SBD/21/Sponsorships Advertising Marketing

VIDEO INSERTION: VIRTUAL ADS NEARING REALITY?

     Princeton Electronic Billboards (PEB) of Princeton, NJ, has
pioneered the concept of video insertion technology -- inserting
ads into the backgrounds of television broadcasts. While these
ads are clear to viewers, they cannot be seen by fans at the
site.  Comcast Cable, which produces Double-A Trenton Thunder
games, is the only broadcaster currently using the system.
However, PEB recently tested the system during a Marlins/Sunshine
Network telecast, and is in negotiations with several teams and
broadcasters.  THE SPORTS BUSINESS DAILY spoke with PEB Dir of
Marketing Sam McCleery about the state of the technology, the
progress PEB has had selling the system and challenges the
company faces.      TECHNOLOGY:  The video insertion system
places video material into a live broadcast in real-time by
memorizing features in a scene and placing images on that area.
Players and objects pass in front of the image as if it was a
permanent fixture.  The images are brought to life by a machine
that takes a live feed from a broadcast and inserts the image.
McCleery says that unlike "burn-ins," or superimposed
advertising, the video insertion system does not place any
limitations on broadcast production -- camera angles are not
compromised with the fear that a burn-in will cover a player's
face or part of the action.  The PEB machine is described as the
"size of three VCR's stacked" on top of each other.  However,
fans won't see an electronic billboard on their favorite NFL QB
anytime soon -- the technology is limited to non-moving objects.
     ADVANTAGES:  One of the greatest advantages of the system,
according to McCleery, is the ability to localize or regionalize
advertising.  Through the system, advertisers may purchase time
on an electronic billboard for specific audiences.  If GM buys
time on a national baseball broadcast behind home plate, the
video insertion system allows GM and the broadcaster to send
different messages to different regions.  For example, a
Chevrolet Trucks ad could appear in Dallas, with a local dealer
while a local Buick ad may appear in Detroit.  McCleery:  "It's
intended to add value ... you can derive or generate more revenue
out of that space because you are allowing many different
advertisers to access the same space at the same time."
     CHALLENGES:  The system has only been used four times, two
tests in Trenton, one test in Florida and once using real ads for
Comcast.  Marlins VP/Broadcasting Dean Jordan told THE DAILY that
while the team did test the system, "there are a lot of bugs to
be worked out" and the team has no immediate plans to employ the
technology.  Jordan said issues such as cost, league rules and
copyrights need to be worked out before it can be used in MLB.
     WHAT ABOUT JOE FAN?  Fan reaction has yet to be fully
gauged.  Ed Pardini of Comcast told THE DAILY that fan and
advertiser reaction was generally positive for the one Trenton
broadcast.  Pardini estimates that a video insertion ad for one-
half inning costs around 1.5 times what a one 30-second ad costs
on Comcast.  Comcast plans on using the technology in Thunder
games for the rest of the season.  Pardini: "This is a way that
program producers can increase their advertising revenues without
making the broadcast look as though it is jam-packed with
commercials."
     THE FUTURE:  McCleery said his system has the potential to
make games more enjoyable for viewers both at home and at the
stadium.  McCleery: "It has the advantage of possibly shortening
the games.  Less [TV] advertising can cut the game time down and
keep the revenue the same.  Also, because it's only seen by the
viewing audience, you can keep areas of the stadium, the tennis
court and so forth, signage-free."  Dean Jordan of the Marlins,
on the possible impact of the system on the marketplace:  "This
has the potential to be a big one" (THE DAILY).
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