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DATE DUE DATE DUE DATE DUE 1

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June 3, [7‘72

 

 

 

 

 

 

 

 

 

 

 

 

 

MSU Is An Affirmuivo Action/Equal Opportunity Institution
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{THE ADVERTISER'S PLACE IN
{THE EVOLUTION OF VIDEOTEX

BY

rdark Christopher Lockhart

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

Department of Advertising

1983

Copyright by
MARK CHRI STOPHER LOCKHART

1983

 

ABSTRACT

THE ADVERTISER'S PLACE IN

THE EVOLUTION OF VIDEOTEX

BY

Mark Christopher Lockhart

To date, most of the literature covering the field of
videotex has not been comprehensive work. In addition, very
little has been written about the place advertising will
take in the introduction of this new technology. The thesis
objective was to put together a review of the present
situation surrounding videotex, including a look at the
technology, the services, legal issues advertisers must face
and where advertising will fit into videotex. Also, a mail
survey, sent to 99 advertisers with videotex experience, was
conducted to uncover the objectives, goals, strategies and

plans advertisers have used with videotex. Basically,

 

 

 

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advertisers were experimenting with different approaches to

Videotex advertising, but increasing product awareness,

product knowl edge

and sales were the main goals.
advertisers were primarily interested in two things: seeing
videotex gain at least a penetration level greater than
twenty percent and proof that users will access a system

frequently.

ACKNOWLEDGMENTS

I wish to thank my committee members for their help and
patience over the past year. My gratitude to Martin Block,
Keith Adler, and especially to Rick Ducey, who opened his
files and freely gave me his time whenever I was in need. I
want to note the contributions of Rob Rynski, who prepared
the graphics found within the thesis, and of Bill Waites,

Vice Chairman at Stone & Adler, who critiqued the thesis

survey.

Credit must also go to the many individuals who
provided me with invaluable literature on the subject of
videotex and to those individuals who took the time to
complete the survey. Without all of these people my thesis

would have never been worth completing.

Lastly: my heartfelt gratitude goes to my loving wife,
Sheryl, who spent many long hours herself pushing me and
critiquing my writing. Her patience with me was greatly

appreciated .

iii

TABLE OF CONTENTS

LIST OF TABLESOOOOOOOOO0.0.0..0.0.0.0.0...OOOOOOOOOOOOOOO

LIST OF FIGURESCOOOOOOOO0..OOOOOOOOOOOOOOOOOOOO0....0....

I.

II.

III.

INTRODUCTIONOOOOOOOOOOOI...OOOOOOOOOOOOOOOOOOOO .....
VIDEOTEX WOWYOCOOOOOOOOOOO00.0.00...0.0.000...

Teletext...........................................
Scrolling Teletext.............................
Overlay Teletext...............................
Boxing Teletext................................
Full-Channel Teletext..........................
Keypad Demanded Teletext.......................
Touch-Tone Teletext............................
Floppy Storage Teletext........................
The Future Market: Teletext...................

Viewdata...........................................
System Dependent/Keypad Accessed...............
System Dependent/Keyboard Accessed.............
System Independent/Keyboard Accessed...........
The Future Market: Viewdata...................

Videotex standards...00.00.000.000.0.0.0....0......
COding SChemeSOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

VideOtex syste. organization 0 O O O O O O O O O O O O O O O O O O O O O 0
Database Arrangement...........................

The communication Link I O O O O O O O O O I O O O O O O O O O O O O O 0

user Terminals...OOOOOOOOOOOOO...0.0.0.000...O.
VIDEOTEX SERVICES: WHAT WILL THE CONSUMER GET?.....

Trends in swietYOOOOO...0.00.0.0...OOOOOOOOOOOOOOO

iv

vi

ix

ll
12
13
14
15
16
17
18

21
24
25
26
27

30
36

46
54
63
69
72

72

The seniceSOOOOOOOOOOOOO0....OOOOOOOOOOOOOCOOOOOOO 79
Information Retrieval.......................... 81
Transactional serViceS O O O O O O O O O O O O O O O I O O O O O O O O O 86

Home Shopping 0 O O O O O O O O O I O O O O O O O O O I O O O O O O 87

Home Banking. 0 O O C O O O O O O O C O O O O O O O O O O O I O O O 93

Electronic Messaging.......................... 100

computing Via VideoteXo O O O O O O O O O C O O O O O O O O O O O O O 104
TelemonitoringOOOI...0.0.0.000...0.00.00.00.00 107

IV 0 PRIVACY AND CONSUMER PROTECTION O O O O O O O O O O I O O O O O O O O O l O 9
The Privacy Issue............. 0 O 0.... .00... O. .0. .0 110
consmr Protection. 0 O O O O O O O O O O O O O O O O O O O O O O C O O O O O O 120

V. SURVEY RESULTS: ADVERTISERS USING VIDEOTEX........ 124
The Results: Frequency Distributions............. 127

The Results: Two-Way Frequency Distributions..... 161

VI 0 SUM! AND CONCLUSIONS. 0 O O O O O O O I O O O I O O O O O O O O O O O O O O 195
APPmIXOOOOOOOOO0.0...0.0.0....OOOOOOOOOOOOOOOI00...... 203
BIBLIWRAPHYOOOOOOOOOO0.0.000000000000000000000000.0...O 209

LIST OF REFERENCES...OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO 213

LIST OF TABLES

 

TABLE PAGE
Table 1. Tests Respondents Were Involved In............ 128
Table 2. Videotex Services Offered by Advertiser....... 128
Table 3. Advertiser's Target Market Age................ 131
Table 4. Advertiser's Target Market Income............. 131
Table 5. Race of Advertiser's Target Market............ 132
Table 6. Profession of Advertiser's Target Market...... 132
Table 7. Advertiser's Target Market Education Level.... 133
Table 8. Life Cycle Stage of Advertiser's Target Market 133
Table 9. Sex of Target Market.......................... 134
Table 10. Martial Status of Target Market............... 134
Table 11. Location of Advertiser's Target Market........ 135
Table 12. Type of Image Portrayed on Videotex........... 135
Table 13. Most Attractive Feature of Videotex........... 137
Table 14. Goals of Videotex Advertising................. 139
Table 15. Strategies Used with Videotex Advertising..... 141
Table 16. Promotions Used in Tests...................... 143
Table 17. Communication Level Aimed For................. 143

vi

...

.-

 
 

Table 18. Control Over System Wanted by Advertiser...... 145
Table 19. System Improvements Wanted by IP. . . . . . ........ 147
'Tablja 20. Quantifiable Results Desired.................. 149
'Table 21. Advertiser's Involvement in Other New Media... 149
Table 22. Type of Product Advertised on Videotex........ 151
Table 23. Type of Advertiser............................ 151
Table 24. If Participation was Recommended by Agency.... 152
Table 25. Geographic Plans to Use Videotex.............. 152
Table 26. Number of Months Involved with Videotex....... 152
Table 27. Were Prices Shown in Advertising?............. 154
Table 28. Will Co-op Advertising be Used?............... 154
Table 29. Are Ads Similar to Other Media?............... 154
Table 30. Pricing Scheme Desired by Advertiser.......... 156
Table 31. CPM Price Range Desired....................... 156
Table 32. Per Frame Charge Desired...................... 157
Table 33. Percent of 1982 Budget Allocated to Videotex.. 157
Table 34. Percent of 1985 Budget Allocated to Videotex.. 159
Table 35. Percent of 1990 Budget Allocated to Videotex.. 159
Table 36. Penetration Level Desired by Advertiser....... 160
Table 37. Advertiser's Plans for Videotex............... 160
Table 38. Satisfaction of Agency Knowledge with Videotex 162
Table 39. Services Offered by Product Type.............. 164
Table 40. Geographic Plans by Product Type.............. 165
Table 41. Target Market Age by Product Type............. 167
Table 42. Target Market Income by Product Type.......... 168
Table 43. Target Market Profession by Product Type...... 169

Table 44. Target Market Education Level by Product Type. 170

vii

Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table

Table

45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.

61.

Target Market Location by Product Type........
Advertiser Strategies by Product Type.........
Image Portrayed by Product Type.......... .....
If Prices Were Shown by Product Type.... ......
Promotions Used by Product Type...............
Co-op Advertising (to be) Used by Product Type
Similar Advertising by Product Type...........
Communication Level by Product Type...........
Quantifiable Results by Product Type..........
Percent of 1982 Budget by Product Type........
Percent of 1985 Budget by Product Type........
Percent of 1990 Budget by Product Type........
Penetration Level by Product Type.............
Involvement in Other Media by Product Type....
Geographic Plans by Services Offered..........
Advertising Strategies by Services Offered....

Communication Level by Services Offered.......

viii

171

173

176

176

177

179

179

181

182

184

185

186

187

189

190

191

194

LIST OF FIGURES

 

FIGURE PAGE
FIGURE 1 . Continuum of Videotex Systems and Variables . . . . 8
FIGURE 2 . Representative Alphamosaic Screen and Grid. . . . . 38
FIGURE 3. Videotex System Structure...................... 53
FIGURE 4 . Numeric Indexing For Menu Search. . . . . . . . . . . . . . . 60
FIGURE 5 . Alphabetic Indexing For Menu Search. . . . . . . . . . . . 61

ix

 

 

Chapter I

INTRODUCTION

There is an anonymous saying that is appropriate for
the current state of videotex participation with regards to

0.8. corporations:

There are three types of companies. Those who make
things happen. Those who watch things happen. Those

who wonder what happened.

A few organizations are in the avant-garde of the emerging
videotex technology, meticulously searching for the keys to
unlock its acceptance and concurrent profits. Members of
this elite group include Sears Roebuck & Co., AT&T, Keycom
Electronic Publishing, Times-Mirror, Knight—Ridder and Cox
Cable: Communications. Many' other' organizations have also
invested a great deal of time and money into experimentation
of’ videotex: and related. data communication technologies.
Then, there are those organizations who are standing back
surveying ‘videotex's evolution, but. withholding from .any

involvement until the level of risk is significantly

 

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reduced. Lastly, there are those companies, the majority of
corporate America, which are naive to the existence of

videotex and who could suffer because of it.

The major problem that has limited the introduction of
videotex can best be described as a triangular
'chicken-or-the-egg“ syndrome. Hardware manufacturers want
an established mass market before they commit resources to
mass production and its resulting economies of scale and
lower unit prices. Meanwhile, potential consumers cannot
justify the high cost of equipment and services, especially
in light of their lack of knowledge about videotex, so few
have subscribed to available services. Consequently, the
advertisers who could help underwrite the cost of videotex
are wary about committing themselves to this new medium
which they consider technically inferior and suffering from
both an unidentifiable market and a lack of acceptance from

consumers 0

My hypothesis is that it will take the commitment of
advertisers, along with that of manufacturers and system
operators, to break the syndrome and begin the next
evolutionary step of full-scale introduction. However, I
believe that the commitment of most importance is that of
the advertisers. As with any other medium that relies on

reaching a large percentage of America, videotex will need

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the dollars advertising can generate to become cost
efficient for consumers. Therefore, the focal point of my
primary research was on uncovering the desires and needs of
advertisers who have experience with advertising on videotex
systems. My objective was to survey advertisers with

experience advertising on videotex systems and find out what

; they were trying to accomplish via videotex, at what costs,

and on what time schedule; then, come to some conclusions
which could benefit everyone involved in the technology of

videotex.

However, because little is known about videotex and the
path its evolution will take, it is important to keep an
open mind when reading this thesis. There are two reasons
for my pursuing the thesis: to discover the needs of
advertisers and to provide a review of the issues which
other people can use to gain a better overall perspective of
how videotex will evolve and what to expect from advertising
on videotex. It is hoped that someone will begin where this
thesis leaves off and pursue further the direction and form
advertising on videotex will take. Contained within the
structure of this thesis are chapters examining the current
state of videotex technology, consumer acceptance of various
services that can be provided, a brief look at key legal
issues advertisers should consider and a look at videotex

advertising.

One last point to be made is that videotex is only one
of the new electronic media technologies. While videotex
will not be the first new technology related medium to
diffuse through our society, it has the potential to create
the greatest change. However, to gain a complete
understanding of the changing world of media related
technology, it would be necessary to investigate
subscription television (STV), low-power television (LPTV),
satellite waster antenna service (SMATV), cable television
and cable's data communication potential, direct broadcast
satellites (DBS), Videocassettes and videodiscs, multi-point
distribution services (MDS), the diffusion of personal
computers, along with the impact these technologies have on
presently available media. It would also be helpful to
investigate the impact of advances in communication
technologies: fiber optics, data compression techniques and

switching networks.

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Chapter II
VIDEOTEX TECHNOLOGY

Videotex is the term used to describe the user
controlled one or two-way delivery of digitally encoded text
and graphic information from a database to subscribing
customers. Basically, there are three media over which
videotex information can be transmitted to its audience:
over-the-air broadcast signals (teletext), either fiber
optic or coaxial cable lines (cable text--not to be confused
with cabletext which is an alphanumeric scrolling news

service) and through either twisted pair or fiber optic

phone lines (thne text).

Teletext is a one—way transmission of information
delivered in the vertical blanking interval (VBI) of regular
over-the-air television broadcast signals. However, FM
radio frequencies, satellite or microwave transmissions and
cable are alternative media that can be used for delivery.
The teletext information is multiplexed into the VBI at the

broadcast's point of origination, and therefore, requires

5

users to possess a decoder to receive, extract and store the
various messages until called up to be viewed on the
screen. Due to the limited capacity of the VBI, only a
small number of information pages can be offered at one

time, and transmission speeds are relatively slow.

Cable text and phone text are better known as
viewdata§3 Viewdata is the two-way, fully interactive,
communication system which enables users to access a
potentially unlimited number of information pages and a wide
range of electronic services. Viewdata services include
information retrieval, transactional capabilities,
messaging, computing and telemonitoring, all of which
require a keyboard or numeric keypad to send request

commands for services to the database computer.

It is best to compare the various forms of videotex
along a continuum (Talarzyk and Widing, 1982) based on a

number of variables (Figure 1):

- frequency of updating necessary

number of services offered

- database and transmission capacity

- mode of transmission

speed of transmission

sophistication of services provided

system operator control versus user control

degree of behavior or life style change required

cost to user, system operator and information provider

degree of user sophistication required

degree of hardware and software sophistication

level of interaction

system configuration: type of database

searching technique required

standards used in display of information

billing procedures

 

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—--Frequent Updates ---------------------------- Limited Updates---
---Limited Pages/High Frequency ------- Many Pages/Low Frequency---
-—-Mass Audience ----------------------------- Targeted Audience--—
---Summary Information ----------------- Specialized Information---
---Little Behavior Change ---------------- Large Behavior Change---
---Low User Cost -------------------------------- High User Cost---
---Simple Search -------------------------------- Complex Search---
---|----| Teletext |----|----|---—|-—--|----| Viewdata |----|---—

Scrolling Boxing Keypad Floppy System System
Demanded Storage Dependent Independent

Keypad Smart
Overlay Full-Channel Terminal
Touch-Tone System Dependent

Dumb/Smart Terminal

FIGURE 1. Continuum of Videotex Systems and Variables

 

(Adapted from Wayne Talarzyk and Robert Widing's, ”Introduction
to and Issues with Videotex: Implications for Marketing," p. 6.)

Teletext

Teletext had its beginnings in 1976 with the
introduction of the Prestel system by the British Post
Office. The British Broadcasting Corporation (BBC) and the
Independent Broadcasting Authority (IBA) next developed
their respective Ceefax and Oracle teletext systems. Today,
many more teletext systems are in existence: AntiOpe,
Keyfax, Telidon, CBS's Extravision, NBC, National Captioning
Institute's closed-captioning, Dow Jones, Rueters and Time

Inc. to name a few.

Teletext will undoubtedly be the first of the videotex
technologies to have an impact within the U.S. marketplace.
However, marketers will first have to discover how to use
this medium to their advantage. Teletext's basic value will
be in providing updates of rapidly changing information to
the business sector and to consumers to a lessor degree.
The major advantages of teletext are its low Operations and
equipment costs for both subscribers and system operators.
Also, it allows for browsing a'la newspaper reading (which
people seem to enjoy) and teletext is easy for users to

understand and operate.

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It is vitally important for advertisers and businesses
to be knowledgeable about the various types of teletext
available today, as outlined in Figure 1. The lack of an
internationally agreed upon standard means that either the
North American Teletext Broadcast Standard (NATBS) or the
World System Teletext (WST) standard could be used by a
system operator to transmit teletext messages (Danna, 1981;
"Still tugging and pulling on teletext", 1982, Gordon,
1983). There is also a need to be knowledgeable about the
difference between teletext and Viewdata. The basic

differences are as follows:

1. Teletext is generally broadcast over air waves on the
Vertical Blanking Interval (VBI), although cable, FM radio,
direct broadcast satellite or multi-point distribution

services can be used.

2. Teletext systems usually have a limited database because
the information is transmitted in cycles, so a large
database would adversely affect response times and the type

of search procedure used (larger means more complex).

3. Database sizes can range from 150 frames for VBI
teletext to around 10,000 for full-channel teletext, while
Viewdata databases can range upwards to 100,000 frames or

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4. Teletext characters are generally alpha-mosaic, though

Telidon, PLP and Antiope use alpha-geometric characters.

5. Information transmitted over a teletext service is of
the nature where there are many (greater than 100)
simultaneous requests and a need of frequent updating (30 or

more times per month).

6. Users cannot gain accesss to a "gateway"--a
system-independent database linked to the videotex computer
by some communication. medium--through. a 'teletext service

(Alber, 1982).

Scrolling Teletext

 

Another name for scrolling teletext is cabletext.
Information is continually cycled over and over from the
bottom to the top of the display screen, giving viewers
about one second to read each line. Viewers have no control
over the transmission of information. A full channel is
used to transmit and display the information, so there is no
need for a decoder to receive this form of teletext. The
typical content is news, sports and weather briefs. For

many of the cable systems that use scrolling teletext, the

12

news is more localized in content.

Overlay Teletext

 

When a viewer wishes to catch up on the news of the day
he can flip a switch on his teletext decoder and have
information flow across the bottom of the display screen.
An example familiar to most everyone would be the "weather
watches" that are horizontally scrolled across the TV screen
during bad weather. There is no interruption of the regular
programming except for the message at the bottom third of
the screen. As with scrolling, viewers can only watch the

text and not interact.

The potential for' overlay teletext 'usage will most
likely be greatest during commercials. Rather than flipping
through various channels to find desireable programs while a
commercial is broadcast, viewers may opt to catch up on the
latest headlines. Again, localized news will probably
account for the greatest percentage of content on overlay
systems, but there is also a growing need for up to the

minute financial information.

1"

 

 

 

13

Boxing Teletext

 

Boxing is similar to overlay teletext except that
messages are scrolled through a rectangle box which blankets
a small portion of the display screen. Again, normal
programming is not entirely interrupted. One interesting
capability of both boxing and overlay teletext is that the
system can be overridden from the headend (open captioning)
to allow emergency information to be displayed without
viewer commands. Cox Cable Communications offers this
service as an option on its security service package. This
is a very beneficial attribute for aphasics and the hearing
impaired who normally cannot process or hear audio

broadcasted warnings or messages.

Closed-captioning, which provides printed dialogue for
the hearing impaired, has been the most common use of boxing
teletext in the United States. Approximately 55,000
closed-captioning decoders have been placed in service to
date and this figure could grow upwards to sixteen million
as cable operators become involved in providing the
decoders. However, as with other videotex services, the

need for costly decoders has slowed the penetration of this

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service.

Full-Channel Teletext

 

Instead of transmitting information in the VBI of a
broadcast signal, information can be delivered by phone
lines, coaxial cable, direct broadcast satellite or even
microwave. One entire channel is dedicated to providing
full-channel teletext which means that cable or satellite
services will be the primary media used to deliver it. This
does present some channel availability problems for both the
small cable system operator and subscribers to DB8 and STV

who have a limited channel capacity.

Keypad demanded, touch-tone and floppy storage teletext
are full-channel systems which help to alleviate the problem
of a teletext database size and VBI broadcasted teletext.
Also, with these types of teletext it becomes possible for
the user to store information in their personal computer, or
on hard copy via a printer, for use at their own

convenience.

