The Internet has allowed consumers to trade stocks without using high-priced brokers and let travelers book flights directly from airlines.
Now it may free advertisers to make their own television commercials without going through a traditional ad agency.
Several companies are offering automated ad creation over the Internet and, in some cases, ad placement services that all advertisers can use to more finely direct their marketing. Advertisers use the new sites to select from commercial footage and customize campaigns with a few clicks of the mouse and little human interaction, often for a low flat fee.
"When people say, `you're commoditizing creative,' well, sure we are," said Jordan Zimmerman, chairman of Zimmerman Advertising in Fort Lauderdale, Florida, who calls the automated service "a virtual advertising agency."
"But we're really doing it with excellent work," he added.
The new systems threaten some of the roles that advertising agencies have traditionally played.
National advertisers, mainly in the retail, real estate and auto industries, are using the systems to make their messages more relevant on the local level.
They can automatically add names of local sales agents or dealership addresses and they can change the content of the ad, depending on where it is showing, to appeal to various demographic groups.
Among the companies that have used these services are Wendy's, Ford, Coldwell Banker and Warner Independent Pictures.
Zimmerman, an advertising agency that is part of the Omnicom Group, is selling stock advertising and online buying for TV, the Internet, print publications, radio, direct mail and in-store ads.
The automated system they are offering to advertisers, called Pick-n-Click, is currently available only for automotive advertisers and has 150,000 components such as voice-overs, video footage and text options. AutoNation, a franchise group of 331 car dealers, has signed on as a customer.
Expansion Planned
Zimmerman plans to expand the site's ad offerings to other retail areas like home furnishings within the next few months.
Visible World, based in New York, introduced a product this week that allows national advertisers to create thousands of custom versions of TV commercials. The company also plans to add online and mobile video ads to its system soon.
And Spot Runner, an online ad agency based in Los Angeles that has been offering to make local TV commercials for US$499, plans to branch into automated radio and Internet ad development later this year.
Interest in these systems is being driven, in part, by the increased use of customization in traditional media like TV. For decades, consumers all received the same message when they turned on a TV or opened a newspaper.
The Internet began chipping away at the mass messaging model and advertisers are now increasingly interested in taking what they have learned in the online world about custom marketing and applying it in the off-line world.
"If there's a man and a woman watching television in two different houses and you are Procter and Gamble, it would be more efficient to show one of them an ad for a Gillette's men's razor and the other a woman's ad," said Mark Read, director of strategy at the WPP Group, an advertising holding company that has invested in Visible World and Spot Runner.
"In the scenario when you run the woman's ad in both houses, you've got half the efficiency," he said.
To customize ads, the companies, to a varying degree, link ZIP codes with census and other third-party data to develop local demographic profiles, isolating viewers more finely than typical cable operators.
Visible World has an extensive system in place, running a national distribution network through media partners and using the partners' routers to steer versions of ads to different parties. Visible World works at the household level by using information from cable set-top boxes.
The result is that Visible World can automatically run ads in Spanish when its databases determine that is appropriate or can send more youth-focused ads where younger people are likely to be watching.
Another company, OpenTV, a part of the Kudelski Group, a digital security company based in Switzerland, is delivering multiple versions of ads to cable set-top boxes in partnership with a cable operator and uses viewer data to decide which ad to show.
Invidi Technologies, a company based in Princeton, New Jersey, has developed an ad system that uses remote-control behavior and other viewer actions to guess which member of a given household is tuned in.
In addition to tailoring ads to consumers, the new systems allow advertisers to modify their ads at the last minute by logging in online.
"You find out at 10pm, your competitor is running an intense sale on something," said Michael Goldberg, chief marketing officer for Zimmerman. "You can go into your arsenal of work and select something to combat that and program it to run the next day. All in five minutes."
The Web interfaces eliminate the need for advertisers to call or meet with ad agencies to fashion or tinker with their ads.
But humans are not entirely removed from the process -- they are still involved in shooting the footage for the campaign options online and managing the new sites, among other tasks. Pick-n-Click has a national network of camera operators who shoot advertisers' storefronts when prompted by the click of a mouse.
Spot Runner began offering its online ads a year ago and since then has signed on several national clients that use its services to customize local ads.
Last year, Warner helped Spot Runner develop a database of about 350 movie theaters by location and used those listings in ads for its movie The Painted Veil in December. At the end of each movie trailer, instead of referring people to newspapers for local theater listings, the commercial named the nearest theater showing the movie.
Knowledge counts
"The fact that you can actually have somebody know where your theater is is a big deal," said Polly Cohen, president of Warner Independent Pictures.
Spot Runner also creates libraries of commercials for Coldwell Banker, Century 21 and other national real estate companies so that sales agents can use them on local cable networks. Spot Runner's system allows agents to customize commercials with their names, pictures and logos.
Spot Runner and Pick-n-Click both provide media planning and ad placement services for advertisers, negotiating ad prices and air times. Spot Runner uses proprietary programming to suggest a media plan automatically based on the advertiser's budget, location and other details. Pick-n-Click for now relies on the human media planners at Zimmerman Advertising.
Read said it was inevitable that media planning and buying would become more automated in the next several years.
"You're going to have so many versions of ads and you're going to have so many media decisions to make with the fragmentation of the media," Read said. "How is a human going to be able to process that amount of information?"
While Spot Runner typically works with advertisers directly, Visible World, whose clients include Subaru, Wendy's, Comcast, Ford Motor, 1-800-Flowers and MTV Networks, often works with the ad agencies that represent advertisers and presents itself as a neutral technology company rather than an ad agency.
Visible World says its systems give ad agencies much more control over advertiser messages.
In December, for example, Visible World changed ads on the spot for Wendy's to reflect what had just occurred in National Football League games. When there was a touchdown, Wendy's raccoon characters talked about it, and when the game was slow-moving, the raccoons called the game boring.
Visible World had a person watching the NFL games in each region to input what happened, triggering its computer systems to insert appropriate lines of dialogue during each commercial.
Last fall, Visible World monitored the temperature in various cities, then ran Wendy's commercials for either a Frosty drink or chili depending on the weather.
Some advertisement executives said computerized systems could not replace all of the functions of media planning.
"Systems like this do not strategically tie together a multimedia campaign for a client," said Scott Neslund, managing director of the Chicago office of MindShare North America, a WPP Group media planning agency.
Key Responsibility
Tracking whether ads ran when they were scheduled and whether the promised number of viewers actually tuned in is a key responsibility of media planning agencies.
Advertisers want to know that their money was well spent, Neslund said. When there are not enough viewers, media buyers call the TV networks to negotiate a better deal.
But the companies offering the new systems said they could be good for TV networks, which are under pressure to demonstrate that consumers are watching commercials rather than fast-forwarding or leaving the room.
Custom ads might help keep consumers tuned in during the commercials.
"If in fact you are able to make commercials more engaging through targeting, then the networks' inventory becomes more valuable," said Tara Walpert, president of Visible World.
Ad executives said they expect customization to become more and more finely sliced.
"We're moving into a world of molecular marketing," said Bant Breen, director of strategic development and innovation for the Interpublic Group, an advertising holding company that is a Spot Runner investor.
"This is an opportunity for creatives to do what they've always wanted to do, which is to speak in a more powerful way to each and every consumer," he said.
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