The average number of discs bundled with OEM hardware has exploded from four to more than 10 CDs per computer) — corporate America hasn’t really caught on to the blazing potential of the technique. But all that is about to change, mostly because of the exciting abilities of hybrid disc technology to marry CDs with cyberspace.
“Although the Internet has basically taken over the dialogue about e-marketing, CDs still have a very powerful role to play,” argues Rettie, “especially with their ability to deliver heavy graphics. And with CDs, the marketer finds the customer, rather than the customer having to find the marketer on the Internet.”
Among the most aggressive users of CD-ROMs as marketing tools in the near-term will be publishers, who are making deals with disc technology companies on both coasts.
“We’ve trademarked a product called MAG-CD and we’re talking to magazines and their advertisers about it,” says Steve Bulger, president of Clifton Park, NY-based Digital Marketing Technologies, which specializes in transferring video material to disc. “The products we’re discussing would include the magazine’s advertiser’s commercials on disc, direct links to advertiser websites on the disc, even information and entertainment on the disc as value-added product for readers. All of that on a disc inserted into the magazine. We’re now gearing up towards having our first discs on the market by the Christmas shopping season. “San Carlos, CA-based ImaginON, meanwhile, which owns and markets hybrid technology, calls the technique “sell onstream” CDs. Says president David Schwartz, “Times-Mirror is going to be using our technology to extend their advertising program. Golf magazine will be the first vehicle. Their advertisers will have the opportunity to put video in our format on a CD that is distributed to the magaz ine’s subscribers. It will be advertiser-supported. For example, there will be an interactive golf video in which viewers will be able to click online to a golf resort website, then asked to click on a room to see what it looks like, and so on. It’s one step past print. And our first one will be out this summer.”
In 1993, top executives of Union Transport met in Costa Rica to determine what they wanted the company’s future to look like. If a journalist interviewed them in the year 2000, they said, what would they tell the reporter were the success factors that made them one of the best in the shipping business?
The company, a competitor to other worldwide freight movers such as Flying Tigers, settled on a distinct brand difference: they were the most technologically innovative in their business. To show that, they would create a “glass pipeline,” making their system literally transparent, so that any of their 6,000 customers around the world could not only track their shipments, but follow the Union process every step of the way.
They called it U-TRAC. They talked about “glass performance.” It was a good concept, but marketing it with Union’s Internet site proved problematic. Customers could access U-TRAC with a password. But what about prospects? How could they get the “glass performance” message, since they would not have password-access to the Union process?
The answer, ironically, came not from the marketing department but from the marketing department but from Information Technology. They recommended producing a CD-ROM to accompany Union salespeople.
“We weren’t convinced that it would work but the IT people said they were so convinced that a CD would reduce their workload that they were willing to fund half of it,” recalls Gene Ochi, Union senior vice president/worldwide marketing. “We first committed to an initial batch of 10,000, but that was a guess in the wind. We really didn’t know how much acceptance there would be.”
It didn’t take long to find out. Ochi was amazed at how well the CD worked as a marketing tool.
“It’s unbelievable how useful it’s become,” he says. “We used the CD at trade shows and people grabbed them up like crazy. We used them in several direct mail campaigns, but primarily where we found the biggest impact was with direct sales calls. We used to have a company video, but our sales people don’t even want it anymore, they just want the CD.”
There are multiple reasons for the success of the Union CD-ROM, Ochi believes. Live demos in front of customers using the company’s website could be tricky due to slow download times, the threat of a modem going down, and so on. With the CD, a technology most of Union’s customers were more familiar with than the Internet, customers could tour U-TRAC at their leisure and salespeople could follow a prospect s interest with the CD far more effectively.
“The sales people feel the CD is a much more powerful marketing tool than our printed material,” says Ochi. “It makes the presentation more interesting for our customers and it’s easier to move around to areas that the customer wants to talk about. Plus, in our industry, the tiebreaker between us and our rivals is technological superiority, and our CD is the perfect instrument for us to demonstrate that advantage.”
The other big advantage to the CD was economic. “A lot of the work on it was done inside the company,” Ochi explains, “and outsourcing was mostly limited to a designer and producer, who were very reasonable. I’d say including publishing our budget was in the $10,000-15,000 range. But you could do one for well under $10,000, depending on how elaborate you wanted the CD to be, how many bells and whistles you want graphically, how many voiceovers, that kind of thing.”
Union Transport is currently designing its second CD, and Ochi says the technique has paid off handsomely for his company, with some caveats for business-to-business applications.
“You’ve got to use it in support of a sales process,” he concludes. “People only want to talk about what they’re interested in. That transfers to technology; you need interactivity, the ability to jump in and out. With a CD, the customers can do it themselves.”
For a quarter-century, Trashy Lingerie has helped liven up couples’ lives. The famous (and frilly) Hollywood lingerie retailer smoothly entered modern times with trashy.com, its virtual store on the Internet. Business was good, both on the Boulevard and in cyberspace. Then David Schwartz, ceo and chairman of ImaginON, called from Northern California with an intriguing proposition.