 

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Keypad Demanded Teletext

 

Keypad demanded teletext gives control over information
access to the user. A numeric keypad allows users to call
up the specific information they desire. Again, a decoder
is necessary, and an activated decoder will substitute
teletext service for‘ the regular programming or require
switching to a specially designated teletext channel. With
the increased user control, it is possible for the database
to be structured to provide greater amounts of information:
news, advertisements, restaurant and entertainment guides,
public transportation schedules, shopping and more.
Therefore, keypad demanded teletext offers greater utility
to subscribers, along with better opportunities for

advertisers and public servants.

The depth of coverage of teletext news still does not
compare to what is possible with Viewdata or newspapers;
yet, the expected cost will be better suited to the pocket
books of consumers. Another limitation of present systems
is the lack of available memory in decoders to store the
teletext pages. The end result is that subscribers have to
wait for each page to be individually transmitted from the

headend rather than having all the requested information

16

delivered together in digitized packets and available
immediately upon request. More memory will mean that
information, once requested, can be continually transmitted
so that when the user accesses a series of pages he will
have the pages waiting in the decoder's memory for immediate

display.

Touch-Tone Teletext

 

Essentially, touch-tone is identical to keypad demanded
teletext. The only difference is in the communication link
used. Keypad demanded teletext; is delivered via cable,
while touch-tone is delivered via paired copper telephone
lines. However, using a touch-tone phone can prove to be
more difficult. For instance, touch-tone teletext requires
a phone call to the central database and the inputting of a
numeric identification number rather than just switching on
the decoder. Also, touch-tone teletext requires a modem
(which may be less costly than a decoder) and it will tie-up
the home phone line unless an additional line is installed
or the telephony equipment can be upgraded to efficiently
handle separate voice and data communications on the same

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Floppy Storage Teletext

 

When terminal memory capacities are increased it will
be possible for teletext information to be sent via
satellite or cable to businesses or homes and received,
selected and stored on a floppy disk (or even a
videocassette) by a pre-programmed intelligent terminal.
Information transmitted at 8 Mbits/second would make 30
million pages available per hour, though present storage
technology makes storing this much data an impossibility.
The intelligent terminal would select and store "key worded"
information, such as quotations on certain stock prices or
all stories that are about football. Under this system, the
subscriber can take advantage of off-hour data transmission
rates to make teletext more cost efficient while enjoying

the convenience of viewing the pages at his leisure.

One system that is conceptually the same as floppy
storage teletext is the Dow Jones & Co.'s "Dow Alert" which
sends coded information to radio receivers via satellite.
If the information code matches the desired codes inputted

into the system by the subscriber, then the data is stored

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18

on a cassette tape to be listened to at the user's
convenience. Unfortunately, due to a lack of demand, this

service has been terminated.

The Future Market: Teletext

 

If system operators can overcome the technology's two
major shortcomings--costly decoders priced at $100 for
built—in decoders to about $200 for set-top decoders
(Tydeman, Lipinski, Adler, Nyhan and Zwimpfer, 1982) and a
lack of agreement on whether NATBS or WST is best-~then it
should attract the business sector. Soon after, the mass
market will be attracted, making teletext a profitable

venture.

Most likely, either keypad demanded or touch-tone
systems will emerge as the most visible and profitable types
of teletext in the United States. These two systems bridge
the gap between expensive Viewdata systems and the more
primitive scroll, overlay and boxing teletext. Also, at
this level of equipment sophistication, it will be possible
to offer a service that is significantly better than

anything presently available in the way of information

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retrieval methods, yet not so complex that a great deal of
behavior change or user skill would be required. Moreover,
keypad demanded and touch-tone teletext do not require
excessive waiting times and the ease of use of these systems
will give users control over the service (a psychological
victory of man over machine). Also, these systems will
probably end up being provided free of charge or on a small
monthly charge due to the difficulty of setting up an
accounting system for billing. Lastly, teletext advertising
revenues should more than cover the relatively small
operating costs: equipment maintenance, personnel, rent and

utilities (Stokes, 1980; Trahan, 1981).

Advertising on teletext will likely take two general
forms: regular and passive. Regular advertising will
I resemble that of advertisements in magazines only the
emphasis will be on informing viewers about the product, its
benefits and its uses. Very few consumers can be expected
to search out an advertisement unless it can help them in
their purchase decision or product usage. The present lack
of audio capabilities and poor graphics will hamper an
advertiser's attempt to sell or create an image for his

product.

Passive advertising will be nothing more than having

(logos or slogans appear across part of the teletext

20

a; display. This form would be most comparable to outdoor
fifadvertising. Those companies interested in passive
”iradvertising will most likely be a sponsor for the specific
5information pages that are displayed with their logo. For

1 example, Budweiser might sponsor the sports scoreboard.

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21

Viewdata

For those businesses and consumers who can afford it,
and understand the ramifications of fast, convenient
information retrieval, transacting, messaging, computing and
telemonitoring, Viewdata will be the "wonder service" of the
future. For now, viewdata's standards, costs, system
complexity and problems with human compatibility have
retarded this technology's diffusion into our society. Its
eventual emergence into society should have a profound
impact in the way people interact with other people and
institutions. However, any attempt to pmedict the precise
impact Viewdata will have upon society at this time would be

only useless conjecture.

There are many different variations of Viewdata systems
already in existence, though they all fall within three

xgeneral categories: system dependent/keypad (numeric

I
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5 terminal) accessed, system dependent/keyboard (alphanumeric
fterminal) accessed. and system independent/keyboard
iaccessed. Dependency is determined by whether system

control is in the hands of the user or the system operator.

Within these three categories, systems can differ on

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standards, database structure, log-on procedures, search
procedures, communication link, storage, processing
capability, services offered, the ability to access gateways

and cost.

Two-way terminals are necessary for system independent
videotex, but can be used with system dependent services
too. The two terminals currently used are transponder
terminals and transmitter terminals. Transponder terminals
act as a receiver where the database computer sends
digitally encoded messages to the terminal which are then
acted upon as required. The transponder terminal will only
send messages upstream to the database when it is instructed
to do so by the database computer. Such a system can
effectively service a home requiring telemonitoring, and
with a contention network accesss scheme, can service
information retrieval, transacting, messaging and computing
needs very efficiently. A contention network modifies the
transponder terminal and gives users control over sending

data upstream at their own convenience.

Transmitter terminals are made up of a few digital
chips which continuously send messages to the database
computer. Obviously, such an arrangement limits these
terminals to cable system use unless every home can be wired

with a dedicated phone line. The database computer must be

 

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23

able to receive, store and act upon the data from every
subscriber simultaneously. While a transmitter terminal
requires greater spectrum space than a transponder terminal
(approximately twice the space), it is cheaper and less

susceptible to jamming and signal ingress on cable systems.

The major difference between Viewdata and teletext
systems is that teletext is "polled" every few seconds and
still basically a one—way service, while Viewdata is on-line
in a dedicated communication link with the database
computer. The QUBE system, owned and operated by Warner
Amex Cable Communications, is considered to In: a Viewdata
system although user responses are polled. Viewdata is
considered to be two-way interactive communication; it is
possible to accomplish information retrieval, transactions,
messaging, computing and telemonitoring over Viewdata
systems. Teletext (and systems designed like QUBE) are
essentially one-way interactive communication where users
can retrieve information or accomplish transactions
requiring only a numeric input. Telemonitoring may also be

available if cable is the communication link used.

91

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24

System Dependent/Keypad Accessed

 

An V_VRS‘-A-_'2_32C modem or a decoder. is necessarywto enable
communication between the user and the database for
Viewdata. The user either dials up the database with a
touch-tone telephone or switches on his addressable decoder
to gain access onto the system. Once on-line, the user will
need to answer a series of questions designed to guide him
to his desired information. A numeric keypad or a
touch-tone telephone is necessary to respond to the
questions. The ultimate control of a system
dependent/keypad accessed service is vdifll the system
operator--the user is confined to answering the displayed
questions. The search procedure is similar to that used by
banks in their automatic teller machines (e.g. menu

driven).

The major problem with keypad accessed Viewdata is the
time consuming and high error potential of the search
procedures used. Subscribers could be required to answer up
to 15 questions and spend over one minute just to access one
piece of data. However, technological advances can be
expected to alleviate this problem as it has for other more

sophisticated videotex systems.

25

These systems are both simple to understand and use,
while being relatively inexpensive. It could be possible
that this type of system will be the most appropriate
Viewdata system to introduce given the current level of

computing sophistication in the United States.

System Dependent/Keyboard Accessed

 

The problem of long access times is improved upon by a
keyboard accessed system. Usually, a dumb terminal (one
with little or no storage or processing capabilities) is
used to input alphanumeric commands, though an intelligent
terminal can also be used. The current growth in personal
computer sales ‘would indicate that intelligent. terminals
will be the dominant terminal used in keyboard accessed

videotex systems.

A modem or decoder is also required for access to a
system dependent videotex service. However, the
alphanumeric keyboard allows for keyword searching (see
Database Arrangement) which can eliminate much of the search

task.

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26

System Independent/Keyboard Accessed

 

This type of system requires users to own or rent a
personal computer, or some type of intelligent terminal with
a fair amount of nemory--at least 4K to be pmactical, but
40K for geometric displays. A high-resolution monitor is
also necessary. The services that can be provided to
subscribers at this level of equipment sophistication are
almost endless. By using micro-computers with greater
memory; user storage, programming and computational
capabilities can be enhanced. However, due to interface
problems, users of system independent Viewdata cannot expect
to be able to access system dependent services. The Source
and CompuServe are two presently available timesharing
services who sell access to their nminframe computers and
seemingly endless database of information and services.
These two companies, plus iNet (See Videotex System
Organization) and Times Mirror Videotex Services' “Gateway"

test, are the ultimate in videotex systems to date.

27

The Future Market: Viewdata

 

Viewdata should grow like the other communication
innovations that have evolved into useful products and
services today (Utterback, 1974). However, it will be many
years before Viewdata will gain the sufficient penetration

necessary to be taken seriously as a viable medium.

The major obstacles to be hurdled are cost and a lack
1 of consumer' confidence :hn computer related ‘technologies.
Yet, both of these problems can be overcome in the
short-run. Once hardware manufacturers have an agreed upon
standard to build their equipment, the U.S. will see an
increasing penetration of terminals on-line with videotex
databases and an increase in the amount of software produced
to enhance Viewdata services. The formula for greater
consumer and business acceptance is: a set standard +
compatible hardware + useful software + increased equipment
production + lower equipment costs + advertising

underwriting costs + lower service costs.

Also required will be the active participation of
information providers (IP's) in marketing their information

to customers.‘ gIP's include advertisers, news services,
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28

newsletters, magazines and any other business that can sell
their' product. or service 'via an1 electronic media.
Participation by IP's cannot be passive, as in Britain; but,
instead IP's must inform customers what information is

available through advertising in other media.

Information on Viewdata can be on just about anything,
as can the services provided, from advertising to
transportation schedules to :financial newsletters, to the
placing of gambling bets. However, consumers will dictate
which information and services survive, and if a consumer is
unaware of its availability, then he will not seek out the
information or service. It must also be remembered that
consumers will have to change their behavior patterns in
order to accept viewdata--a task that cannot be underrated--
and it is the IP's who have the best chance to initiate this

change by providing innovative and useful services.

Offering a worthy and valuable service that is not a
"me too" service is the only way to gain consumer acceptance
for a product that does require a change in behavior. Of
course, it would be helpful if more data was available on
user demographics and psychographics so IP's could get a
better understanding for the target. market of Viewdata.
However, privacy laws and various other federal and state

regulations will likely limit the amount of user information

29

that can be collected. Trial and error will be the likely
way operators and IP's discover which services consumers

will want and pay for.

 

 

 

30

Videotex Standards

Unlike the European videotex industry where governments
have dictated the standards, the United States government
has had very little influence on the U.S. videotex market so
far. The government has left the evolution of this
technology to the marketplace. The result has been the
cautious development of videotex systems; manufacturers and
system operators have all been reluctant to make a major
commitment because of the possibility that their investment
could be negated by the establishment of a divergent
standard. Therefore, there is a need in the U.S. for
interface compatible equipment and for a method that allows
access to ”outside" databases while assuring data security.
Moreover, it would be helpful if systems were made
compatible with both home computers and television sets in

order to reach a greater percentage of households.

The underlying purpose of setting standards is to
instill confidence in the technology for everyone involved.
Manufacturers can produce equipment without fear of instant
obsolescence; system operators can construct their systems

and know their investment will not be lost overnight;

31

consumers can purchase hardware ‘with the knowledge that
their equipment will interface with all databases; and
information. providers can safely input their information
knowing that users throughout the country have the ability
to access it. The standard that is set will influence the
availability and quality of services, the cost of equipment,
the complexity of a system and the compatibility of various
equipment and systems. So, the selection of standards is an
important step in the evolution of videotex. Unfortunately,
consumers will have very little say in what system is

developed in their community.

The major organizations involved in setting the
international videotex standards have been the International
Organization for Standards (180) and the International
Telegraph and Telephone Consultative Committee (CCITT).
Standards were needed for both intrasystem (system interface
components) and intersystem (interface between systems)
networks. Some of the objectives set by the ISO and the

CCITT were as follows:1

1. Bloom, L.R., A.G. Hanson, R.F. Linfield, and D.R.
Wortendyke, "VIDEOTEX Systems and Services," Report 80-50
from the National Telecommunications and Information
Administration, October 1980, p. 126.

32

- COmpatibility of consumer terminal equipment for

interactive and broadcast videotex.

- Acceptable quality of display reproduction.

- Economical purchase and installation charges.

- International network capabilities (intelligent

gateways-protocols, easily interchangeable codes, data

packets and software).

- Interconnectible features.

- Greater utilization of information services by users.

- Acceptable frame formats.

- 625/525-raster-line conversion (to make European and

American television compatible).

- Terminal identification for billing purposes.

The American National Standards Institute (ANSI) and
the ISO developed the “Reference Model for Open Systems
Interconnection", which consists of seven independent layers

that make up a framework for system standards. Layers 1-4

‘7‘

33

refer to transmission standards and are transparent to
users, layers 5 and 6 refer to user dialogue and layer 7
defines the applications of the information service. The
layers and the area of concern for each are as follows:

1. Physical Layer:
functional, mechanical, electrical and
procedural characteristics needed to
establish, maintain and release physical
communications between systems (RS-232C).

2. Data Link Layer:
functional and procedural means to establish,
maintain and release data links in a
network.

3. Network Layer:
functional and procedural means to exchange
data between systems.

4. Transport Layer:
for transfem' of data. between. two systems,
network used, routing algorithm and data flow
procedures.

5. Session Layer:
procedures for log-on, user identification,
billing and statistical gathering.

6. Presentation Layer:
to provide services to be selected in Layer 7
that help the meaning of exchanged data:
management of entry, exchange, display and
control structure (usable characters, text,
graphic coding scheme and attribute coding).

7. Application Layer:
defines the information service itself and
how to serve: the end ‘user (retrieval and
access methods).

34

The European Conference of Postal and
Telecommunications Authority (CEPT) have set the European
standard for videotex to accommodate the British, French and
German videotex needs. Essentially, this standard (mosaic)
allows for the manufacturing of low-cost decoders at the

expense of text and graphic display quality.

The standard set in North America is known as
Presentation Level Protocol (PLP). This standard is ikn: a
geometric system and employs a coding scheme that is
independent of the required hardware making it practically
obsolescent resistant. PLP allows for the alphanumeric and
graphic generation of pages automatically from statistical
data. PLP can be upgraded from low-resolution to a
high-resolution system without modifying the format of
existing information in the database; such is not the case
with CEPT. Also, PLP does not require additional page
preparation time even though greater detail can be

accomplished. The mechanics of PLP are:2
- Specific coding defines rules, procedures and formats

for text, graphics and control information.

- The coding scheme is based on CCITT F.300 (known as

2. Berkman, Sam, "A PLP Tutorial," paper presented at
Videotex '82 in New York, June 28, 1982, pp. 7-8.

35

"Videotex Service", describes the standard parameters
for a public videotex service) and 8.100 (known as
"International Information Exchange for International
Videotex”, defines the characteristics (n3 coded
information and display formats) recommendations. Both
5.100 and F.300 recognize Prestel's serial coded
alphamosaics, Antiope's parallel coded alphamosaics and

Telidon's parallel coded alphageometrics.

- PLP can accommodate both 7-bit and 8-bit environments.

- ASCII (American Standard Code for Information

Interchange) alphanumerics is provided for (digitally

coded: the letter A = 65 or an ASCII value of 1000001).

- A set of supplementary graphic characters is

available.

- Dynamically Redefinable Character Sets (DRCS) are

available for the encoding of text.

- Mosaic graphics can be created.

- Geometric graphic primitives are compatible with

Picture Description Instructions (PDI).

Additional PLP capabilities include:

36

- Color mapping.

- Controllable stroke width.

- Continuous test scaling.

- Unprotected fields (for use with electronic order

forms).

- Programmable texture masks.

- Macro PDI's (the definition of objects containing a set
code which allows one to call on the macro, saving

transmission time and cost).

- Transit macro (code of a figure is transmitted, given a
macro name and then stored as a macro so that the
figure can be used again and again by only transmitting

the macro name).

Coding Schemes

 

The five display technologies are alphamosaic,

37

alphageometric, dynamically redefinable character sets,
picture description instructions and alphaphotographic (K.
Clarke, 1982; Larratt, 1982). The differences between
various videotex systems exist due to the codes used for
transmission and the method used in information display by

these technologies.

Alphamosaic coding divides the display screen into
rectangles. Systems in the U.S. use between 640 and 800
rectangles (Alber, 1982). Each rectangle can then be
subdivided into 10—by-8 dot matrices (Figure 2). If the
matrix is allocated a character, then a 7-by-5 grid creates
the character pattern, while a 3-by-2 grid creates requested
graphic patterns. The unused grids are left blank to
enhance readability. Images and words can be formed by

arranging the matrices in a logical pattern.

Alphamosaic videotex is considered to be the first
generation of the display technology. The resolution is
low, 72-by-80 pixels (picture elements), which accounts for
the poor quality of mosaic graphics. However, user
terminals require only 1K of memory to receive, store and
transmit to the display screen alphamosaics, and therefore,
are the least expensive terminals that can be used.
Transmission of alphamosaics only require voiceband capacity

(usually at 300 bits per second, but it can be up to 1200

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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FIGURE 2 Representative Alphamosaic Screen and Grid

39

bps).

Alphamosaic pages are stored in the database computer
in the exact makeup as they will appear on a display screen
and are transmitted synchronously in bit-serial form. Each
byte of information contains an address code which
corresponds with a particular character location in the ROM

of the terminal and likewise on the display screen.

Serial attributes, which require synchronous
transmission (set position for each transmitted character on
the monitor), have the attribute code-—the control
information, such as color and flashing
characters--multiplexed in the ROM with the display
characteristics and is sent in sequential order to the
display screen. Since each byte corresponds to a matrix
position on the screen, a space will appear on the screen
every time an attribute code is encountered. IWhile the
space created may not appear as a blank mark on the screen,
this limitation. reduces the flexibility' of graphic
creations. For instance, this problem makes changing the
color of every other matrix, graphic or text, impractical.
Suffice it to say, there are ways to overcome this problem
which are beyond the scope of this thesis. The advantage of
serial attributes is that the attributes of many characters

can be changed simultaneously by a single byte code. The

40

same advantage does not hold true for parallel attributes.

Parallel attributes are 8-bit codes which are stored
with another 8-bit display character, making a total of 16
bits used to define the makeup of each matrix. All 16 bits
are addressed simultaneously so that attribute definition
does not interfere with the character display and cause a
blank space on the screen. Parallel attributes are
transmitted asynchronously (data is continuously
transmitted, but there is no set relationship between
characters and their position on the monitor), which not
only increases future flexibility, but also reduces the
error rate. Two disadvantages of parallel attributes in
U.S. systems are that 2K of memory is needed (though with
the low cost of memory today this is hardly a problem) and
that it is not usually possible to change a parallel
attribute simply by transmitting another 16 bit code to a
matrix location. This can lead to problems in the creation

and updating of pages.

Alphageometric display is the second generation of
videotex technology. Resolution of geometric text and
graphic figures is increased to 240-by-320 pixels, or about
one-fifth the resolution of a television picture, and
conforms to the ASCII 7-bit code, along with ISO code

646-1973(E) and its extension ISO 2022. The two ISO codes

41

call for a 20 x 40 display format that uses 128 control,
graphic and text characters to define letters, digits and
symbols (Lax and Olsen, 1983). The code is broken down in
the control set, which is composed of 32 codes (backspace,
inquiry, transmission control, etc.), and the graphic set of
96 codes. The graphic set is then subdivided into three
separate character sets: the G0 set handles basic English
and Roman characters and numerics, G1 is used to compose
simple graphic displays and G2 adds additional symbols
necessary for the proper display of French and German

languages.

