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Turning virtual product placement into real profits:
How to score returns of 50% to 100% with this year’s Super Bowl winners
by Bryan Bottarelli
If you watched the Super Bowl on January 28, I hope you noticed something specific... very specific. And I’m not talking about the boy-bands performing at halftime.
I’m talking about stadium advertisements that are perfectly clear... and perfectly crisp. They are so crystal clear, they almost look too good to be true. And for good reason:
 Because they are!
A revolution in advertising was launched into the national spotlight during the Super Bowl. And better yet, the stock of the company that is responsible for the new revolution is set to pop, especially after the nation got a peek at their innovative advertising technology. In fact, this company’s stock could jump 50% in one single month, and double over the course of this year!
Maybe you’ve seen it already.
Are you familiar with the "first down line"? It’s that yellow stripe superimposed across the playing field that helps TV viewers follow the game (see image).
As innovative as the first down line is, that is only the beginning. During the Super Bowl, you couldn’t help but notice the Eye Vision technology used by CBS. Eye Vision is a rotating camera system (similar to the one that created the special effects used in The Matrix) that allows TV viewers to see a paused — and 180-degree rotated — camera shot during live sports broadcasts.
But if you are a little more perceptive, maybe you’ve noticed other subtleties: Like a glowing Pepsi sign behind home plate during ESPN’s Sunday Night Baseball, or a hanging Nordstrom banner at the Grammy Awards (that seems to block the view of everyone sitting in the balcony).
But here is the cool part. If you were actually at the Grammies, you would not have seen a Nordstrom banner... or had your view blocked by it hanging down in your face. Because that banner wasn’t actually there!
The "banner" came from a nondescript white van parked outside the award show. And the two technicians in that van are responsible for inserting paid virtual advertisements into live TV broadcasts.
Men in white
The company behind the white van is Princeton Video Image, Inc. (PVII:NASDAQ). For ten years, they have quietly been developing their L-VIS virtual advertisement insertion products. And the reason they’re doing it so quietly is threefold:
First, advertisers need a new way to reach people. And Princeton Video knows that advertisers are getting desperate for new ideas. Take today’s esoteric commercials, for example, those where you have no idea what the product was, even after you’ve seen them a dozen times.
Apart from the Super Bowl (where people actually want to see the commercials), fewer and fewer people are watching TV ads. Yet, for the spring 2000 TV season, ad rates at most major networks increased 20%. Higher costs with less exposure is not a winning combination for advertisers. And PVII knows it.
Secondly, PVII thinks that live TV insertion is only the beginning of their virtual advertising game plan. Consider their next move:
Say you’re watching a rerun of Seinfeld. Jerry walks into his apartment, and there is a Pepsi can sitting on his counter. But your friend who is watching the same rerun on the West Coast sees a Coke can.
In reality, neither can was there in the original episode. PVII inserted them as a paid virtual ad. Princeton Video is targeting sitcoms and dramas for insertion of everything from shampoo bottles to coffee mugs into demographically specified markets. And each ad will be a one-time deal. So the next time you see Jerry, he might have a virtual cup of Starbucks coffee on his table!
Finally, Princeton Video Image does not want any other advertiser to steal this new market, because it’s huge. By 2005, the virtual advertising and product placement market is projected reach US$2.1 billion!
Consider the numbers
Look at the following graphs — each showing PVII’s share of the virtual advertising and product placement market, compared to the potential worldwide market (in millions).
This small company has a lot of room to grow. Sure, other companies can insert the yellow football line on the field, but nobody else has patented L-VIS virtual insertion technology. And their patented technology is what gives PVII more explosive potential than the other companies pioneering new forms of TV advertising, like OpenTV and Liberate Technologies.
Currently, Princeton Video holds six U.S. patents and four European patents. They will realize a percentage of all the ad revenues generated using their technology from deep-pocketed networks like CBS, FOX, NBC, and ABC. But that’s not all.
Last year, Princeton Video Image announced the addition of several advertisers with strong financial positions who have signed on to use the technology. Coca-Cola, General Motors, Eastman Kodak, Nissan Motors, MasterCard, Toyota, and Charles Schwab are just some of the names.
Princeton Video has yet to make a profit. But starting this year, I think they will begin to grow earnings more rapidly than ever before. With the backing of deep-pocketed advertising budgets, and the Super Bowl as an opportunity to gain national exposure, PVII’s stock is set to jump 100% by the end of 2001.
As a speculative play on the future of advertising, buy Princeton Video Image (PVII:NASDAQ) under US$5 a share.
For more information, contact: Princeton Video Image, Inc., 15 Princess Road, Lawrenceville, NJ 08648, tel. 609-912-9400, fax 609-912-0044, IR website, email: rrosser@pvimage.com.
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