey games over the next five years, and all of
them will need advertisers to defray those costs. An answer, at
least a partial one, lies in virtual advertising: a technology
that superimposes ads, visible only to television audiences,
onto stadium fences, goalposts and playing fields.

This is an article from the Aug. 24, 1998 issue

During the Brickyard 400 auto race in early August, for
instance, viewers in their living rooms saw logos of products
such as Pennzoil and Miller beer apparently emblazoned on the
infield. In truth, the images were computer-generated, and fans
in the stands saw green grass where TV viewers saw the ads.

"We're seeing a new application every weekend," says Sam
McCleery, vice president of marketing and sales for Princeton
Video Image (PVI), a company that has produced virtual ads for
such clients as ESPN and the Chicago Bears. "With virtual ads,
the networks or the teams that own the broadcast copyrights can
reap the benefits," says Neal Pilson, former president of CBS
Sports and now a consultant whose clients include Scidel, a
rival of PVI's. "It's a great way to create an integrated
marketing package, so television can say to the sponsor, 'We're
raising the rates for commercials, but we'll offer you virtual
ads too.'"

Perhaps the biggest attraction of virtual advertising, however,
is that it is zapper-proof. The 30-second commercial has become
less effective as viewers have become more prone to changing the
channel during breaks in the action. A virtual
advertisement--which usually stays in place for half an inning
in baseball and often costs the same amount as a 30-second
spot--remains on the screen during the game's prime moments, so
the maximum number of viewers notice it. What's more, studies
have shown that an on-field sign is more than twice as likely to
be recalled as a 30-second spot.

Not that virtual advertising comes free of caveats. What
happens, for example, when a team sells sponsorship and signage
from company A, yet the television networks sell a virtual ad to
its competitor? Largely because of potential conflicts of
interest, virtual ads have already been banned from the 2000
Summer Olympics. The NBA, NFL and NHL have yet to accept them
during regular-season telecasts. But that's really no problem,
says Pilson. "Just put a clause in the contract so that there's
no confusion."

A deeper concern is that virtual advertising represents an
unprecedented level of commercial intrusion. Are we nearing the
point where the WWF fan, enraged that the wrestling mat is
festooned with a corporate logo, will revolt against watching
the event or endorsing the sponsor? "As long as virtual
advertising is tastefully done and not a distraction, I don't
think so," says McCleery. "I think fans have been very
understanding." That will be less so, undoubtedly, the first
time a close play at the plate or a game-winning field goal is
obscured by a virtual ad.

Perhaps the biggest attraction of virtual advertising is that it
is zapper-proof.