Geometric graphical information is encoded and then
transmitted in a cartesian form which breaks down the screen
on a dot—by-dot basis. The Telidon system introduced this
technology, calling it "bit plane memory". This type of
transmission negates the need for a character generator in
the decoder, but the trade-off is that about 40K of memory

is necessary to fill a screen with information.

There are three advantages alphageometric coding holds
over alphamosaic coding. For one, pictures are defined much
better and the haziness associated with mosaic graphics is
eliminated. Also, alphageometric terminals have a
considerable degree of system independence, meaning that a

system can be upgraded without making the user terminals

1+2

obsolete. Lastly, alphageometric coding reduces the number
of bits needed to be transmitted and stored, which in turn

reduces user costs.

However, there are also three basic disadvantages of
using an alphageometric coding scheme rather than
alphamosaic. First, the extra memory required will increase
user costs, though the continuing decline in memory costs
reduces the effect of this problem. Secondly, editors
(IP's) need a local dedicated computer to insert and update
information, while editors (HIEi mosaic system only need a
keyboard. Also, the software routines for an alphageometric
system are more complex and time consuming to install, plus
the transmission rate of data usually exceeds the processing
rate of presently available user terminals. User terminals
must be able to stop transmissions periodically until it can

process the information it has already received.

The next level of technology is dynamically redefinable
character sets (DRCS) which increase the amount of graphic
figures a system has for frame creation. Instead of relying
on greater ROM to increase the memory storage capacity, bits
of information that define additional characters are
downloaded into the. decoder or terminal's random access
memory (RAM). The DRCS can be used to create special

alphabets, mathematical symbols (n: foreign languages and

’43

essentially is a secondary character generator ROM. So, when
a page is ready to be transmitted, standard characters from
ROM and special characters from RAM are used to reconstruct

the page on the display screen.

Much like DRCS, picture description instructions (PDI)
are downloaded and stored in the videotex decoder or
terminal which make it possible to create complex graphics
with relative ease. Picture description instructions can
deliver higher resolutions (up to 1024 )(.1024 pixels) with
additional memory. Each PDI is known as an opcode and is a
one byte code. The seven basic PDI commands are a point,
line, arc, rectangle, polygon, bit (this draws figures point
by point similar to facsimile machines) and control (this
gives control over the mode of creation commands). The
first five [commands are for alphageometric graphics and
allow for the creation of figures by connecting a set of
points charted on the screen. "Bit" and "control" commands

are used in alphaphotographic videotex.

The transmission of alphaphotographic videotex includes
both text and still video frames. Presently, photographic
quality information is transmitted at 2.4 1x) 4.8 Kbps and
will build up a picture 1/9 the size of the display screen
in 15 to 60 seconds. At transmissions of 64 Kbps, a slow

scan picture 1/4 the screen size could be accessed as

1+4

quickly as one second and displayed within eleven seconds.
To create the picture, pixels are assigned one of sixteen
brightness levels which correspond to a voltage level that
will control the video display. Pixels are then sent to the

display screen on a point by point basis.

The two main alphaphotographic systems under evaluation
presently are Japan's CAPTAIN and Britain's Picture Prestel.
CAPTAIN is the most interesting system because it has been
designed to be used with a character generator as well as
transmitting photographic quality pictures. In fact, input
of characters, mosaic symbols, photographs and hand-drawn
pictures into the system are accomplished by using an ITV
camera in a process similar to that used by facsimile
machines. Unfortunately, little information is available on

the CAPTAIN experiment.

The three difficulties to be overcome with
alphaphotographic videotex are with the long transmission
time needed to create an image, the large amount of memory
needed to store an image and the high costs involved. A
user' terminal needs ea special interface control card to
access an alphaphotographic videotex system (costing from
$50 to $100), a microprocessor with at least 48K of memory
and a picture storage capability of 24 Kbyte (8 Kbyte for

chrominance and 16 Kbyte for luminance), on top of a high

45

priced access charge.

The transmission times required will be significantly
reduced with the onset of more sophisticated data
compression. ‘techniques. An. .alphaphotographic ‘videotex
system transmitting at 64 Kbps cannot use a voiceband
transmission service, but requires a yddeband service such
as cable, satellite or fiber optic phone lines. The present
technology of slow scan picture generation can be sent at
slower speeds-~taking up 1x) eight individual picture pages
to compose a recognizable picture-quality
photograph--unfortunately the access times are too long to

be compatible with American patience levels.

Without a doubt, alphaphotographic videotex, when it
becomes a cost effective medium, will become the direct
marketing sales device advertisers are looking for to sell
their products and which consumers will pay for to do home
shopping. For most Americans, nothing short of photographic
pictures of merchandise will do for electronic shopping,
especially on the higher priced products that should
proliferate videotex marketing in the beginning. The same
feeling will hold true for most advertisers, as we will see

later.

1+6

Videotex System Organization

While understanding the technology of videotex is
important, it is equally as important to know how a system
is organized, what the needs of the various people involved
are and how videotex is linked to the end users. This
section will briefly look at the different types of
databases in existence, along with the type of search
procedures and communication links available. Also, brief
discussions will be given to information provider and user

terminals needs.

Essentially, there are four separate entities to be
concerned with in regards to videotex system organization.
There is the system operator who is concerned with the basic
systemn design, operation and functions. Information
providers are interested in data management: how they can
create and input their information, edit and update it, how
billing procedures are handled and the costs incurred. The
network provider is concerned with the physical
communication link between the database and (fine end user:
the speed of transmission required, problems with system

blocking, ease of access and the costs of equipment and

47

services. Then there is the end user himself, who will
evaluate the utility of a videotex system based on cost,
system capability-terminal requirements, mode of access and
search, the complexity of services and overall system

characteristics and benefits.

In designing a videotex system, the operator must
consider each of the above mentioned concerns. The
fundamental objectives every system should consider include

the following:

- 24 hour, seven day a week operation.

- Updating to be accomplished on-line.

- No need for database reorganization--a little planning
can prevent a lot of future headaches-~50
considerations must be made for future enhancements
like audio capability, speech recognition, key ‘word
searching, downloading of programs and photographic

editing routines.

- Billing pmocedures, accounting and system nmintenance

must be accomplished on-line.

- Sophisticated diagnostic and automated defense

mechanisms are needed to efliminate malfunctions--this

48

includes a backup system and reserve power supplies to

keep the system on-line under any emergency.

- Minimum system operator involvement, meaning that the
system is relatively transparent to iflua user and the

information providers.

- "Help" facilities to assist the beginning user who is

not familiar with computers and databases.

- Maximum system security, both on-line and in the user

data collected.

- System design independent of the technology so that

equipment obsolescents is not a problem.

- Maximum terminal computing power to reduce the amount

of data needed to be transmitted.

The are two types of network configurations used in
designing a videotex system: a replicated (or distributed)
database and an open-system with gateways. The European
systems favor the replicated database, like Prestel's
Advanced. Network Design Architecture (PANDA). Under this
approach, system control is locally oriented. For instance,

each town would have its own local information center (for

“9

inputting and updating of information) and local user center
which are linked to user terminals through a public switch
network and a local administration center to handle billing
and accounting. All information that has a high frequency
of access is stored in the local information center, while
less frequently accessed information can be accessed through
a centrally located database center. This type of
arrangement is a compromise between a teletext system and a
Viewdata system. Local databases can keep storage capacity
and. wait times at, a minimum, while providing the most
requested information, yet it allows users to access a
potentially unlimited database. Of course, accessing
information that is not locally stored will significantly

increase user cost and wait times.

In the U.S., an open-system ‘with gateways will be
used. The major reasons why this type of system will be
built are that Americans are expected to want to be able to
access the myriad of gateway services that should develop
and because of the lack of an agreed upon standard. Also,
an open-system makes it possible for both public and private
gateway services to operate and interact with each other.
The major advantage of an open-system is that it is not
necessary to replicate identical data in every database.
Instead, gateways--which will be transparent to users--can

be independently accessed, depending on the type of

50

information desired.

In an open—system with gateways, a series of locally,
regionally and nationally distributed database services will
be interconnected. Billing will probably be based on
gateway service usage, plus a set monthly charge. However,
by relying on gateways to provide data without a set
videotex standard, it will be necessary for a method of
interfacing incompatible equipment to be found. This can be
accomplished through developing software which can convert
various interface protocols into a code that any database
computer can understand and therefore, should not be a

limiting factor in the evolution of videotex.

Also, by using gateways, low penetration will not be as
large a problem as it would be for replicated networks. It
would be possible for every videotex subscriber to access
any given gateway service, which at a low penetration of
only 2% still would mean a potential market of 4.5 million
people. Moreover, in the introductory stage of videotex,
this market will consist of the upper income market at which
most IP's want to target their information. The end result
will most likely be a plethora of videotex services
available, some useful and some not--simi1ar to the current

personal computer software market.

51

One experimental system that incorporates an
open-system videotex service is the Computer Communications
Group» of the TransCanada Telephone System's “Intelligent
Network", better known as iNet. This field test has 400
Telidon terminals (including 125 Telidon-compatible
Displayphones) placed in various businesses in Canada which
are linked together by Datapac CCG's public packet switched
network (Gwen Edwards, 1982; Farrell, 1982). The videotex
services offered are tailored to the specific needs of the

businesses using the system.

For each user, iNet sets up an account which allows for
immediate access to any on-line gateway and IP's service.
Billing is accomplished in a single monthly bill. Also,
both user-to-user and user-to-host messaging is possible,
even between incompatible terminals if necessary.
Furthermore, there is no language barrier on iNet because
the system is user friendly in English and French. The user
only needs to sign on, input his identification number and
then access one of four directories. The directories
include a personal directory (e.g. messages, calendar, phone
numbers), a. ‘user/corporate directory (e.g. corporate
information and services), a public directory listing all
the nationally available information. and services and a
regional directory listing region specific information and

services.

52

Figure 3 is a schematic drawing of a generic videotex
system configuration from information provider to the
database and the end user. The system can fit the
definition of both a replicated network and of an
open-system network . However , the key features that are

documented within the figure are:

1. The local database is the central link between the
gateway services and the user. Whether the local
database is a cable operator, the telephone company or
an independent company, it will be the center of
communication. The national database represents
either a gateway service or an information holding

service for infrequently accessed data and services.

2. IP's can input their information at either the local
or national level. This convenience will appease
local retailers who will want to distribute their
messages in a specific area and regional and national
marketers who do not want to have to input their
information into every local database. Plus, this
allows for videotex markets to be segmented very

narrowly if desired.

3. The transmission vehicle used can be either cable,

phone lines or over-the-air. Also, a system could

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easily provide both a teletext service and a Viewdata
service together to better serve the users specific

needs.

4. The videotex user will need either a decoder or a
terminal to receive, process, store and retransmit
data to a display or printer. The device must also
have the capability of sending commands or information

upstream to the database computer.

Database Arrangement

 

There are three classes of videotex database services,
which can use either a ndcro or ndnicomputer if less than
180,000 pages are :needed, a: front-end minicomputer that
operates off a mainframe computer or a mainframe computer
for the largest of systems. One service is a public
database which everyone can access and communicate with.
The public databases will offer all of the basic videotex
services through either gateways or locally stored services
and will be the main source of distribution for IP's data
and services. A closed user group database service will be
for specific users (e.g. a subscriber-based stock market
newsletter) and will contain proprietary information meant

only' for those users given. access, much like cable pay

55

services today. The third database class is an in-house
database situated within a company. This type of service
can either be set up as a local area network or similar to a

closed user group.

The major service a local database provides is a single
point. of access for *videotex ‘users. Through this
connection, gateway services are but a: few commands away.
The user needs to remember only one set of connection
commands and one identification number, plus they must
become familiar with one search method. Also, billing for
all services accessed is consolidated into one bill; a
worthwhile convenience in itself. The problems to be
overcome are with standardizing gateway services so that
each uses the same display technologies and search
procedures, controlling the logistics of updating services
and directories and standardizing billing charges and

procedures.

To input information into a videotex system, IP's will
need a terminal compatible with the database's computer.
These terminals can be quite costly (up to $20,000 per unit)
but are necessary to give the IP's the frame creation
control they desire. The basic functions and capabilities
of the Telidon IP terminal are as follows:

Graphic Editing

Word Processing

56
Eight. colors, six shades of grey and
flashing white.

360 degree rotation in any direction.

Image scaling from .01x to 100x the
original size.

Image reflection.

Text and graphic animation.

Motion.

Grid overlay.

Overlays and overwriting.

Repositioning of objects.

Sequence changing.

Timing control.

Windowing--to zoom in on a portion of
the page.

Deleting specified objects.

Changing colors.

Adding and deleting of blocks of text.

Moving text.

57

- Overwriting characters.

Format Commands

- Right and/or left justification.

- Page size and line length
specifications.

- Spacing of text.

- Indentation.

- Embedding and appending of other text
files.

- Changing text color.

— Specifying background color.

- Merging of text and graphics on a page.

The Telidon terminal is probably the most advanced
graphic equipment available for creating videotex pages.
With this terminal, an IP can design and create
approximately five pages per hour. Creation times are
reduced by a bulk formatting process which calls up
previously created pages that are similar to the desired

layouts and then allows for individualization of the page.

The type of database computer used will influence the
storage technology used. For videotex, hard disc storage is

preferred to floppy disk because of the faster accesss times

58

possible, the better transmission rates achieved and the
higher storage capacity. When the cost of magnetic bubble
memory is reduced, it will be a better storage medium than
hard disk due to its ability to withstand extremes in
temperatures, vibration, dust and humidity. Videodiscs are
another likely storage medium in a videotex database,
especially for permanent information, and can store up to
1000 frames of information. Sears Roebuck & Co. have
already experimented using Videodiscs for distributing their
catalog data to consumers. However, future advancements in
memory technology could make time present secondary storage

technologies obsolete.

Also, the storage technology used will depend on the
type of information stored. There are three parameters to
be used besides the above mentioned: specificity of
information (specific to general), volume of information and
frequency of updating required. System operators should not
neglect the need for audio storage (e.g. voice messaging or

audio enhanced videotex).

Storage and transmission media will greatly influence
access times, which is an important concern of users. The
time it takes to access the desired information is dependent
on the number of lines dedicated to providing information,

the digital bit rate of transmission, the amount of decoder

59

memory and the search procedure used. The three methods of
search, in reverse order of sophistication, are the tree

process, direct retrieval and keywording.

The tree process, also known as a hierarchical
approach, requires the user to answer a series of questions
designed to lead him to ihis desired information.
Unfortunately, it can take ten or more questions to arrive
at the desired page and if another page is wanted the user
has to go through the entire search procedure again. Figure
4 shows lunv a. user ‘would search for classifieds about
cockapoos. A. directory would inform the user that pet
information began on page 20, and once accessed, page 20
becomes the beginning branch of a pet file. In this case,
the ‘user responds ‘with..alphanumeric commands to listings
given by the database computer until page 201A44 is
displayed. As Figure 5 shows, this hierarchical search can

be numeric or alphabetic, depending on the database.

Direct retrieval search requires a database guide that
lists page numbers of specific information. The user
consults the guide for the page number of the specific area
of information wanted and enters that number. For example,
our dog lover in Figure 4 would input #201A to get the
listing of dogs. From there, the tree method would locate

the listings (n1 cockapoos. This method. will reduce the

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62

search time once users become familiar with the guide.
Direct retrieval also eliminates the need for users to begin
the search procedure again for each different page of
information desired. Instead, inputting another page number
will access another page in a different branch of the
database--this can be helpful for users wanting to compare
information. However, it is difficult to keep an updated
guide for the users to reference unless the guide is
electronic, which would then make the search procedure like

the tree procedure.

The third search procedure, key wording, requires the
most sophisticated computer equipment at the database and
for the user. However, key word search is the most
efficient procedure once users become familiar with the
"key" words. Once on-line, our dog lover would input
"cockapoo" and have the classified listing appear within a
few seconds: no questions, no waiting. The major problem
associated with key wording is that different gateway

databases may set up their "key" words differently.

A fourth search procedure suited for databases storing
personal directories is a relational service made up of
files having the same structure. The records stored in each
file are related through common fields (matching records),

but. this system's structure is “transparent. to the ‘user.

63

Basically, data is stored in interrelated tables and
switching between the tables can be accomplished by a single

command.

The major question to be answered in regards to
databases is how billing will be accomplished and what will
be the exact costs. To date, most of the videotex
experiments have been held at no cost to the users or the
IP's, so the cost structure is still up in the air.
European systems charge a fee for renting a decoder or
modem, a per access charge, a charge for connect time, a
charge for the communication link usage and sometimes an
extra charge for special pages. Obviously, charges will
have to be consolidated into one billing for users in the

United States.

The Communication Link

 

As Figure 3 showed, there are two communication
networks involved in bringing videotex into the office and
home (local and national). In the local distribution of
information, the communication link can be coaxial cable,

the telephone company's local loop or over-the—air broadcast

61+

signals. To link the gateway services, either satellite (or
microwave in some cases) or telephone long lines will be
utilized. In the future, fiber optics could be the medium
used to handle both local and medium distance communication
links, though satellites will be used for long distance

communications.

In selecting the appropriate network four ‘variables
must be considered: service penetration, transmission speed
necessary, decoder or modem cost and the cost of the
communication link itself. Again, it must be noted that
fiber optics will be the optimal medium in the near future
because of its transmission speeds (10 Mbps), system
security, bandwidth (enough to handle video requests along
with voice and data), immunity to external interference and
eXpected lower cost compared to copper pair cable (Toth,

Wong and Strudwick, 1981; Popovics, 1982).

However, the present cost of fiber optics limits its
potential use, especially considering that some 98% of all
homes in the U.S. are already linked by copper pair
telephone lines or broadcast signals. Until videotex
becomes a proven medium requiring greater network capacity,
operators are not going to spend mega-dollars rewiring every
home. This is doubly true for AT&T who lost hundreds of

millions of dollars on its ill-fated Picturephone.

65

Teletext signals will enter the home by way of either
over-the-air transmission or through cable. The three
significant communication networks that will carry Viewdata
services into the 1990's are cable, switched telephone
networks and packet switched networks. The remainder of

this section will focus on these three communication links.

As of May 1983, cable penetration was over 37%, yet
only about 1% of U.S. homes have two-way capability via
cable. However, with proposed two-way systems in Chicago,
Detroit, Philadelphia, Houston, San Diego, New Orleans and
other major cities, this penetration figure is sure to grow

significantly by the end of 1985.

There are two methods for distributing two-way services
over cable lines. One way consists of laying two separate
cables, one for downstream transmissions and one for
upstream transmissions. While this method is very simple,
it is not totally cost efficient. The second way is to use
a single coaxial cable, but to use frequency division
multiplexing for upstream and downstream channels.
Generally, frequencies ranging between 5 and 35 mHz are
reserved for upstream transmission, while frequencies above
50 mHz are reserved for downstream video, audio and data

transmissions. Frequency division multiplexing requires

66

users to have a transponder type terminal. For transmitter
terminals, area division multiplexing is used to separate

the various channels.

With 400 mHz in channel capacity in cable (and 500 mHz
on. the 'way), there. are plenty' of available channels to
dedicate to videotex services. This is even more important
in. institutional (business communication) cable :networks,
which could be the major profit maker for cable systems
built in metropolitan areas. The problem lies in user cost
for terminals and in system control over signal reception
authorization. The answer may be addressable converters and
personal computers. The cost for addressable converters is
still steep, but signal control can be held at the head
end. The videotex signal can be scrambled and coded
(addressed) at the head end so that only the addressed home
decoder can unscramble the signal. Addressable systems seem
to be the most accepted way to tier videotex services on a
cable system. When the quantity of addressable converters
produced can be increased, prices will drop from its present

$125 to $180 range.

Gateway services can be sent to the local cable
operator via satellite feeds or over long distance phone
lines, so the open-system with gateways is a viable system

design for two-way cable services. Knight-Ridder, in its

6?

Viewtron experiment, rejected using cable for its videotex
system on the grounds that two—way cable penetration was too
low. While Knight—Ridder may have missed counting on
chickens that are not going to hatch until the late 1980's,
their telephone based videotex system is the only U.S.

videotex test to become operational.