What Schwartz proposed was a Trashy Lingerie CD-ROM using “hybrid” technology, meaning the CD would connect viewers directly to trashy.com. The technology is brand new, and Schwartz was looking for a very active e-commerce website that sold something difficult to portray with just a picture. Something sexy but clean he could use to draw attention to the marketing potential of this exciting new approach to CD-ROM. Trashy Lingerie fit the bill, but the company’s savvy owners were skeptical. They had explored “streaming video,” or moving images on the Web, and it hadn’t been smooth or high-quality. Pictures of their lingerie was better in cyberspace, they believed.
They told me that they couldn’t stream video from our servers,” Schwartz recalls. “I explained that they could if they took a hybrid approach and combined the Internet browser and disc-based video. It isn’t an easy concept to grasp technically. But they were open-minded enough to invite me to come show them the next time I was in Hollywood.”
Schwartz made a point of visiting Southern California as soon as he could, and explained hybrid CD as a marketing tool in person at the store. He took out his laptop, used it to install Pentium PC-hardware on the Trashy PC and showed a hybrid video selling World cities 2000’s San Francisco travel website. The trick of course, is to appear seamless, so that the viewer discerns no difference whatsoever between the CD and the website. “Very intuitive,” says Schwartz. “No navigating, no typing. You don’t need to know how a browser works. You just click a Play button. They thought it was streaming video and I explained that it really wasn’t. The video they were seeing wasn’t coming from a website. That’s the trick, to make the level of integration high enough so nobody knows the video isn’t coming from the Web.”
To Trashy Lingerie’s sophisticated marketers, that was what they needed to know. “It sounded like a different angle of marketing,” says Trashy executive director Mary Loomis.
The retailer commissioned a CD-ROM which will be distributed in late 1999. The Trashy disc features full-motion sound and video of models wearing its lingerie in various settings and provides links to trashy.com as well. Users can click on a specific model and see a range of Trashy lingerie.
It’s a powerful marketing tool, and David Schwartz knows more than most about marketing with CDs. He was formerly vice president of new media systems at Atari Corporation.
“The question at Atari was what else could we do besides bonking ground hogs on the head or blowing things up,” he says. “What else could you do on a CD that would be compelling and fun to watch?” My response was streaming television. We spent millions of dollars and over two years developing the earliest version. Then I bought the technology and started ImaginON.”
Now that search for the next step beyond bashing ground hogs is turning into a hot new marketing tool. Schwartz says acceptance depends on experience.
“People don’t get it unless they’re in front of people and can see it. When you put it in a PC and boot it up, they get it, like Trashy Lingerie did. We have lots of projects in process, including some with Fortune 500 companies. And they’re all based on people having seen the Trashy demo.”
BOSLEY MEDICAL GROUP
Like many other marketers, Joe Sewald, vice president of marketing for Bosley Medical Group, first heard about the power of marketing with CD-ROM because someone came to him with the concept. Steve Bulger, president of Digital Marketing Technologies in Clifton Park, NY, called up Sewald, whose Beverly Hills, CA-based company is one of the leading companies in the hair replacement industry.
Within two minutes of seeing the Digital Marketing video presentation on computer, Sewald said, “Let’s do it.”
Digital Marketing transfers video presentations off VHS tapes to CD or DVD-ROMs. Using “hybrid” technology, the discs include direct links to specific website locations. Like other marketers, Bosley was interested in the CD’s ability to overcome the Internet’s inherent marketing limitations, including high-quality graphics and convenience of use.
Bosley does a significant amount of advertising in magazines and through television commercials and infomercials, but one of its key marketing tools is a 25-minute video presentation sent out at no charge to anyone who requests it. The VHS contains a variety of information, including testimonial interviews with both doctors and clients. Typically, thousands of tapes are mailed each month all over the world. The Bosley CD included all the VHS material plus additional text and graphics information from the Bosley brochures, and a direct link to the Bosley website.
Economics played a role in the decision. Each disc cost less than one dollar, a 25-percent savings off the cost of producing a tape. Even greater savings were achieved because of the smaller size and weight of the CD-ROM packaging, which reduced postage rates. In fact, the total direct savings realized by Bosley’s switch from tape to disc came very close to paying for the total cost of the CD-ROMs.
“It’s so hard to get your target market to your website,” says Bulger about the Bosley decision to market with CD-ROM. “Search engines are a frustrating method, and most corporate problems with the Web as a marketing tool stems from that limitation. The CD combines the best of both worlds, delivering video quality the Internet cannot provide but offering the focused, target-marketing approach the website offers. Bosley liked the idea that their customers don’t have to dig up a VCR to watch their video. Their customers, obviously, often want their privacy, and with the CD they can watch in their office or at home on a computer screen.”
The hybrid advantage also appealed to Bosley, Bulger concludes. “Upon watching the CD presentation, now their potential customers can click a button on the bottom of the screen and go right to the Bosley website. That way, they can get the most current information, and they can capture names and addresses of the CD viewers for follow-up.”
How excited is Bosley about the use of CD-ROM as a marketing tool? So excited that it decided to produce an entirely new infomercial to put on the disc, which will be distributed in the third quarter of 1999.