Viewtron relies on the local phone loop, a paired
copper cable communication link also known as a
circuit-switched network. The interconnection between
points is held for the entirety of a call, even if no
information is being transmitted. At present, this medium
is more than adequate for the amount of transmissions it has
to handle. And it is possible that once Western Electric
perfects its Experimental Digital Switch (XDS), paired
copper wire will be able to handle all videotex
transmissions until fiber optics replace it sometime around
the end of this century (Bergland, 1982). The major problems
associated with local loop analog-switched networks are its
limited bandwidth and slow transmission speed (theoretically
set at 20 to 30 kbps maximum with multiplexing advancements
considered). By digitizing telephone transmissions, both
the costs and the potential of system blocking can be
significantly reduced. However, video transmission would
still not be possible and digital switches are expected to

be used only with long distance communication. The

68

advantages are that users would be billed on the number of
bytes of information transmitted and received on a digitized
system, rather than by the minute, plus a dedicated line
would not be necessary for communication, reducing the load

on the system.

Packet-switched networks are a fairly recent
advancement. in long distance communication services,
providing more accurate and less expensive data
communications. Terminal or computer-generated packets of
information containing up to 1024 ibits are individually
transmitted through a "store and forward" procedure. The
communication link is dedicated, but the network can be
shared by many users. Each packet of information will have
an address, along with a code indicating the size of the
packet and the number of packets per message. The receiving
equipment will require buffers to store and queue the
packets of information; but, to users the system will appear
to be a point-to-point connection. Packet switching is most
efficient when low to medium volumes of data are being

transmitted.

69

User Terminals

 

In developing a terminal, both technological and user
requirements have tx> be considered (Handler, 1982).
Technological concerns include:

Network Interface:
transmission speeds, one-way (n: two-way

transmissions, ease of access and equipment
costs.

Information Display:
format, graphics, color, voice? hard copy?
motion? and cost.

Processing Capacity:
programmable versus built-in programs, type
of terminal (dumb or smart) and costs.

Storage Capacity:
memory, access times required, read only
versus read-write and cost.

Users primary interests lie in the following:3

1. Control over the time of display.

2. Fast access and display times, under three seconds per

page would be a descent objective.

3. Brown, H. 6., ”Implementing Videotex Standards: A
Comparison of CEPT and PLP," paper presented at Videotex '82
in New York, June 28, 1982, p. 4.

7O

3. Terminals which hook directly into television sets.

4. Ability to access a variety of different databases.

5. Respectable graphics and a low transmission error

rate.

6. Low equipment and system usage costs.

As mentioned previously, a user terminal can be either
a transponder or transmitter type, addressable or
nonaddressable, intelligent or dumb. For Viewdata, it will
be most compatible if terminals have enough memory to hold
several pages of information. Also, the terminal should
interface TV sets via either the RF antenna or RBG (red,
blue, green guns on color tubes). Using a keypad input
system rather than an alphanumeric keyboard will result in a
trade-off between cost and user convenience. However,
before system operators decide to provide less costly
keypads in hopes of increasing Viewdata penetration, they
should remember that a keyboard input system will be easier
to use, increasing system satisfaction and reducing
disconnect rates from user frustration in the long run.
Analogous to this are the recent problems of Texas

Instrument, which can be attributed to a decision to forego

71

selling service functions and attempt to sell home computers

on the basis of price.

Other input considerations include graphic input, aural
input, video input and sensory input (detection alarms).
While text may be the dominate data transmitted upstream
over videotex systems, it would be a fatal error to rule out
the potential of any of the above mentioned attributes in
making or breaking videotex in the future. With the advent
of teleconferencing, graphic conferencing and voice
conferencing, the ability of a system to handle and a
terminal to input video and voice data could be crucial to
system survival (Brown and King, 1982). So, when discussing
user terminals, it is necessary to include input devices
such as a joystick (games), a light pen, speech recognition

devices, sensors and still frame cameras.

Chapter III

VIDEOTEX SERVICES: WHAT WILL THE CONSUMER GET?

Trends in Society

 

The evolution of videotex will not be totally dependent
on the whims of consumers. A major thrust aimed at gaining
acceptance will come from the business sector--banks and
retailers in particular. Just about any service industry
that is labor intensive can benefit from a videotex system.
The three areas that will provide businesses with the
greatest cost savings will be in the automation of
transactional processing, messaging and information
retrieval. A study by the author found that a videotex
system (closed-user group or local area network) that stores
a company's essential data an: their employee's fingertips
will save that company up 1x3 50% in storage space, reduce
file and retrieval time by In) to 80%, reduce the clerical
staff by 25% and save the company 50% to 65% in paperwork

related expenses. Messaging would reduce the time and

72

 

73

expense spent on communications by some 33%, while
increasing office productivity and eliminating intrusive
interruptions. Lastly, transactional processing within a
company, which is manual labor oriented, can be automated,

resulting in substantial labor savings.

Likewise, it will not be videotex directed solely at
serving the business sector that guarantees its emergence
into our society. As mentioned, banks and various retailers
will push the technology onto consumers in order to benefit
from its cost savings (Bartlett, 1981). Bankers have already
begun to initiate the practice of providing free or low cost
decoders to their customers to take advantage of the cost
savings (Haslam, 1982; Kent, 1983). The: major" advantages
bankers and retailers will point to in rationalizing
videotex is the resulting higher margins earned (at least in
the introductory stage of the technology) from reduced labor
costs, the reduction or elimination of inventories and
thefts and the overall convenience of the technology in

providing improved customer service.

Still, it is possible that the introduction of videotex
will fizzle if consumers reject the benefits of this
technology. For that reason, it is important to analyze the
current trends in consumer behavior and society to see if

the benefits of videotex mirror the future needs of

7h

consumers. As Victor Hugo once said,

”Nothing in this world is so powerful as an
idea whose time has come."

The trends that are shaping our society today seem to
point towards the need for a service like videotex. For
instance, there is a growing desire for people to do more at
home, and thus the home is becoming the focal point of
people's lives.1 An offshoot of this is a reduction in
migratory habits; people are opting to remain residing and
working in familiar and secure surroundings. This has to be
balanced against the need for people to settle in areas
where jobs are available. Still, videotex allows people to
do more at home, whether it be work, entertainment,

education or communication.

A second trend is the changing make—up of the home.
According to the 1980 census, in the years between 1970 and
1980, the number of single person households has jumped from
19% to 26% of all U.S. homes. In that same period, the
number of households headed by a female increased from 11%
to 15%. There has also been a substantial increase in the
number of two-working-parent households (with the working

female being exposed to automation in the work place). The

1. "Five Trends Aid New Media," Advertising Age Electronic
Media Edition, June 24, 1982, p.4.

 

 

75

working homemaker now has a dual role to play and will need
assistance to accomplish many of the time consuming
household chores. Other demographic changes to be
considered include the growing elderly population, the
emergence of a substantial Spanish speaking population and

the recognition of the rights of handicapped individuals.

A third trend is the fact that consumers desire and
will seek (nu: greater' amounts of jproduct information to
reinforce their purchase: decision: the emergence of the
"smart shopper".2 Parallel with this is the growth of

consumerism and the belief that the seller should beware.

Another change occurring is that people are seeking a
wider range of life styles and with this, a desire for
better product values and excellence in workmanship.3 A
greater emphasis is put on leisure time activities and
people have the discretionary income and credit to spend in
the pursuit of leisure activities. Tied into this trend is
the consumer's growing need for immediate gratification,
with satisfaction resulting more from completing a purchase

than from the actual use of the product.

2. Ibido' p.140

3. Ibid., p.14.

76

A fifth trend spotted. is a reliance by people on
communications to solve their problems.4 Moreover, in the
marketplace, consumers are less willing to deal with hard
sell unknowledgeable salespersons, and instead, rely on less
personal relationships to accomplish their shopping needs
(e.g. mail and telephone). Most likely, this desire of
consumers has led to the substantial growth of mail order

business in the United States today.

Also, people are becoming pro-technology. The plethora
of computer advertisements, promotions and articles have
conditioned consumers for the onslaught of computer-related
services that will evolve in the next few years. In fact,
with people becoming familiar with new high technology
devices in both the home and office, the complexity problem

associated with using a videotex system should be minimal.

A seventh trend that will suit videotex service
providers nicely is that people in general are becoming more
time-oriented than cost conscious. People in the
mid-to-upper income brackets will gladly pay for services
that eliminate the boring and tedious chores that drain them
of precious time and energy. This becomes especially true

in households with two wage earners or those with only one

4. Ibid., p.14.

77

parent where a premium is put on time spent relaxing.

Three other trends also deserve mentioning. One is the
increasing need people feel for security; security from
crime and preventable accidents like fire. Another is the
concern for energy management in the home and on the road.
Related to both of these trends is that the 1980 census
shows that rural America is growing faster than metro areas
and the suburbs faster than central cities. The
implications of this are that either consumers will have to
travel farther to do their shoping or retailers will need to
branch out their operations into rural America. Both of
these alternatives are inefficient for the consumer and the

retailer.

So, what benefits will videotex services provide to
consumers? Most importantly, videotex will eliminate some
of the tedious tasks required in today's society that few
enjoy. This includes having to run out to the bank before
it closes Friday afternoon, shopping only for
non-prestigious items like socks and tires and relying on a
travel agent to find the earliest flight to Katmandu. It is
also the perfect medium to satisfy the growing need for
information in America. Videotex will also provide the extra
educational opportunities children need and that their

parents want their children to have. Plus, having a

78

videotex service will satisfy American's societal need for
status--the venture One experiment had residents of
Ridgewood, New Jersey lining up to get on-line. And all of
this is provided in a single package, neat and clean just as

Americans like it.

As for videotex's shopping and banking benefits, it
will reduce the amount of travel time people spend, with a
corresponding reduction in transportation expenses.
Videotex also offers peopLe an extensive product selection
capability from one place and at one time, and more
importantly, the monthly billing for services rendered is
not immediately felt by the user. While videotex's
transactional services benefit shut-ins, it also means
anyone can shop at their own convenience with no concern for
store hours, inadequate or crowded parking, the weather,
in-store congestion during peak hours, long checkout lines
or shopping fatigue. Videotex also makes product and price
comparisons simple and allows consumers to access the amount
of information each needs to make a decision. Moreover,
with the cost savings manufacturers and retailers will
incur, consumers can expect a subsequent reduction in

prices.

79

The Services

The value of videotex will be in its ability to unify a
multitude of communication services into one system which
users can access and use without any difficulties. In other
words, system operators will need to provide an electronic
supermarket of communication services designed to satisfy as
many business and consumer needs as possible. However, to
be successful, these services must be an improvement on
services currently available, or a new service filling an
unmet need for a substantial population or a substitute for

some service currently offered.

While the number of services that can be provided
either locally or through a gateway is unlimited, the total
audience is not. Videotex services will need to fight for a
piece of the media pie. The situation is analogous to that
faced with cable programming today: entertainment viewing
has not increased substantially due to cable services,
rather cable has taken away portions of the entertainment
pie that movie theaters and the TV networks had previously
held. Videotex operators must prove to consumers that their

services are better than those presently available so that

80

consumers will allocate their information search, shopping,

banking, messaging and computing hours to videotex usage.

The major variables that will be used by consumers to
evaluate videotex services include cost, utility,
convenience, ease of use and reliability. Three other
important factors are the timing of service introduction,
the opportunity for people to experiment and become familiar
with a videotex system prior to purchasing services and the
technological capabilities required (Ducey and Yadon, 1982).
Like the telephone before it, the fears and apprehensions
people have for this new technology will disappear with
improvements in system design. There are five general
categories of services, all of which will be discussed in
the following chapter. The categories are information
retrieval, transactions, messaging, computing and
telemonitoring. For this discussion, the. major' emphasis
will be on the services provided for the home consumers,

though most are applicable in the business environment.

81

Information Retrieval

Information retrieval requires either a touch-tone
phone, numeric keypad or keyboard to order up desired
frames. Also, a modem or decoder may be required, depending

on the videotex system design.

This category has the broadest range of possibilities,
with services ranging from news to education to advertising
to pay—per-view TV. System operators and IP's need to
develop software that is imaginative and useful, while not
being overly complicated to work with. The content of the
services will include more than straight information/news
oriented material, in fact a major application of
information will lie in providing users with self-help

services.

As the plethora of self-help publications recently
available point out, this area of information retrieval is
almost boundless. If the service is beneficial to the user,
then it will be accessed by many subscribers. For instance,
home repair and automobile repair could be very useful

services and offer advertisers the opportunity to sponsor a

82

service that millions of system users could access time and
again. Other interesting applications could be in the area
of improving family life (since the home is becoming a focal
point of society once again), improving ea person's mental
capabilities (e.g. educational programs or quizzes), skill
development, value development and financial and health

monitoring.

The Viewtron experiment, carried (nu: by Knight-Ridder
and AT&T in 204 Coral Gables, Florida households, reported
that 12 of the 14 most popular categories were information
oriented. It should be noted that security and energy
management services were not offered in the experiment and
that both computing and messaging capabilities were severly

limited. The order of service popularity were as follows:5

1. News

2. Bulletin Boards

3. Local entertainment and events

4. Food and dining

5. ”Key VIEWTRON Test Results: All Systems Go For Launch,"
The Viewtron Newsletter, June 28, 1982, p.5.

 

83

5. Education

6. Consumer information

7. Shopping

8. Games and quizzes

9. Sports

10. Health and medical information

11. Travel

12. Money management

13. Home

14. Automotive

An interesting potential of videotex is hybrid

services, which combine the technologies of two or more

services. For instance, a medical information service could

be sponsored by a pharmaceutical company, providing

information on various ailments and their cures. It could

also provide a means by which users could purchase necessary

84

medical supplies through the videotex system, though filling
prescriptions could create some legal and ethical problems.
A system could also provide a means for direct messaging
between doctors and patients. Also, an emergency medical
button that would notify an ambulance service of a user
needing immediate assistance could be included. Similarly,
the Venture One test had auto-dial capabilities where a
viewer could be connected with a retailer by phone at the
touch of a button. Furthermore, users could download
medical software into their personal computer which assists
them in evaluating their physical fitness or software that
keeps track of a diabetic's diet. An imaginative service
package like this offers users the ultimate in utility while
combining the advantages offered by each of the five basic

service categories.

For advertisers, the two most useful videotex services
will be information retrieval and transacting. For
information retrieval, advertising and sponsorships of
information services are two of the ways advertisers can use
videotex. Basically, advertisers can use a videotex service
to further educate interested consumers about their product
beyond what traditional media can accomplish: more closely
examining the differences between it and the competition,
providing alternate or the correct usage of the product or

just reiterating the product's key selling points in more

85

detail. This information would also help to reinforce a
consumer's purchase decision. An interesting possibility
videotex presents advertisers is to interconnect themselves
with their consumers in an open line (messaging) that can be
used for grievances or feedback on product performance.
Videotex advertising will be discussed in more detail

chapter VI.

As mentioned, a pharmaceutical company could sponsor a
medical information service or Budweiser could sponsor a
sports scoreboard. It will be the advertiser's dollars that
make it possible for many of the information services to
operate because consumers, while finding the information
helpful, would likely be apprehensive about paying for
something offered free by a local library or that can be
found in the newspaper. The key to developing a successful
videotex system will be in discovering exactly what services
consumers will pay for and what they expect to receive free
of charge or at least pay for in one small monthly charge.
On a cable system, videotex could become a nested tier
service like the other cable programming offered on a tier
basis. While developing the accounting software for this
system could be quite a headache, the financial incentives

to system operators and IP's is readily apparent.

86

Transaction Services

Touch-tone phones can input the necessary information
needed to carry out an electronic transaction. An
alphanumeric keyboard with at least 40K of memory' will
provide the best graphics. With 40K of memory, a keyboard
will accept and display geometric graphics which are nmme
aesthetically pleasing to the user. Also, with a keyboard,
it is easier for consumers to special order their
merchandise or to communicate special instructions to

another party.

In this section, two types of transactional services
will be discussed: home shopping and home banking. Both
services offer advantages to the users and marketers, making
them likely services to be provided on every videotex
system. The chief attraction of transacting capabilities is
convenience, though consumers can expect economic advantages
due to the savings in overhead experienced by businesses

offering their products via transactional services.

87

Home Shopping

 

This category can. be subdivided into two different
services. First, there are "buying services" which require
little or no shopping. The purchasing of tickets or the
making of reservations are the primary applications. In the
Viewtron test, Official Airline Guides, Inc. experimented
with putting their airline schedule on-line so consumers
could prepare their own travel itinerary. The opportunity
for consumers to directly make their own reservation would
be an obvious extension of sports, theater and restaurant

advertising.

The second shopping category is "shopping services"
which require users to search out various products or
catalogs listed in a system. Services as diverse as
off-track betting and spiritual assistance fit in this
category too. An interesting observation from the results
of the Viewtron test is that consumers are more likely to
purchase products via videotex which are lower risk items,

at least in the introductory period of the

88

service. The specific purchase intentions listed are:6

HIGH RISK
- 8 percent for major purchases, such as
furniture and refrigerators.
- 24 percent for soft line items, such a
groceries and clothes.
- 34 percent for hard line items, such as
small appliances.
- 34 percent for services, such as
plumbers and florist.
- 46 percent for bargain and sale items
from major retailers.
LOW RISK

In analyzing this relationship) of risk to videotex
shopping, the low percentage of users desiring to make major
purchases can be attributed to more than just risk. Many of
the major purchase items are image merchandise which perform
more than a functional purpose. Since the graphic
capabilities of videotex do not lend itself towards creating
or maintaining a product's image, these products cannot be
expected to sell or even be advertised on a videotex system
until photographit: capabilities are ‘possible. Other

drawbacks in attempting to sell high ticket items on

6. Ibid., p. S.

89

videotex are the expected long delivery times associated
with direct marketing sales (people want instant
gratification), a lack of post-sale service that is also
typical of direct marketing sales and the fact that sales
via videotex do not allow for any social visibility and
prestige a consumer feels from entering a Gucci's or Sak's

Fifth Avenue.

During the 14 month Viewtron test, almost 1000
purchases were transacted via videotex with 139 of the 204
households making purchases. The average expenditure per
household ordering was $68.7 Unfortunately, no data was
available on the timing and growth of expenditures for
products as the test progressed. On the topic of
interactive ordering' at.'Videotex '82, Bill Waites, Vice
Chairman, Stone & Adler, listed the four most ordered items
on Prestel: leaflets/brochures by 87% of the system users,
goods 40%, entering contests and sweepstakes 59%, hotel and

travel reservations 23%.

Marketers can use home shopping to either make sales
directly to consumers or to generate traffic in stores
carrying their products. The potential for co-“‘Sop

advertising is increased by the advent of videotex as a key

7. Ibid., p. 5.

90

information medium. Videotex will also allow for more
effective segmentation of markets due to the types and
amount. of data that. can. be (assimilated. on system ‘usage
behavior. Better segmentation and 13m: direct interaction
with consumers can lead to greater reliance on impulse
buying and possibly lead to the ultimate in capitalism:

production activated by direct order from the consumer.

The combination of advertising and home shopping is a
natural for direct marketers. The impact of videotex on the
marketplace should be very interesting. The main question
to be answered is: What will happen to prices when consumers
are able to compare retail stores--or better yet, have an
intelligent terminal compare for them--for the lowest prices

in town...or the nation for that matter?

As Steiner's Dual—Stage Model implies, consumers armed
with all the necessary information to make a purchase
decision and who are ready to buy have only one decision
left to make--where to buy the product. This decision is
typically made on the basis of price, and from the
information they have gathered, consumers have a good idea
as to what is a fair price to pay. 80, it would be expected
that all retail outlets for a particular product (at least
for high demand items that generate traffic) would be priced

the same.

91

It does not take much imagination to see the potential
for price wars due to videotex where a retailer will
sacrifice profits from the high demand products to gain
store traffic, then make his profits by selling other low
demand items at higher prices. If this becomes the case,
then those retailers with the lowest overhead will survive.
But, what will happen if manufacturers or wholesalers decide
to bypass retailers and sell their high profit goods
directly to consumers? And, what will happen if consumers
decide to purchase only the lowest priced items from each
store? It is possible that an entirely different
distribution system will develop similar to that of direct
response methods currently used: one where retail outlets

become specialized in a particular product line.

As with direct response advertising, retailers will be
able to use videotex to re-attract lost customers, retain
current customers and to expand their geographic and service
base. The problem will be in uncovering the strategies that
will accomplish these goals. The advantages local retailers
do hold over national or regional distributors interested in
forward integration through videotex are that consumers are
familiar with them already and that home shopping will never
totally replace the social interaction of in-store

shopping. Retailers may also need to better serve customers

92

after the purchase in the future, or before the purchase for
that matter, to create store loyalty. For example, besides
product, price and store information, local retailers could
make it possible for shoppers to find out iifaa product is

available prior to leaving home.

The future of the discount store could be in doubt if
videotex penetration levels reach those of telephones or
televisions. Manufacturers generally do not care to have
their products sold through discount stores if they are
selling well at the regular price because of the loss of
control they experience over pricing. It does not help
their relationship with their retailers who charge the
suggested price for the products either. To eliminate the
problem of discount stores, manufacturers could offer their
surplus products via videotex at a lower price than that
charged in discount outlets. Consumers who would normally
shop the discount store (assuming that these customers would
also be videotex users) could then buy the product cheaper
interactively and not have to be seen in a non-prestigious
store. Again, the potential for a co-op arrangement between
manufacturer and local retailer is very good. In exchange
for eliminating the local discount outlets, the manufacturer
could have the retailer handle all interactive sales in a
local area. This accomplishes two things: it sells the

product for the manufacturer at a higher price than

93

wholesale and it creates a relationship between consumers of
the product and a local store where the product can be
purchased, thus creating the potential for greater in-store

traffic.

The acceptance of home shopping will grow as people
become familiar with ‘videotex services. At the present
time, this service is too foreign to the behavior patterns
of most people in society to expect instant adoption.
Adoption will be quickened by the acceptance of teletext
systems and by consumers realizing that all the great stores
can be shopped without having to travel to the four corners
(of the world. Home shopping will also need to be made into
a. "fun" event in order to gain and keep consumer's
attention. It. must. be remembered that services geared
‘towards entertainment succeed far more times than do
task-oriented services. So, care must be taken from the
‘very introduction of videotex to market home shopping in the

‘proper vein.

Home Banking

 

At Videotex '82, Bill Cornfeld, Director of Electronic

91+

Information Services, Chemical Bank, outlined four forces
that were responsible for the changes occurring within the
banking industry. These forces were the deregulation of
interest rates, increased operating expenses, new forms of
competition in the industry and the bank's inexperience with
the pricing of services like checking that was once offered
as a free service. Each of these four forces point to a
need for a better communication service between banks and

their customers.

When interest rates are completely deregulated on March
15, 1986, bankers will already need to be in position to
offer customers competitive rates that. will attract new
deposits and be able to make up for the revenues lost due to
deregulation. One way for this to happen is to decrease the
high operating costs associated with the labor intensive
services now offered by banks. This means reducing the
number of employees, supplies and physical locations needed
to handle business. However, since banks are looking to
grow, geographically and by product line, they must be able
to expand without increasing in physical size in order to
lower operating costs. Getting involved in Viewdata systems

is one way for banks to accomplish this growth objective.

Offering interactive home banking will also give banks

a competitive edge over the growing competition for the

95

consumers discretionary income. Banks will be able to offer
more specialized and sophisticated services, even services
designed for a: specific individual, which customers desire
even today. Also, interactive banking will allow the
working couples, shut—ins, the elderly and people residing
in high crime areas the opportunity to do their banking

conveniently.

The attraction home banking has for any viewdata system
is that it can act as a foundation to enhance other
services, like home shopping, while also subsidizing part of
the costs of providing the service. For example, Banc One
in Columbus, Ohio, is offering an interactive service to
area residents for $7.50 per month and Chemical Bank's
Pronto interactive service will be offered for about $10 per
month. Without the bank subsidizing the service, prices
would be higher as in the Viewtron system where users are
expected to be paying $12 to $15 per month for the viewdata
service (not including telephone connect and terminal
purchase costs). It appears that it will be the major
banks-~Citibank (Home Base), Chemical Bank (Pronto) and
Chase Manhattan Bank (Chase Home Banking)-—who will absorb
this initial cost of providing home banking services in

exchange for gaining customers in the future.

To accommodate the needs of potential viewdata users,

96

banks must evaluate the demand consumers have for instant
information about accounts, balances and bank hours and how
home banking will fit in competitively’ with what other
financial services offer consumers. Banks will also need to
develop a system with high security levels to assure users
that their accounts cannot be tampered with, or at least
insure their money if someone is able to access and alter
account information through the system. The potential for
inter- and intra-bank communications must also be evaluated
carefully in order to find the value of an interactive

system to the banking industry.

The services that are or will be offered via home
banking include bulk payment services aimed at servicing the
needs (ME small businesses (e.g. payroll, income statement
and balance sheet preparation) and single payment and
reconciliation services (Sutherland, 1982; Tydeman,
Lipinski, Adler, Nyhan and Zwimpfer, 1982). What individuals

will be offered include:

- Electronic checkbook for interactive purchases.

- Electronic fund transfer.

- Electronic credit cards or smart cards.

- Bill payments.

97

- Travelers check ordering.

- Balance inquiries and reconciliations.

- Information about the bank, loans and rates of interest

and certificates, possibly even in comparison with

other banks.

— New account applications.

- Home budgeting assistance.

- Cash management and financial planning information,

such as cash flow programs and portfolio analysis.

- Commodity reports.

- Tax planning assistance.

People will not buy viewdata services just to pay their
bills, so the introduction of all these services is
necessary to make home banking a success. Banks will also
need to overcome the fact that interactive banking
eliminates the float period consumers enjoy with traditional

checking and that videotex actually penalizes a user.

98

Within the bank itself, the problem of an initially low
transaction volume will make home banking unprofitable in
the short run. The other main disadvantage to be settled is
with the security' problems that must. be carefully

controlled.

The advantages offered tar home banking include
convenience, time and transportation cost savings, safety
for people banking in high crime areas and accessibility to
various financial services. One favorable attribute of home
banking is that it is not as frightening to consumers as
computers seem to be, possibly due to the acceptance of
EFT's. Home banking is the natural progression of banking
innovations: branch offices, drive-thru tellers and
automatic teller machines. Also, home banking is adaptable

to viewdata systems using either cable or phone lines.

For bankers, home banking will reduce costs
substantially and allow them to compete against other
financial services for consumer's money. In fact, home
banking could reduce by half the banking industry's expected
total handling and processing costs of $80 billion dollars

8

in 1990. Videotex banking is also relatively inexpensive to

set up and operate over the long run. The software is not

8. Kent, Catherine. "High Interest in Home Banking," ‘EQ
World, May 1983, p. 69

99

very complicated to use, which is also an advantage for
consumers. Moreover, a major benefit to the banking
industry as a whole will be the capability to communicate
information on urgent business, such as "hot" checks, to all
banks and retail outlets connected to videotex systems

across the country.

100

Electronic Messaging

Electronic messaging, or electronic mail, is the
delivery of a document or message from one point to another
by electronic means. An alphanumeric keyboard is required
to input messages until voice recognition systems are
developed, though numeric keypads can be used to send
preformatted messages. Combining this capability with store
and forward technology enables a user to substitute both
overland mail and. direct. dial telephone with electronic
mail. Store and forward capabilities in either the textual
or voice mode will eliminate the need for recalls when the

desired party cannot be reached.

There are many types of messaging formats that will be
available. Point-to-point personal correspondences allow
two parties to interact electronically. Point-to-multipoint
allows the sending party to distribute his message to
numerous parties at various locations and is a way for
closed-user groups to interact with each other. A community
bulletin. board service enables users to place and read
messages meant for everyone in ‘the community. Computer

conferencing (teleconferencing) provides for the

101

distribution of textual and graphic data between interacting
parties and when combined with audio and visual
transmissions becomes a substitute for traditional meeting
procedures. Two other messaging formats are those forming a
local area network within a business establishment and that

used by Qube, which is on-line polling.

The two Ibasic advantages electronic messaging’ holds
over other forms of communication are that it is less
expensive and more convenient to use (Brown and King, 1982).
It is also possible to have the reception of messages
acknowledged so that the sender is assured his message is
received by the intended party. Moreover, it becomes
possible for hard copy records to be made of textual

conversations to be used for later reference.

Electronic. messaging also provides users with the
ultimate in communication--the ability to send and receive
messages 24 hours per day and at one's own convenience with
no regards to time zone differences. Telephone tag and
intrusive phone calls can be eliminated, which should make
the office environment more peaceful and productive. By
indexing the incoming messages, users will also be able to
access only the messages they wish to read, reducing the
problems of electronic ”junk" mail and mail from undesirable

parties.

102

The disadvantages of electronic messaging are that very
little testing has been done in the consumer area. The
Source and CompuServe both offer messaging, while the Times
Mirror experiment found messaging to be one of the most
desirable service available;9 but the penetration level of
this service is basically nil. This means that very few
people can presently communicate with each other
electronically, decreasing the value of this service until a
significant portion of the population is wired for service.
Also, in situations requiring immediate response, electronic
messaging proves to be inadequate. Lastly, business
executives and consumers will both need to sharpen their
typing skills to make electronic messaging efficient and fun

to use.

Electronic messaging' will not replace many
socially-oriented calls. Plus, its utility will be judged
by its ability to improve productivity beyond that of
available modes of communication. For instance, advertisers
can establish a means by which consumers can interactively
give feedback on various products or ask assistance in the
use of a product or complain about services rendered. If

users do not neglect electronic messages, this may be an

9. "Games rank first (n1 videotex list," Advertising Age,
March 31, 1983, p. 8

 

103

excellent medium by which to send reminder messages to
consumers on unpaid. bills, yearly' maintenance needed on
equipment or to alert a retailers best customers of upcoming

sales.

109

Computing Via Videotex

Through either one-way or two-way transmissions, it is
possible for videotex users to enjoy the luxury of accessing
and working with a wide range of computer software. This
software can be used for entertainment, education, training,

business application or self-help.

There are two ways that software can be used on a
videotex system: down-loaded or remotely. If the consumer
has an intelligent terminal with 64K of memory and some type
of local storage capability, then he can have programs sent
directly to him through the videotex system. Basically,
software is transported from a mainframe computer to a
microcomputer. Upon a users request for a particular
program, the software's content is transmitted in digitized
form either via cable or in the broadcast TV's signal at
2,400 bits per second. Once the program is received and
loaded into the terminals memory no other transmissions need
to take place. The user can use the program as if it were
his own software. However, the problem with this method of

computing is in protecting the copyrights on software.

105

In remote computing, a two-way interconnection between
the user and the database computer must be held. Basically,
this will be a timesharing service like that of the Source
and CompuServe. There is no need for local memory or storage
and a numeric keypad can input all the necessary commands if
the database computing service is set up in a menu format.
Remote computing will overcome the problem of copyrights
since the software never leaves the database computer, while
still offering the same service to users. Transmissions can
be sent at 300 bits per second so either telephones or cable
links can be used. The main drawback of remote computing
will be its cost. With the dedicated connection required,

the communication link costs alone could be substantial.

Whichever method is used to provide a computing
service, the value of this videotex service cannot be
underestimated. Not only' will it provide a method for
marketers to sell various services to consumers (e.g.
education, training), but. the 'utility of such. a service
could ‘very ‘well decide ‘whether videotex survives in the

long-run.

In the early stages of videotex evolution, the
entertainment services--such as games and quizzes--will help
to attract users, especially among children. And if it is

the younger generations who will ultimately decide the fate

106

of videotex, then it becomes doubly important to attract
children early in their lives. Also, the fact that parents
will not have to purchase new game cartridges every few
months when their children become bored with the games they
already have will be a large enough economic incentive for
many parents to purchase a videotex service. In fact, in
the Times Mirror test, 79% of the users considered games as
the essential service of the videotex system...the most for

any of the services offered.10

From using games, consumers will soon discover the
value of educational programs, business assistance programs
and whatever else is offered. The educational possibilities
for in-service training, educating the handicapped who
cannot get out of the home and for supplementing or
replacing traditional methods of educating children and
adults are tremendous once any human factor problems are
settled (Elton, 1980). It will also be possible for users to
create their own software, store it in the database computer
and sell it to others on a per use basis (Bergland, 1982).
The range of services provided by a computing service on a
videotex system is only limited by the required consumer

hardware and the imagination of the programmers.

10. Ibid., p. 8.

107

Telemonitoring

The application of home security and energy management
services by a videotex system is another way of introducing
the total videotex package to consumers. And, when combined
with information retrieval, transacting capabilities,
messaging and computing, provides the businessman and
consumer with a service that fills the needs of just about

everyone in one way or another.

To provide telemonitoring will require establishing a
dedicated line between the database computer and the
subscriber. The database. computer' can then scan remote
subscriber terminals every few seconds. If the terminal
detects an alarm or is programmed to change the atmosphere
of the home at a certain time, then it alerts the database
computer. From there, the computer can recheck the alarm by
automatically dialing the subscriber's phone number and also
notifying the proper authorities. This service can be
invaluable in savings lives and property by detecting any
disturbances at the earliest possible moment, even when no

one is home or awake (Baldwin and McVoy, 1982).

As for energy management, the cost savings alone will
be enough of an economic incentive for both consumers and

city governments to purchase telemonitoring services. In

108

the home, energy levels can be preset to coincide with needs
so that temperature changes can be automatically regulated
or that the dishwasher turns on late at night when energy
usage rates are lower. For the local government, better
control over vandalism and theft of energy monitoring
equipment can be provided. Meter reading can also be
accomplished from the headend, reducing labor costs

significantly.

Telemonitoring accomplished over cable or phone lines
is a relatively new service to many communities. Yet, the
value of security is increasing each year and studies
(Price, 1981; Baldwin and McVoy, 1982) have shown that homes
protected by interactive security systems are significantly
less affected by crime or damaged by fire than non-serviced
homes. The introduction of telemonitoring will be slowed by
high installation costs; but the profits for system
operators are very good so they will most likely attempt to
cash in on this service in the early stages of the evolution

of videotex.

Chapter IV

PRIVACY AND CONSUMER PROTECTION

Every new product or service has some amount of impact
on society. The hope is that the impact will all be
beneficial, but rarely is this the case. Therefore, it is
necessary to analyze the consequential issues to determine
what affect innovations will have on society. For videotex,
the issues are many (Talarzyk and Widing, 1982; Tydeman,
Lipinski, Adler, Nyhan and Zwimpfer, 1982) and for
advertisers specifically, there are two issues of concern:

consumer privacy rights and consumer protection.

The following chapter will briefly outline the privacy
and protection issues, which have become topics of debate as
of late. However, it should go without saying that both
concerns over intrusion of videotex user's rights and
consumer protection could become non-issues very soon.
Videotex may need advertising to support it, but it will be
the consumer's subscription to services (and not cancelling

services after a couple of months) which will make or break

109

110

the technology. It is in the best interest of system
operators to appease any fears consumers might have about
their rights being violated. Moreover, the impetus
initiated by the state of Wisconsin (Westin, 1982) in
protecting videotex subscribers has set a precedence for
other states to follow. As for consumer protection,
advertising guidelines established for other media, and the
advertising industry in general, could just as easily cover

videotex advertising.

The Privacy Issue

 

Videotex and two-way interactive systems (e.g. Qube)
have the capability to collect extensive data files on every
household connected to the service. This includes,
depending on the types of services subscribed to, records on
a household's financial situation, purchasing patterns,
energy usage, security systems, political persuasion and so
on. Much of this data must be collected in order to allow
users the convenience of shopping and banking at home, to
save them money by reducing their energy bills or to even
increase their safety. However, from the aggregation of all

these records, numerous negative benefits are possible:

111

financial records can be electronically tampered with,
marketers can "junk mail" potential customers 1x) death or
criminals can easily discover an individuals daily patterns

for when they are and are not home.

Nash and Bollier mentioned four ways in which privacy
rights can be violated.1 Intrusion, either by electronic
surveillance or by the polling of alarms, is one manner in
which rights can be violated. Another is through the
interception of information. by' eavesdropping parties. A
third way is by the misuse of collected information. The
last way is through the aggregation of information into a
demographic or psychographic profile of individual
households, which is then shared with or intercepted by

third parties.

It became evident that something had to be done to
protect citizens from the potential abuses misuse of
information could bring about. In 1972, the Privacy Act was
enacted to protect individuals who had identifiable records
kept on them by federal agencies. Then Secretary of Health,
Education and Welfare, Elliot L. Richardson, had a study

commissioned to explore the impact computers would have on

1. Nash, Deanna C. and David A. Bollier. "Protecting Privacy
in the Age of Hometech." Technology Review, August/September
1981, pp. 68-70.

 

112

record keeping of individualized files. The findings
indicated individuals had no control over the use of their
own records and technologies had failed to provide a means
for protecting the individual from the undesireable
consequences recorded information could create (Privacy Law
in the States, 1977; The Privacy Act of 1974: An Assessment,
1977; Technology and Privacy, 1977). The resulting Privacy
Act incorporated eight principles to correct this problem.

The principles are as follows:

1. The Openness Principle--no personal-data record keeping

 

system can exist in secrecy and the record keeping policies,
practices and system shall be open to inspection.
Furthermore, federal agencies cannot conceal the existence
of any such secretive system. This principle brings record
keeping organizations under public scrutiny and increases
public awareness of the fact that information files do
exist. Federal agencies are ruwv required. to list their

practices annually in the Federal Register notice.

 

2. The Individual Access Principle--anyone who has a

 

personal data record kept on themselves which identifies
them in some way has a right to see and copy the information
on that record. This is important in that it safeguards

individuals from record errors, considering a person would

113

actually go through the trouble to check his record.

3. The Individual Participation Principle--an extension of

 

the Individual Access Principle, this gives anyone with a.
record kept in their name the right to correct false
information. The burden of proving a record false is with
the individual. In 1976 alone, $36.6 million was spent by

. . 2
government agenCies on correcting records.

4. The Collection Limitation Principle--this puts limits on

 

the type of information organizations can collect and states
certain requirements which must be nm¢::h1 data collection
procedures. Basically, information.cxn1 be collected if it
is relevant and necessary to accomplish a lawful purpose.
The information must come from the individual too, no
secondary data is acceptable, reducing the ability of

different agencies to share data records.

5. The Use Limitation Principle--there are limits on the

 

internal use of personal-data record information within a

record keeping organization.

6. The Disclosure Limitation Principle--there are limits on

 

2. The Privacy Act of 1974: An Assessment, The Report of the
Privacy Protection Study Commission, Appendix 4, July 1977,
p. 76.

 

114

the external use of personal—data record information within
a record keeping organization. This requires agencies to
print an annual notice stating the use of records in a
system, including categories of users and the purpose of
such uses. A better system of accounting for record use has
resulted and thus, a corresponding decline in the amount of
information released. Specifically, this has reduced the
ability of the news media to obtain information on

individuals.

7. The Information Management Principle--the record keeping

 

organization is responsible for establishing proper
information management policies and practices, which assures
that the collection, maintenance and use of personal
information is necessary and lawful and that the information

used is both current and accurate.

8. The Accountability Principle-~the record keeping

 

organization is accountable for its policies, practices and
systems in regards to record keeping. Like the Information
Management Principle, agencies are given an incentive to

keep their collection and storage procedures up-to-date.

The Privacy Act was geared more for government
agencies; however, the principles contained within it were

also meant to lay a foundation for information collection

115

procedures in other situations. The emphasis of the Privacy
Act is in establishing the individual's rights in regards to
personal information records, placing the responsibility of
database management on the record keeping organization and
in creating a set of guidelines for a system of “checks and
balances" between individuals and the record keeping

organizations.

Warner Amex Cable Communications followed the example
set by the Privacy Act by developing its own 11-point policy
on maintaining privacy of the information collected by its
Qube system. This company has been the pioneer on the issue
of privacy within the industry by establishing its workable
set of standards, procedures and policies with respect to
subscriber rights. Cox Cable Communications has adapted a
similar set of standards for its INDAX system. However,
like the Privacy Act, the codes established by warner Amex
and Cox Cable have insufficient deterrents to misuse of
information. It may be for this reason that Wisconsin
legislated its own cable privacy act allowing for
first-offense fines up to $50,000 and for $100,000 fines for
additional infractions. In addition, provisions were made
by which individuals injured by information misuse could sue
the offending company for damages. Other states are

following Wisconsin's lead.

116

The major disagreement on the privacy issue is who
should be given the authority to watch over the industry:
the government or the industry itself. The concern is
whether or not the industry can do a sufficient job in
protecting the rights of individuals. Even if the industry
does regulate itself, it will still be necessary for the
federal and lflfii state governments to impose strict
guidelines which are backed with stiff penalties for misuse
or mismanagement of information. The fact that so many
lives could be disrupted by the misuse of information
(especially with the amount of information a videotex system
could collect) is reason enough for the government to at the
very least enact concise and strong laws governing the use
of personal data records. As Deanna Nash and David Bollier
stated, "When privacy is no longer regarded as a universal
political right but instead as a commodity for economic
barter, the door is thrown open for its exploitation".3
Strong penalties are necessary to dilute the cost-benefit
situation which unscrupulous individuals use in analyzing
whether or not it is worth violating another person's

rights.

However, since the federal government has seen fit to

3. Nash, Deanna C. and David A. Bollier. "Protecting Privacy
in the Age of Hometech.” Technology Review, August/September
1981, p. 75.

 

117

let the videotex industry develop privately, then the
"watchdog" function should belong to the industry
participants. The advertising industry has set up a
workable system for regulating itself and there is no reason
why the videotex industry cannot do the same. The
cornerstone of this regulatory system could be Warner Amex's
"Code of Privacy". The 11-point code, while based on the
principles outlined in the Privacy Act, was develOped on the
idea that private corporations needed to provide subscribers
with the benefit of interactive services while "guarding
against real or perceived infringements of their individual

4

rights". The basic points in the "Code of Policy" cover

the following:

1. Subscribers will have the information gathering

functions of the provided services explained to them.

2. The company will maintain adequate safeguards to
insure the security and confidentiality of all

subscriber information.

3. Viewing and user responses will be kept only when

4. Warner Amex Cable Communication "Code of Privacy", 1981,
p. 3.

118

necessary to permit billing and will only be released
when the information is a part of the service provided
(e.g. winner of a: contest). No other individualized
information. will be collected. on services rendered
unless the subscriber is given advanced warning and

given the choice not to participate in the service.

The company can develop bulk data on services for
internal use. Third parties will not have access to
the data until the identity of subscribers is not

ascertainable from the provided data.

The company will only provide information to the
government if legally compelled to and subscribers
will be notified of this action first (Nash and

Bollier, 1981).

Subscribers can examine and copy any information
pertaining to them. Corrections will be made given

reasonable proof is provided by the subscriber.

Individualized information will only be kept long

enough to verify billings.

Subscriber mailing lists will not be provided to third

parties without proper authorization from the

119

individuals on the list.

9. The company will compLy with all federal, state and
local laws pertaining to subscriber privacy and adhere

to any industry codes of conduct.

10. Third parties who provide services to the company are
required to adhere to the Warner Amex "Code of

Privacy".

11. The company will continually review and update its
policies and procedures to keep up with technological

changes.

As was stated before, the protection of subscriber's
rights is in the best interest of the system operators.
Given the authority to enforce an industry code of
operation, there is no reason to believe that the system
operators cannot. protect their subscriber's rights. The
issue may not be on protecting the rights of individuals,
but on educating people as to the implication of data
collections, information storage and the usage of this
information. Given that subscribers can. be educated on
these issues and have control over whether their names are
included on lists sold to third parties, the problems being

associated with videotex violating subscriber privacy rights

120

should be well under control.

As for marketers wanting demographic and psychographic
breakdowns of the households served by a videotex system, it
appears that they will have to settle for aggregate data
that is not household specific. The fact that individuals
are given the right not to be identified in a study or on a
list assures this. Still, some individuals may welcome the
opportunity to receive information from specific advertisers
and authorize the disclosure of their names to pre-selected
companies. Even with only non-specific aggregate data,
advertisers will be better off. Look at what direct
marketers can accomplish by mailing only to certain zip
codes. Data on videotex users can be broken down into even
smaller market areas than what is possible with zip codes,
paving the way for more efficient sales and marketing

efforts.

Consumer Protection

 

The issue of consumer protection has revolved around
two basic items: consumers will have a difficult time

differentiating advertisements from editorial statements on

121

videotex, and videotex may influence users to make purchases
against their will. Actually, the concern is with
protecting‘ consumers from unethical sales practices,
misrepresented products or services (false advertising)
including specified warranties and guarantees and from

impulse purchases.

The first problem Ii; easily treated. Advertising is
any paid form of communication delivered via a medium with
the purpose of selling or creating some degree of awareness
for a product or service. Editorial content is just that,
an unpaid opinion stated by someone or something. The worry
some have is that whomever regulates the technology will do
so without regard for the content. Editorial content is
covered under the First Amendment. Advertising has its own
regulations set up. For the sake of protecting consumers,
the emphasis on any regulation set for videotex advertising
or for videotex content should speak directly to whichever
extremity is to be regulated. To consider all material in a

videotex database as the same would be a mistake.

As for consumer protection, in regards to false or
misleading advertising on a videotex system, many questions
remain unanswered. Also, will cigarette and liquor
marketers be allowed to advertise via videotex? The answer

depends on whether or not videotex is considered a part of

122

television or its own separate medium. What legislative
acts will videotex advertisers be required to abide by?
Obvious acts would include the Clayton Act (1914), the
Wheeler-Lea Amendment to the FTC Act (1938), the Fair
Packaging and Labelling Act (1966), the Fair Credit
Reporting Act (1968) and the Magnuson-Moss Warranty/FTC
Improvement Act (1975). There is also the questions of
substantiation, corrective advertising, restitution.enul so

on.

Before system operators can expect to become
operational and partially supported by advertising, the
answers to these questions must be found. The authority of
the National Advertising Division (NAD) and National
Advertising Review Board (NARB) over any advertising
regardless of the media used is not questioned. The same
holds true for the Federal Trade Commission, which holds
jurisdiction over interstate trade. However, these
regulatory bodies have not yet stated how videotex

advertising regulation will compare to that of other media.

Common sense tells us that where similar cases have
occurred in advertising violations in other media, the
precedent set will carry over to videotex. For instances,
false advertising will be reviewed by the NAD (or some

videotex regulatory agency) and if claims cannot be

123

substantiated, then advertisers will be met with
cease-and-desist orders. Likewise, system operators will
probably have the same liberties granted the television
networks in screening advertisements prior to inserting them
into the system. The problem will be in establishing fair
regulations which protect the consumer while not restraining
trade. Will videotex sales be subject to a float period?
Since information collected by a company belongs to that
company, is it possible that videotex users have no rights
when it comes to the privacy of information identifying
them? The legal issues of videotex are in need of immediate

study.

Chapter V

SURVEY RESULTS: ADVERTISERS USING VIDEOTEX

The objective of the survey was to uncover the desires
and needs of advertisers who already have experience with
videotex systems. Advertisers participating in viewdata
tests were surveyed more so than advertisers experimenting
with teletext and interactive cable. With this knowledge,
system operators can better organize their systems to suit
the needs of the advertisers who will most likely be
subsidizing this technology in the future. Also, with the
results provided below, it is possible to hypothesize on the
course videotex advertising will take, at least during its

introductory stage.

The survey (see Appendix) was distributed to 99 local,
regional or national advertisers having some experience with
videotex advertising. Initial contact was made with each
company or retail store by phone in order to ascertain the
names of the individuals responsible for the company's

videotex experimentation and to let them know that a survey

124

125

was being sent to them. All surveys were then sent with an
explanatory cover letter and a self-addressed stamped
envelope within one week of the telephone contact. After a
three week waiting period a reminder postcard was sent to
all non-respondents asking for their cooperation in
returning a completed survey and making sure that all 99
surveys had been received--six additional surveys had to be
re-mailed. Of the 99 surveys sent, 63 were returned and 39
contained data that was usable. The 24 non-usable surveys
were disregarded because they were mostly incomplete with
only a couple questions answered. The 64% return rate was
considered very good, as was the 39% return rate of usable
surveys given the small population of advertisers who have

videotex experience.

It is important to be aware of the limitations of
surveys, and of this particular survey, when analyzing the
data. Overall, mail surveys generate a lower response rate,
with greater amounts of "no" and "don't know" responses
given than with other forms of data collection. It is also
possible that the wrong person answered the survey (e.g. the
secretary) or that certain questions were misunderstood. A
major limitation of surveys is that complicated issues
cannot be dealt with; and therefore, most of the questions

in this survey used nominal measures.

126

As for limitations of this survey, the low number of
usable responses weakened the validity of the study.
Furthermore, because a reliable source was not always
obtainable, some of the advertisers with videotex experience
did not have surveys sent to them. It is also very probable
that the information that could have been obtained from the
non-respondents would have changed the results
significantly. The newness of videotex technology and a
corresponding lack of 'understanding' people have for its
capabilities, meant that each respondent had the ability to
go into different depths of coverage on what their company
was attempting in regards to videotex advertising. This
problem and the effect non-respondents could have had on the
data limited the internal validity of this survey. Another
problem that will persist in any type of research on the
current videotex experiments is that each test to date is of
a very small scale and does not allow information providers
the opportunity‘ to use services that could be normally
offered (e.g. sweepstakes were not used, yet with a large
audience sweepstakes could be one way to gain frame

traffic).

Since nominal level questions were asked, the
statistics available for analyzing the data were limited.
Frequencies and two-way frequency distribution were the only

appropriate analysis tools used in analyzing this data. The

127

rationale for this is that a majority of the questions
involved open-ended questions requiring the respondent to
give answers that had to be put into distinct categories.
Also, without other survey results to compare this survey
against and with the small number of usable cases, the need
for chi-square analysis was negated. The data was tabulated

using the SPSS program "Mult Response".

The Results: Frequency Distributions

 

As part of the author's agreement with respondents, the
below data will not be linked to any particular company or
individual. The only distinctions made will be between the
product or service lines of the advertisers. The idea
behind this survey was to set a foundation on which others
could expand from; hopefully the results and the following
analysis will stimulate debate and further analysis on the
needs of advertisers. In many of the tables, the "total"
figure is not in agreement with the totals due to rounding

errors.

As Table 1 exhibits, advertisers were involved in tests

of viewdata, teletext and interactive cable. The CBS/AT&T

128

Table 1: Tests Respondents Were Involved In

Count Pct of Pct of

Responses Cases
CBS/AT&T, Ridgewood 35 60 97
Knight-Ridder/Coral Gables 5 9 14
CBS/KNXT, Los Angeles 4 7 11
Times Mirror/Los Angeles 4 7 11
CableShop 3 5 8
Viewmart (Cox Cable) 2 3 6
Compuserve 1 2 3
European Testing 1 2 3
Cablevision 1 2 3
First Bank/Minneapolis 1 2 3
NBC Teletext/Los Angeles 1 2 3

Total responses 58 I00_. I6T_

Table 2: Videotex Services Offered by Advertiser

Count Pct of Pot of

Responses Cases
Information access 23 34 61
Straight advertising 21 31 55
Transactional service 19 28 50
Information processing 2 3 5
Communication service 2 3 5
None 1 2 3

Total responses 68 100 179

129

Venture One test in Ridgewood, New Jersey, was the test most
advertisers were involved with and rightly so since it has
been acclaimed as the most advanced and realistically
organized system in 'the ‘United States. Unfortunately, a
majority of the advertisers on what will be the first
commercially activated U.S. viewdata system, Viewtron (not
including The Source or CompuServe), tended ix) keep their

experimentation plans and results proprietary.

Table 2 categorizes the types of services advertisers
have experimented with on the various test systems. The
most popular service was "information access" which included
providing directories or sponsorship of a bulletin board.
Straight advertising was described as information that was
similar to advertising developed for magazines.
Transactional services involved either home-shopping (direct
marketing) or home-banking. The last two categories were
relatively unused possibilities: communication services,
described as opinion polling or direct contact with
consumers; and information processing services, which was
the sponsorship of quizzes and entertainment or educational
games and could also include computing services.
Telemonitoring services were not considered to be something

advertisers would be involved with.

To date, a wide range of products and services have

130

been advertised on videotex systems. Since participation in
the experiments was not advertiser specific and any company
or retailer interested could be a part of the tests free of
cost, it is interesting to note the average target market of
the products and services advertised. This composite target
market (see Table 3 through Table 11) is essentially
up—scaled: Caucasians 18 to 65 years old with incomes of
over $25,000, primarily white collar or professionals with
at least some college experience, married with children and
living in either a major city or its suburbs. The key to
uncovering the potential for advertising is to compare these
demographics with the demographics of known videotex

subscribers or users.

One of the difficulties advertisers will be faced with
in using videotex is that photographic quality pictures will
not be available in the introductory--and probably the
growth--stages. What this implies is that textual and
graphic material will dominate the videotex advertising. In
addition, the amount of text that is feasible to use selling
any one product will most likely be limited to a couple
hundred words. Long textual advertisements displayed on a
display screen will lose its audience to boredom or eye
strain very quickly. Therefore, any attempt by advertisers
to create a product image will be severly limited by the

textual and graphic boundaries within which they must

131

Table 3: Advertiser's Target Market Age

Under 18
18-24
25-44
45-65
Over 65

Total responses

Table 4: Advertiser's Target Market Income

Under $10,000
$10,000-$14,999
$15,000-$24,999
$25,000-$49,999
$50,000+

Total responses

Count

26

18

Count

Pct of
Responses

2

14

46

32

Pot of
Responses

\l

O

4

6

15

w
\l

O

Pct of
Cases

26

84

58

Pct of
Cases

24

132

Table 5: Race of Advertiser's Target Market

Count Pct of Pct of

Responses Cases
White 17 42 50
Black 2 5 6
Spanish 2 5 6
Oriental 2 5 6
No preference 18 44 53
Total responses 4T _88 —88

Table 6: Profession of Advertiser's Target Market

Count Pct of Pct of

Responses Cases
Housewife 15 19 44
Blue collar 11 14 32
White collar 21 27 62
Professional 27 35 79
Other 4 5 12

O
N
N

Total responses 78 1

133

Table 7: Advertiser's Target Market Education Level

Count Pct of Pct of

Responses Cases
Elementary or less 4 6 13
Some high school 4 6 13
High school graduate 13 18 42
Some college 17 24 55
College graduate 24 34 77
Graduate student 9 13 29
Total responses 7T T88 828

Table 8: Life Cycle Stage of Advertiser's Target Market

Count Pct of Pct of

Responses Cases
No children 9 16 39
Children under 6 yrs. 18 32 78
Children 6-17 yrs. 17 30 74

N
H
U1
N

No children under 18 yrs. 12

O
O
N
A
(A)

Total responses 88 1

134

Table 9: Sex of Target Market

Count Pct of Pct of

Responses Cases
Male 7 21 21
Female 1 3 3
Both 26 77 77
Total responses 84' I_8 I8—

Table 10: Marital Status of Target Market

Count Pct of Pct of

Responses Cases
Married 12 67 67
Single 1 6 6
No Preference 5 28 28
Total responses 18 —88 —88

135

Table 11: Location of Advertiser's Target Market

Count Pct of Pct of

Responses Cases
Suburbs 29 39 88
Major city 21 28 64
Small town 13 17 39
Rural 12 16 36
Total responses 78 188' 277

Table 12: Type of Image Portrayed on Videotex

Count Pct of Pct of
Responses Cases
No Attempt 6 l7 17
Consistent with other
advertising 29 81 81
Other 1 3

l on

O
H
O
C

Total responses 88 10

136

develop their creative work.

Table 12 punctuates the above mentioned point. In 81%
of the cases, advertisers chose to portray their product or
service in a consistent manner to that used in other media.
Another 17% did not even attempt to portray an image with
their advertising. Only one advertiser tried to create an
image suited entirely for videotex. The implication of this
is that videotex is considered to be a medium suitable for
carrying on an image, but not capable of creating one.
Moreover, it might be more appropriate to consider videotex
as a new marketing medium rather than claiming it as a new
medium on which to advertise. The bottomline is that
advertisers can not be expected to use videotex to gain
awareness of new products, except for teletext; but instead,
they must leave this task to the traditional print and

broadcast media.

If a system operator wants to sell space on his system,
then it is essential that he know what features of videotex
will be most (attractive 11) potential advertisers. This
survey found three significant attributes of videotex which
appealed to advertisers: videotex's ability to provide
information to consumers, the transactional ability of
videotex and the interactive potential of the technology.

These choices hit the core of what videotex can provide for

137

Table 13: Most Attractive Feature of Videotex

Count Pct of Pct of
Response Cases
Ability to provide infor-
mation to consumers 13 20 42
Transactional ability 12 19 39
Interactive potential 11 17 36
Instant updating 4 6 13
Ability to reach up-scale
market 3 5 10

Reach interested consumers/
decision makers 3 5 10

Opportunity to broaden
distribution 3 5 10

Convenience 2 3 7

Ease of evaluation

of results 2 3 7
Localization of

information 2 3 7
Technical innovation 2 3 7
Do not know yet 2 3 7
Potential of reaching 98%

of U.S. population 2 3 7
Free during tests 1 2 3
Minimal cost to change copy 1 2 3

Efficient use of
media dollars 1 2 3

Instant credit check
potential 1 2 3

Total responses 88 1 0 213

138

a marketer and accomplish the three basic functions of
selling: inform, sell and. post-sale follow-up. However,
some of the attributes that have been considered to be a
major advantage of videotex were not the most frequently
mentioned. The biggest surprises would be the lack of
acknowledgement of videotex's potential for market research,
though ease of evaluation of results was mentioned. The few
responses given to instant credit check possibilities,
localization. of information, ability' to reach interested
consumers and the ability to instantly update material were
also somewhat surprising. The next step to take with this
data would be to evaluate the responses in some sort of

interval measurement.

Due to the fact that advertisers' experience with
videotex has been limited, the responses to Question 10 (see
Appendix) were anticipated in advance. Table 14 shows that
the main goal of 70% of the advertisers in the videotex
tests was to experiment with the medium. However, 12% of
the advertisers were expecting to attract a given percentage
of users and 6% were expecting a percentage of transactions
per thousand to occur (see Table 20), which shows that a few
advertisers are evaluating the value of videotex in more
depth than the majority of the advertisers. If transactions
are the goal of advertisers using videotex, then the optimum

goal would be to obtain substantial, measurable action at an

139

Table 14: Goals of Videotex Advertising

Count Pct of Pct of
Responses Cases
Experimentation 28 70 82
Reach percent of market 4 10 12
None/not available 2 5 6
Percent of transactions 2 5 6
Find advertising
strengths of 1 3 3
Increase product awareness 1 3 3
Be on leading edge 1 3 3
Reduce costs of catalogs 1 3 3

Total responses 48 10 11

140

efficient cost. The small scale of the tests might have
limited what advertisers expected out of them too, and
therefore, provides a reason for the lack of quantifiable

goals.

More useful information came from advertisers'
responses to their strategies used in the tests. The top
two videotex advertising strategies both indicated that
advertisers wanted to use videotex to expand the consumer's
knowledge about their product or service (see Table 15). The
next step ‘would be to investigate the exact strategies
advertisers planned for expanding their target markets
knowledge about their product. It would also be interesting
to review the creative guidelines established for the

creation of an informative format and the end results.

Again, the depth with which certain advertisers are
experimenting with videotex is evident by the responses
exhibited in Table 15. Strategies looking to service the
consumers' needs and to improve dealer relations are derived
by careful analysis of the potentials for the technology.
One interesting output was that 21% claimed their strategy
was to find out what works best on videotex. The problem
with this is that this response appears to be more suited as

a goal rather than as a strategy.

141

Table 15: Strategies Used with Videotex Advertising

Count Pct of Pct of
Responses Cases

Expand product knowledge 12 24 36
Information advertising
format 10 20 30
Find out what works best 7 14 21
Consistent with overall
advertising strategies 5 10 15
None/not available 5 10 15
Convenience/quick order
fulfillment 2 4 6
Service consumer needs 2 4 6
Image advertising 2 4 6
Selective household
penetration 2 4 6
Sell products without
visuals 1 2 3
To gain awareness of ads
in other media 1 2 3
Improve dealer relations 1 2 3
Positive alternative to
current shopping patterns 1 2 3

(A)

Total responses 51 10 5

142

Table 16 shows the types of promotions that were used
during the tests. Since the goal of sales promotions is to
induce sales in the short-run, it was expected that most
advertisers would use some type of promotion in their
videotex advertisements. The breakdown was 62% who used
promotions, while 38% chose not to employ this sales
device. Interestingly, the use of electronic coupon offers
was the second most popular promotion, sandwiched between
premium offers and price off incentives. The surprise was
that. contest. and sweepstakes ‘were non-existent, although
this probably can be attributed to the small scale of the
tests. As was mentioned in chapter III, contests and

sweepstakes were the third most accessed items on Prestel.

The claimed value of videotex is to allow users to
access information or make transactions at their
convenience. Therefore, the two communication levels
expected to be concentrated on would be product knowledge
and product purchase. And, as shown in Table 15, informing
the consumers is what advertisers want to accomplish on a
videotex system. Knowing this, it was surprising to
discover that two-thirds of the advertisers aimed at
improving consumer awareness of their product or service.
The only rationale to explain this is that advertisers were
actually trying to create advertising that was consistent

with that used in other media (see Table 29) and were not

Table 16: Promotions

None

Premium offer
Coupons

Price off
Free delivery
Refund
Special event

Total responses

143

Used in Tests

Count

15

11

Pct of
Responses

33
24
16

13
4
4
4

100

Table 17: Communication Level Aimed For

Product awareness
Knowledge

Liking

Preference
Conviction
Purchase

Attitude change
Other

Total responses

Count Pct of

Responses
23 32
18 25
4 6
5 7
2 3
17 23
2 3
2 3
73' T66

Pct of
Cases

42

31

20

17

ox

Pct of
Cases

68
53
12

15

50

l m 0\

144

ready to experiment with advertising created specifically
for videotex. As has been mentioned, teletext would be a
medium used to gain awareness, while viewdata would be

better suited for increasing product knowledge.

The overall impression of the responses to Question 17
(see Appendix) is that advertisers were using videotex to
accomplish the goals that the technology adapts itself best
for (see Table 17). Namely, advertising which better informs
consumers about a product or service and then, with the
necessary knowledge about a product or product category,
prompts the actual purchase behavior. The key will be ix:
discovering what is the correct amount and type of knowledge
to be used in the videotex frames that will give consumers
the confidence to immediately‘ purchase a product. This
information might include product uses, safety tips,
ingredients, time schedules, guarantee or warranty facts,
comparisons with competitive products, company background or

testimonials.

Two factors system operators would be interested in
knowing about advertisers is the control advertisers desire
(Table 18) and the improvements necessary to get advertisers
to allocate a portion of their budget to an operational
system (Table 19). Basically, advertisers wanted to be able

to instantly update their advertisements, control their

145

Table 18: Control Over System Wanted by Advertiser

Count Pct of Pct of
Responses Cases

Do not know 10 24 31
Instant updating 8 19 25
Of database input 5 12 16
Of page access and demo—
graphic data 5 12 16
Direct interface with
company computer 5 12 16

Of creative and editorial

content 3 7 9
Greater flexibility 3 7 9
Of hardware and software 2 5 6

Greater understanding of
medium 1 2 3

Total responses 42 100 31

146

input into a system, know the demographics of their audience
(or of the system) and have the system directly interface
with their own computers. The interesting response was that
advertisers wanted to control their input into the system.
The reasoning may be that with input control, advertisers
could instantly launch a new videotex campaign anywhere in
the U.S. without revealing their strategies to their
competitors. The implementation. of .instant. updating’ and
input control (and a significant percentage of the
population on-line) could make marketing tactics very

spontaneous and aggressive.

The improvements advertisers want are geared toward two
distinct areas. The first concern was with the successful
introduction of videotex. The top two responses were for a
mass market (see Table 36) and for a proven high usage
level. Many of the other responses would be taken care of
given a: mass market: lower costs, increased transactional
and gateway capabilities and an enlarged frame base. There
was also a desire for improvements in the technology; 14% of
the respondents ‘wanted photographic capabilities and
improved graphics. Other concerns requiring technological
advancement included quicker accessibility (ME information,
better system security and a means for faster, inexpensive

frame creation.

147

Table 19: System Improvements Wanted by IP

Count Pct of Pct of
Responses Cases

Mass market--greater reach 12 20 34
Do not know 12 20 34
High usage level/proven
medium 8 13 23
Photographic capability 5 8 14
Improved graphics 5 8 14
Become more compatible with
human habits and usage 3 5 9
A fee structure 3 5 9
Lower costs/efficient
cost per order 2 3 6
Make shopping easier and
quicker 2 3 6
Quicker accessibility of
information 2 3 6
Increased transactional and
gateway capabilities 2 3 6
Security 1 2 3
Faster inexpensive frame
creation 1 2 3
Be more like catalogs 1 2 3
Enlarged frame base 1 2 3

Total responses 60 1 0 1 3

148

The strategy behind Question 20 (see Appendix) was to
make more sense of the goals advertisers had set for their
experimentation. Obviously, many (us the respondents gave
vague answers to their companies goals. However, by looking
at the types of results advertisers were planning to
evaluate their findings by, i1: is possible 11) hypothesize
about the true goals of the advertisers. When comparing
Table 14 with Table 20, we find some contradictory
responses. The seventeen "none" responses in Table 20 would
appear to be a measure of the actual number of advertisers
whose goal is strictly experimental. The rest, while
experimenting with videotex, have a set objective that will
be used to evaluate the value of the technology. There are
two ways in which advertisers were evaluating their
findings. One was by response (number of responses per
thousand, number of times frame was accessed, time of access
and relative category jumping) and the other was by sales
transacted via videotex (number of transactions, size of
sales and type of product sold). So, while many of the
advertisers considered their use of videotex to be strictly
experimental, the main focus of their experimentation was to
discover what elements created the most frame traffic and

sales.

Of the 39 usable surveys, 64% of the respondents

claimed that their company was involved with cable TV

149

Table 20: Quantifiable Results Desired

Count Pct of Pct of
Responses Cases

None 17 45 53
Number of responses 10 26 31
Number of sales 5 13 16
Number of times and times
of access 2 5 6
Relative category jumping l 3 3
Size of sales 1 3 3
Type of products sold 1 3 3
Acceptance of information
provided as being
understood by consumer I 3 3
Total responses 88 100 118

Table 21: Advertiser's Involvement in Other New Media

Count Pct of Pct of

Responses Cases
Cable 25 71 96
Videodisc/tape 5 14 19
Satellite TV 3 9 12
DBS 1 3 4
Low power TV 1 3 4

O
W
U'l

Total responses 35 l

150

advertising or 81% of the national or regional advertiser.
There was also a small segment of the survey respondents
whose companies were involved. in exploring videodisc or
videotape as viable sales media for their products. It is
felt that the advertisers who will be the innovators in the
videotex technology are the same companies pioneering

advertising in cable and the other new electronic media.

Table 22 and Table 23 indicate the type of advertisers
who responded to the survey. A total of 12 were in a
service industry, 14 sold nondurable products either at the
wholesale or retail level, 10 sold durable products, two had
services and nondurable products to offer and one dealt in
all three categories. Overall, this is a good distribution
of advertisers. The emphasis on experimentation is by

national advertisers, and the survey bares this out.

In general, participation by national advertisers was
initiated by their advertising agencies, though the agencies
recommending involvement. was limited (1) a couple select
major’ agencies. The: interesting' fact. is that. plans for
videotex advertising were skewed towards the local
emphasis. This may be due to the fact that videotex
penetration in the introductory stage is expected to be
scattered among numerous ideally suited communities, or that

videotex is to be considered in the test market stage for a

151

Table 22: Type of Product Advertised on Videotex

Count Pct of Pct of
Responses Cases
Service 12 31 31
Product/nondurable 14 36 36
Product/durable 10 26 26
Service and durable
product 2 5 5
All three 1 3 3
Total responses 88' 788 I78.

Table 23: Type of Advertiser

Count Pct of Pct of
Responses Cases
National 28 72 72
Local 8 21 21
Regional 3

00
I (D

O
H
O
C

Total responses 39 l

152

Table 24: If Participation was Recommended by Agency

Count Pct of Pct of

Responses Cases
Yes 19 51 51
No 18 49 49
Total responses 87 18_ 188

Table 25: Geographic Plans to use Videotex

Count Pct of Pct of

Responses Cases
National 12 32 32
Local 15 41 41
Regional 2 5 5
Do not know 6 16 16
All three 2 5 5
Total responses 87 788 178

Table 26: Number of Months Involved with Videotex

Months Count Pct of Pct of
Responses Cases

1 to 3 17 46 46

4 to 12 7 19 19

12 to 18 6 16 16

Over 18 7 19 19

Total responses 37 10 00

153

number of years, and therefore, not worth the effort

necessary to create and monitor a national campaign.

The distribution of months involved in videotex by the
respondents is shown in Table 26. The mean average time
involved in videotex experimentation is nine months--a
relatively short time for any of the advertisers to uncover
the strengths, possibilities and potentials of the

technology.

Questions 13 (image portrayal), 15 (co-op advertising)
and 16 (creative design similar) were asked in an attempt to
further uncover advertisers videotex strategies.
Interestingly enough, there was a even break between
advertisers showing and not showing prices. Even more
interesting is that the 17 respondents who said they were
interested in affecting the purchase decision (Table 17)
were not always the same respondents using prices in their
ads. Where the discrepancies lie is not known: either the
data is faulty or some of the advertisers were missing on
their sales pitch. Very few people make purchases without

knowing the price to be paid.

Advertisers may also be missing their mark by passing
up the potential for co-op advertising. If local marketing

is the prime focus of a campaign, then it only makes sense

154

Table 27: Were Prices Shown in Advertising?

Count Pct of Pct of

Responses Cases
Yes 17 47 47
No 19 53 53
Total responses 88 1_8 —88

Table 28: Will Co-op Advertising be Used?

Count Pct of Pct of

Responses Cases
Yes 7 21 21
No 23 68 68
Do not know 4 12 12
Total responses 88 I78 188

Table 29: Are Ads Similar to Other Media?

Count Pct of Pct of

Responses Cases
Yes 21 58 58
No 15 42 42

Total responses 88 10

O
O

155

to include a listing of the dealers where consumers can buy
the product. Or, are manufacturers more interested in
gaining the higher profit margins obtainable through direct
marketing sales? In either case, the advertising used on
the videotex systems was similar to that used in other media
in 58% of the cases. The point here is that 42% of the
advertisers were experimenting with a totally new concept
for videotex advertising, which given the capabilities of
the technology (e.g. direct sales potential, potential for
providing unlimited amounts of information if necessary) is
understandable. So, the reason co-op was not an alternative
being evaluated for videotex advertising may actually be
because marketers were looking to maximize their advertising

dollars through direct sales.

In Table 19, only three of the respondents indicated a
desire to have a fee structure set up. However, the nature
of the advertising business is such that this will be a
requirement once system operators begin charging advertisers
for the priviledge of using videotex frames to sell their
products. Table 30, 31 and 32 addressed the desires of the
advertisers in regards to a suitable pricing scheme.
Unfortunately, the responses left the issue unsettled. The
one fact that did come out was that if a CPM charge was
levied, it had better be under $10.00. Pricing is probably

the least settled area currently under evaluation by system

156

Table 30: Pricing Scheme Desired by Advertiser

Count Pct of Pct of

Responses Cases
CPM + per frame 7 23 23
CPM 5 16 16
Flat fee 4 13 13
Flat fee + CPM 4 13 13
Per frame 1 3 3
Other 3 10 10
Do not know 7 23 23
Total responses 88' 188 7—8

Table 31: CPM Price Range Desired

Count Pct of Pct of

Responses Cases
Under $10.00 7 78 78
$10.00 - $20.00 1 11 11
$51.00 - $75.00 1 11 11

O
0

Total responses 9 10 l

157

Table 32: Per Frame Charge Desired

Count Pct of Pct of

Responses Cases
Under $150.00 2 50 50
$150.00 - $450.00 1 25 25
$451.00 - $750.00 1 25 25
Total responses 8 788 T78

Table 33: Percent of 1982 Budget Allocated to Videotex

Count Pct of Pct of

Responses Cases
Less than .50% 19 63 63
Do not know 9 30 30
Not an alternative 1 3 3
Not part of budget 1 3 3

O
O
C

Total responses 88' 1

158

operators and advertisers alike. The key will be in
establishing a formula that pays a given percentage of the
operating costs, while providing substantial value and
incentive to advertisers to encourage greater use of the
technology to sell their wares and to attract other less

progressive advertisers to the medium.

Table: 33, 34 and. 35 ShOW’ the estimated percent of
budget that advertisers plan to allocate to videotex in the
years 1982, 1985 and 1990 respectiveky. As expected, the
number of "do not know" responses increased the further
ahead projections had to be made. It had been anticipated
that many of the advertisers evaluating videotex had not
made any long-range plans for the technology at this early
stage. Yet, the positive side of the responses was that
advertisers fully expect to be increasing their budget
allocations over the next seven years, though this may be
based on the assumptions that penetration levels will
increase proportionally over those years. Moreover, over
20% of the respondents fully expect to be allocating at

least 1% of their advertising budget by 1990.

Table 36 shows the penetration levels that advertisers
expected videotex to reach before considering it to be a
viable medium. With 30% of the responses (59% of responses

other than "do not know") requiring a penetration level

159

Table 34: Percent of 1985 Budget to be Spent on Videotex

Count Pct of Pct of

Responses Cases
Less than .50% 6 19 19
.05 - .99% 2 6 7
1.0 - 4.99% 3 10 10
Do not know 17 55 55
Not an alternative 2 7 7
Not part of budget 1 3 3
Total responses 81 188 188

Table 35: Percent of 1990 Budget to be Spent on Videotex

Count Pct of Pct of
Responses Cases
Less than .50% 2 7 7
.05 - .99% 2 7 7
1.0 - 4.99% 2 7 7
5.0 - 9.99% 3 10 10
10.0 - 20.0% 1 3 3
Do not know 20 65 65
Not part of budget 1

I OJ
I (.0

O
H
O
C

Total responses 31 10

160

Table 36: Penetration Level Desired by Advertiser

Count Pct of Pct of

Responses Cases
1.0 - 4.99% 1 3 3
5.0 - 9.99% 2 6 6
10.0 - 20.0% 4 12 12
Greater than 20.0% 10 30 30
Do not know 16 49 49
Total responses 88 I88 18—

Table 37: Advertiser's Plans for Videotex

Count Pct of Pct of

Responses Cases
More experimentation 25 71 71
Do not know 7 20 20
None 2 6 6
Greater use 1 3 3
Total responses 88 788 788

161

greater than 20%, it is possible that the usual 30%
penetration figure required by new technologies will need to
be reached before videotex is considered a viable marketing
and advertising medium. Until videotex reaches a
penetration level acceptable to advertisers, any involvement
in the medium may be considered to be experimental. This
may explain why 71% of the respondents planned to do more
experimentation. with ‘videotex, ‘while only one advertiser
committed to using videotex more in their advertising
plans. Still, initial subscribers should represent the

upscale target market marketers like to reach.

Table 38 exhibits the responses advertisers had when
asked to evaluate their satisfaction with their advertising
agencies knowledge about videotex. The mean of the
twenty-one cases was 5.9, but the interesting result was
that some of the major advertisers confidentially said that
they were dissatisfied with the work their agencies had done

with videotex.

The Results: Two-Way Frequency Distributions

 

Two-way frequency distributions by product type and by

162

Table 38: Satisfaction of Agency Knowledge with Videotex

 

 

Scale Count Pct of Pct of
Responses Cases

1 Very Dissatisfied 0 0 0

2 2 9.5 9.5

3 3 14.3 14.3

4 1 4.8 4.8

5 4 19.0 19.0

6 2 9.5 9.5

7 3 14.3 14.3

8 2 9.5 9.5

9 2 9.5 9.5

10 Very Satisfied 2 9.5 9.5

Total responses 28' 100.0 100.0

Mean = 5.905
Range = 8

163

type of service offered were run for appropriate questions.
The major limitation of two-way frequency tables is that the
number of responses in any one frame becomes very small.
Again,' it should be reiterated that the idea behind this
survey was to set a foundation on which others could expand
from; and hopefully the results and the following analysis
will stimulate debate and further analysis on the needs of

advertisers.

Table 39 provides the breakdown of services offered by
product type. For companies in the service industry the
emphasis on videotex appeared to kn: towards informing the
consumers about their service, though it is interesting to
note that five of the respondents attempted to sell their
service over_the videotex system. Durable products made up
45% of tflma transaction services attempted, possibly
indicating that durable products were easier to sell and
distribute directly to the consumer. Advertisers of
non-durables, like services, appeared to emphasize
communicatjrul goals over sales, though seven. advertisers
attempted to sell their products directly to the consumers

via the videotex system.

Interestingly, Table 40 shows that service advertisers
were split between selling locally' and nationally. The

implication was that various services can be sold on a

164

Table 39: Service Offered by Product Type

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
10 7 9
Information 42 25 38 26
Access 38 27 35 33
13 9 11
5 10 7
Transaction 21 36 29 22
Services 23 45 32 28
6 13 9
1 1
Information 4 4 2
Processing 50 50 3
1 1
1 1 2
Communicate 4 4 8 4
Services 25 25 50 5
1 1 3
7 9 9
Straight 29 32 38 25
Advertising 28 36 36 31
9 11 11
1
None 4 l
100 1
1
Column 24 28 28 80

Total 30 35 35 100

165

Table 40: Geographic Plans by Product Type

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
6 7 4
Locally 43 54 29 17
35 41 24 41
15 17 10
1 1
Regionally 7 7 2
50 50 5
2 2
6 3 5
Nationally 43 23 36 14
43 21 36 34
15 7 12
1 3 2
Do Not Know 7 23 14 6
17 50 33 15
2 7 2
2
All Three 14 2
100 5
5
Column 14 13 14 41

Total 34 32 34 100

166

national basis if consumers know about the company. This
provides a way for a company to grow without increasing in
physical size (e.g. banks, publishers) or to set up
satellite operations in select communities where business is
best (e.g. pest control businesses, travel agents,
retailers). The fact that advertisers of durable products
slanted their plans towards local marketing indicates that a
great potential for co-op advertising exists. This might be
one area on which system operators will want to sell their
service to hardware manufacturers. With regional and
national interests in videotex totaling 39%, the possibility
of regional and national gateways (videotex interconnects)
with the sole purpose of supplying advertising to systems,
while maximizing buying convenience for advertisers, becomes

a possibility.

Tables 41 to 45 breakdown the target market of the
various advertisers by their product line. For services,
the average target market they advertised to were
individuals aged 25 to 65 who make over $25,000 per year in
a white collar or professional occupation, have at least
some college experience and who live in a major city or its
suburbs. For videotex advertisers of durable products,
their target market demographics were individuals 18 to 65
who earn over $25,000 per year and have at least a high

school diploma and currently live in the suburbs. Table 43

167

Table 41: Target Market Age by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
1
Under 18 5 1
100 1
2
2 4 4
18 to 24 11 19 19 10
20 40 40 15
3 7 7
8 11 9
25 to 44 42 52 43 28
29 39 32 41
13 18 15
8 5 5
45 to 65 42 24 24 18
44 28 28 26
13 8 8
1 1 2
Over 65 5 5 10 4
25 25 50 6
2 2 3
Column 19 21 21 61

Total 28 31 31 100

168

Table 42: Target Market Income by Product Type

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
1 1
Under 5 4 2
$10,000 50 50 3
2 2
l 2
$10,000 to 6 8 3
$14,999 33 67 5
2 3
1 2 6
$15,000 to 5 13 25 9
$24,999 11 22 67 15
2 3 10
8 8 7
$25,000 to 42 50 29 23
$49,999 35 35 30 38
13 13 12
9 5 8
Over 47 31 33 22
$50,000 41 23 36 37
15 8 13
Column 19 16 24 60

Total 32 27 40 100

169

Table 43: Target Market Profession by Product Type

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
5 6 8
Housewife 17 19 25 19
26 32 42 20
5 6 9
3 5 6
Blue Collar 10 16 19 14
21 36 42 15
3 5 6
8 9 8
White Collar 27 29 25 25
32 36 32 27
9 10 9
13 10 8
Professional 43 32 25 31
42 32 26 33
14 11 9
1 1 2
Other 3 3 6 4
25 25 50 4
1 1 2
Column 30 31 32 93

Total 32 33 34 100

170

Table 44: Target Market Education Level by Product Type

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
2 1 2
Elementary 7 4 8 5
or Less 40 20 40 6
3 1 3
2 l 2
Some 7 4 8 5
High School 40 20 40 6
4 1 3
3 5 6
High School 11 19 23 14
Graduate 21 36 43 18
4 6 8
7 6 6
Some College 26 22 23 19
37 32 32 24
9 8 8
9 10 7
College 33 37 27 26
Graduate 35 38 27 33
11 13 9
4 4 3
Graduate 15 15 12 11
Student 36 36 27 14
5 5 4
Column 27 27 26 80

Total 34 34 32 100

171

Table 45: Target Market Location by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
9 6 9
Major City 26 21 30 24
38 25 38 27
10 7 10
11 12 10
Suburbs 31 43 33 33
33 36 30 37
12 13 11
5 5 6
Small Town 14 18 20 16
31 31 38 18
6 6 7
6 5 5
Rural Area 17 18 17 16
38 31 31 18
7 6 6
Column 31 28 30 89

172

indicates that advertisers of durable and non-durable
products had In) real preference 11) their customers'
occupation. The specifics of non-durable product
advertisers' target market are individuals 18 to 65 with
incomes over $15,000, a high school education and now live
in either a major city or its suburbs. Again, the next task
is to compare these demographics with those associated with
videotex users to determine which manufacturers are the

prime candidates for advertising on a videotex system.

The strategies of expanding consumers' knowledge about
a product or service and using an informative advertisement
format dominanted the thinking of service and non-durable
product organizations (Table 46). However, durable product
advertisers experimented. with. a .range of (different
strategies; the most provocative strategies were to sell
without the aid of visuals, servicing customer needs and
improving dealer relations. What is needed is a detailed
description of just how advertisers are going about meeting
these strategies. This can be accomplished with further

investigation.

In analyzing the data in Table 47, the fact that three
service organizations made no attempt to create an image
stands out. It would seem that what differentiates one

service company from its competitors is its image; yet, a

173

Table 46: Advertising Strategies by Product Type

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
Expand 5 3 5
Product 24 18 24 13
Knowledge 38 23 38 22
8 5 8
4 3 4
Find What 19 18 19 11
Works Best 36 27 36 19
7 5 7
3 1 1
None 14 6 5 5
N/A 60 20 20 8
5 2 2
Sell 1
Products 6 1
Without 100 2
Visuals 2
Informative 4 1 5
Ad 19 6 24 10
Format 40 10 50 17
7 2 8
Convenience- 1 1
Quick Order 6 5 2
Taking 50 50 3
2 2
Service 1 1
Consumer 5 6 2
Needs 50 50 3
2 2
Consistent 1 3 2
With Adv. 5 18 10 6
Strategies 17 50 33 10
Overall 2 5 3
2
Image 10 2
Advertising 100 3
3

 

 

 

 

17L»

Table 46 continued

 

 

 

 

 

 

 

 

 

 

Selective 1 1

Household 5 6 2

Penetration 50 50 3
2 2

To Gain 1

Awareness 5 1

For Ads In 100 2

Other Media 2

Improve 1

Dealer 6 1

Relations 100 2

2

A Positive 1 1 1

Alternative 5 6 5 1

To Shopping 33 33 33 2

Patterns 2 2 2

Column 21 17 21 59

Total 36 29 36 100

175

couple of the service advertisers appeared to take a "yellow
pages" approach to videotex. They listed their availability
and service, but nothing more. A majority of the
advertisers tried to at least keep up their established
image from advertisements on other media. Kudos go to the
non-durable product. advertiser who experimented. ‘with

creating a specific videotex image for his product.

As for prices being shown, non-durable product
advertisers did not list their prices by a margin of almost
two-to-one. Both service and durable product advertisers
were more apt to show their prices than not, but the
difference cannot be considered significant. What is
necessary is to evaluate the use of price by product line,

which was not done in this survey.

Table 49 shows that for each of the three
classifications, premium offers were time most used. Price
off and coupon promotions were the second most used
promotions for durables, while couponing was second to
premiums in the non-durable classification. Unfortunately,
no results were available at the time of the survey as to

the success of each promotion.

With premium offers and coupons being the two top

promotions used by durable product advertisers, again the

176

Table 47: Image Portrayed by Product Type

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
No Attempt 3 1 4
to Create 21 8 29 8
an Image 38 13 50 20
8 3 10
Consistent 11 11 9
With Other 79 92 64 31
Media 35 35 29 78
28 28 23
1
Other 7 l
100 3
3
Column 14 12 14 40
Total 35 30 35 100

Table 48: If Prices Were Shown by Product Type

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
7 7 5
Yes 54 54 36 19
37 37 26 48
18 18 13
6 6 9
No 46 46 64 21
29 29 43 53
15 15 23
Column 13 13 14 40

177

Table 49: Promotions Used by Product Type

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
8 4 4
None 53 21 25 16
50 25 25 32
16 8 8
1 1 2
Free 7 5 l3 4
Delivery 25 25 50 8
2 2 4
1 3 4
Coupons 7 16 25 8
13 38 50 16
2 6 8
1 1
Refund 7 5 2
50 50 4
2 2
2 4 1
Price Off 13 21 6 7
29 57 14 14
4 8 2
2
Special 11 2
Event 100 4
4
2 4 5
Premium 13 21 31 11
Offer 18 36 45 22
4 8 10
Column 15 19 16 50

178

opportunity for co-op advertising exists. What better way
to create greater short-run sales, while improving dealer
relations, than combining a promotion with a co-op
arrangement. Table 50 shows that durable product
advertisers were most apt to use co-op programs. The
possibilities are endless, but the value is obvious.
Customers are pulled into a dealers store to buy the durable
advertiser's product and take advantage of the promotional
offer; a habit both the retailer and the manufacturer want

the customer to establish.

Table 51 shows that durable product and service
oriented advertisers were more likely to use similar
advertising to that used in other media with their videotex
advertising. Advertisers of non-durable products were split
between using similar styles of advertising on videotex.
The positive note is that 38% of the respondents were
experimenting with advertisements not similar to those used
in other media, advertisements which could be specifically
designed to take advantage of the benefits of videotex. If
this is the case, it would be a good bet that the reason for
this trend of designing a specific videotex advertising
format is due to the transactional capabilities of the

technology.

It is well recognized in the advertising business that

179

Table 50: Co-op Advertising (to be) Used by Product Type

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
2 4 1
Yes 17 33 8 7
29 57 14 19
6 11 3
6 7 11
No 50 58 92 24
25 29 46 67
17 19 31
4 1
Do Not 33 8 5
Know 80 20 14
11 3
Column 12 12 12 36
Total 33 33 33 100

Table 51: Similar Advertising by Product Type

 

 

 

 

Count

Column Pct Non

Row Pct Service Durable Durable Row

Tab Pct Product Product Total
10 8 7

Yes 71 62 54 25
40 32 28 63
25 20 18

4 5 6

No 29 38 46 15
27 33 40 38
10 13 15

Column 14 13 13 40

180

non-durable (packaged goods) advertising is a more advanced
science then that of durable products advertising and also
of service advertising. This may' be the :reason. why 12
service organizations, 10 durable product advertisers and
only 5 non-durable product advertisers chose awareness as
the communication level they were attempting to impact with
their videotex advertising. The reason behind these choices
are unknown. In most cases, a videotex user will have to
know something about the product in order to access
information about it, so it is wasteful to try to gain
awareness for a: product. via ‘videotex; the exceptions to
gaining awareness being if the product's advertising is used
to sponsor some videotex service, ads on teletext or if the
user is browsing through a catalog of a specific
manufacturer. Of course, similar proportions to those above
occurred by product classification for knowledge level

responses and purchase level responses.

Table 53 gives the distribution of quantifiable results
used by various advertisers to evaluate their
experimentation. The fact that stands out the most is that
50% of the respondents went into the videotex tests without
some pre-set goals. This means that either advertisers were
entering the experimention with an open mind or they were
unprepared to examine the values of videotex on a

professional level.

181

Table 52: Communication Level by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
12 10 5
Awareness 34 37 24 27
44 37 19 33
14 12 6
9 7 5
Knowledge 26 26 24 21
43 33 24 25
11 8 6
3 1
Liking 9 5 4
75 25 5
4 1
1 1 3
Preference 3 4 14 5
20 20 60 6
1 1 4
2
Conviction 6 2
100 2
2
7 8 5
Purchase 20 30 24 20
35 40 25 24
8 10 6
1 1
Attitude 3 5 2
Change 50 50 2
1 1
l 1
Other 4 5 2
50 50 2
1 1
Column 35 27 21 83

Total 42 33 25 100

182

Table 53: Quantifiable Results by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
8 8 5
None 73 53 31 21
38 38 24 50
19 19 12
2 3 5
Number of 18 20 31 10
Responses 20 30 50 24
5 7 12
Number of 1 1
Times Viewed 7 6 2
and Times of 50 50 5
Viewing 2 2
Relative 1
Category 7 1
Jumping 100 2
2
2 3
Number of 13 19 5
Sales 40 60 12
5 7
1
Size of 6 1
Sales 100 2
2
1
Products 6 1
Sold 100 2
2
Knowledge of 1
Information 9 1
Input is 100 2
Understood 2
Column 11 15 16 42

Total 26 36 38 100

183

Table 54 to 56 shows the expected advertising budget
allocation for videotex by the advertisers. As mentioned
before, it is encouraging to see that advertisers were
expecting to increase their allocation over the next seven
years, in one case all the way up to 10% or more of their
advertising budget. Another interesting item in Table 56 is
that none of the respondents indicated that videotex would

"not be an alternative" in 1990.

The breakdown by product classification for the
advertisers' desired penetration level is shown in Table 57.
Videotex penetration levels may not be as important as the
demographics of its users, still most advertisers (35%)
indicated a desire for penetration levels to exceed at least
20%. Whether this is the true level required to validate
videotex's emergence as a viable medium will require extra
investigation. With the sales potential of videotex, it is
possible that manufacturers will gladly settle for a lower
penetration in exchange for proof that videotex advertising

increases their sales and profit margins.

The limitation of the data in Table 58 is that there
was no indication of how long advertisers had been involved
in other new electronic media. With cable penetration

levels now past the 30% barrier, some of the advertisers

184

Table 54: Percent of 1982 Budget by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
6 7 8
Less Than 55 64 67 21
.50% 29 33 38 62
18 21 13
1
Not an 9 1
Alternative 100 3
3
4 4 3
Do Not 36 36 25 11
Know 36 36 27 32
12 12 9
1
Not Part 8 1
of Budget 100 3
3
Column 11 11 12 34

Total 32 32 35 100

185

Table 55: Percent of 1985 Budget by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
4 3
Less Than 36 25 7
.50% 57 43 20
11 9
1 1
.50% to .99% 9 8 2
50 50 6
3 3
1 2 1
1.0% to 9 17 8 4
4.99% 25 50 25 11
3 6 3
l 1
Not an 8 8 2
Alternative 50 50 6
3 3
5 6 8
Do Not 45 50 67 19
Know 26 32 42 54
14 17 23
1
Not Part 8 1
of Budget 100 3
3
Column 11 12 12 35

Total 31 34 34 100

186

Table 56: Percent of 1990 Budget by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
1 1
Less Than 9 8 2
.50% 50 50 6
3 3
1 1
.50% to 9 8 2
.99% 50 50 6
3 3
1 1
1.0% to 9 8 2
4.99% 50 50 6
3 3 |
2 1 1
5.0% to 18 8 8 4
9.99% 50 25 25 11
6 3 3
1
10.0% to 8 1
20.0% 100 3
3
6 8 9
Do Not 55 67 75 23
Know 26 35 39 66
17 23 26
1
Not Part 8 1
of Budget 100 3
3
Column 11 12 12 35

Total 31 31 34 100

187

Table 57: Penetration Wanted by Product Type

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
1
1.0% to 8 1
4.99% 100 3
3
2
5.0% to 15 2
9.99% 100 5
5
1 2 1
10.0% to 8 25 8 5
20.0% 20 60 20 14
3 8 3
5 4 4
Over 20.0% 38 33 33 13
38 31 31 35
14 11 11
5 5 6
Do Not 38 42 50 16
Know 31 31 38 43
14 14 16
Column 13 12 12 37

Total 35 32 32 100

188

could have added cable advertising in the past year and
therefore should not be considered innovators in this
medium. However, the advertisers experimenting ‘with
satellite TV, videodisc/videotape, DB8 and low power TV
would definitely be considered innovators. The fact that
three advertisers of durable products were interested in
videodisc/videotape as a selling tool meant that retailers
were looking for alternative ways to sell their wares to

customers.

Table 59 breaks down the advertisers' geographic plans
by the type of service offered. There are no real
differences in the type of service offered either locally or
nationally. Therefore, it is safe to assume that a gateway
specifically designed to meet the needs of advertisers can
be successful as lrnm; as information access, transactional
services and straight advertising can be accomplished

efficiently.

Table 60 shows just how much experimenting is going on
in the videotex tests. Advertisers were trying many
different strategies to find out which ones would generate
the most business for them. It was interesting to see that
advertisers were experimenting with many different tactics
in the two classifications they probably had the least

experience in: transactional services and providing

189

Table 58: Involvement in Other Media by Product Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count
Column Pct Non
Row Pct Service Durable Durable Row
Tab Pct Product Product Total
9 10 10
Cable 64 59 83 29
31 34 34 67
21 23 23
1 1 1
Satellite TV 7 12 8 4
25 50 25 9
2 5 2
2 4 1
Videodisc/ 14 24 8 7
Videotape 29 57 14 16
5 9 2
1 1
DBS 4 4 1
50 50 5
2 2
1
Low Power TV 7 1
100 2
2
Column 14 17 12 43

Total 33 40 28 100

190

 

 

 

 

 

 

Table 59: Geographic Plans by Services Offered
Count*
Column Pct
Row Pct Informa Transac Informa Communi Plain Row
Tab Pct Access Service Process Service Adver Total
8 8 l 10
Locally 34.8 44.4 50.0 47.6 13
29.6 29.6 3.7 37.0 40.3
11.9 11.9 1.5 14.9
2 1
Regionally 8.7 4.8 3
66.7 33.3 4.5
3.0 1.5
9 7 l 1 6
Nationally 39.1 38.9 50.0 50.0 28.6 25
36 0 28.0 4.0 4.0 24.0 37.3
13 4 10.4 1.5 1.5 9.0
4 2 1 3
Do Not 17.4 11.1 50.0 14.3 10
Know 40.0 20.0 10.0 30.0 14.9
6.0 3.0 1.5 4.5
1 1
All Three 5.6 4.8 2
50.0 50.0 3.0
1.5 1.5
Column 23 18 2 2 21 67
Total 34.3 26.9 3.0 3.0 31.3 100.0

*National total includes one non—service response.

191

Table 60: Advertising Strategies by Services Offered

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Count*
Column Pct
Row Pct Informa Transac Informa Communi Plain Row
Tab Pct Access Service Process Service Adver Total
Expand 7 9 1 7
Product 20.6 31.0 25.0 25.0 25
Knowledge 28.0 36.0 4.0 28.0 24.8
6 9 8.9 1.0 6.9
6 4 2 5
Find What 17.6 13.8 50.0 17.9 17
Works Best 35.3 23 5 11.8 29.4 16.8
5.9 4 0 2.0 5.0
3 1 2
None 8.8 3.4 7.1 6
N/A 50.0 16.7 33.3 5.9
3.0 1.0 2.0
Sell 1
Products 3.4 1
Without 100.0 1.0
Visuals 1.0
Informative 9 5 1 6
Ad 26.5 17.2 25.0 21.4 21
Format 42.9 23.8 4.8 28.6 20.8
8.9 5.0 1.0 5.9
Convenience- 2 2 1
Quick Order 5.9 6.9 25.0 5
Taking 40.0 40.0 20.0 5.0
2.0 2.0 1.0
Service 1 1 1
Consumer 2.9 3.4 25.0 4
Needs 25.0 25.0 25.0 4.0
1.0 1.0 1.0
Consistent 5 2 3
With Adv. 14.7 6.9 10.7 10
Strategies 50.0 20.0 30.0 9.9
Overall 5.0 2.0 3.0
1 1
Image 3.4 25.0 2
Advertising 50.0 50.0 2.0
1.0 1.0

 

 

 

 

 

 

192

Table 60 continued

 

 

 

 

 

 

 

 

 

Selective 1 2

Household 3.4 7.1 3

Penetration 33.3 66.7 3.0
1.0 2.0

To Gain 1

Awareness 3.6 1

For Ads In 100.0 1.0

Other Media 1.0

Improve 1 1

Dealer 3.4 3.6 2

Relations 50.0 50.0 2.0
1.0 1.0

A Positive 1 l 1 1

Alternative 2.9 3.4 25.0 3.6 4

To Shopping 25.0 25.0 25.0 25.0 4.0

Patterns 1.0 1.0 1.0 1.0

Column 34 25 4 4 28 101

Total 33.7 28.7 4.0 4.0 27.7 100.0

*Expand product knowledge and service consumer needs each have
one non-service response.

193

unlimited information to customers. Any experience in the
field of direct marketing would probably be a valuable asset
in developing the proper strategies to make transactional
services successful for advertisers. As for information
access service, advertisers need to find out the correct
amount of information needed to sell their product, while

being cost efficient at the same time.

The last table, Table 61, looks at what communication
level advertisers attempted to affect with each particular
service. With information. access services, the greatest
emphasis was on gaining awareness and increasing the
consumers knowledge of products or services. For
transactional services, the stress was on gaining awareness
and inducing purchase. For those advertisers placing
straight advertising on the videotex system, gaining

awareness was the most important level to affect.

194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 61: Communication Level by Services Offered
Count*
Column Pct
Row Pct Informa Transac Informa Communi Plain Row
Tab Pct Access Service Process Service Adver Total
18 11 2 2 14
Awareness 34.0 34.4 28.6 50.0 37.8 47
38.3 23.4 4.3 4.3 29.8 34.6
13.2 8.1 1.5 1.5 10.3
16 6 1 1 9
Knowledge 30.2 18.8 14.3 25.0 24.3 34
47.1 17 6 2.9 2.9 26.5 25.0
11.8 4 4 .7 .7 6.6
4 1 2
Liking 7.5 3.1 5.4 7
57.1 14.3 28.6 5.1
2.9 .7 1.5
3 1 2 1
Preference 5.7 3.1 28.6 2.7 8
37.5 12.5 25.0 12.5 5.9
2.2 .7 1.5 .7
2 2 1
Conviction 3.8 6.3 2.7 5
40.0 40.0 20.0 3.7
1.5 1.5 .7
8 10 2 1 7
Purchase 15.1 31.3 28.6 25.0 18.9 29
27.6 34.5 6.9 3.4 24.1 21.3
5.9 7.4 1.5 .7 5.1
2 1
Attitude 3.8 2.7 3
Change 66.7 33.3 2.2
1.5 5.1
1 2
Other 3.1 5.4 3
33.3 66.7 2.2
.7 1.5
Column 53 32 7 4 37 136
Total 39.0 23.5 5.1 2.9 27.2 100.0

*Knowledge, preference and purchase have one non-service response.

Chapter VI

SUMMARY AND CONCLUSIONS

In the initial stages of the thesis two objectives were
set: to evaluate the needs and opportunities of advertisers
who will undoubtedly be responsible for supporting videotex
when it becomes a viable communication medium and to put
together a review of the present videotex situation. The
survey accomplished this first objective and has provided a
foundation for others to work from. The review of the
present day situation was the result of secondary research
from the work of many individuals involved in the field of

videotex.

From the results of the survey, it can be surmised that
advertisers will be experimenting with the technology for
many years to come. The major services advertisers were
experimenting’ ‘with. ‘were information. access, straight
advertising and transactional capabilities, which are the
three services that advertisers would be expected to

provide. These services can. accomplish the three basic

195

196

marketing goals, which were also the three attributes
advertisers liked the most about videotex: providing
information to consumers, selling the product (transactional
capability) and the interactive potential (post-sale follow
up). Moreover, advertiser strategies were designed to
increase a user's knowledge and awareness of their product
or service, along with creating an atmosphere that would

prompt impulse buying.

By evaluating the target market of the products
advertised on videotex, it was apparent that advertisers
were expecting to market to an upscale audience. However,
it was interesting to note that even with a segmentable
upscale market, advertisers were consistent in the product
image they portrayed in their ads. Few tried to create
advertisements specifically aimed at the upscale videotex
user. It will be necessary for each advertiser to evaluate
the opportunities videotex offers in relation to their own

objectives, goals and strategies.

Videotex will be judged on its effectiveness in
conveying the intended message and as a sales tool.
Advertisers will also look at the audience demographics of
videotex and at the technology's ability to reach a mass
market with a suitable frequency. The current

experimentation should be used to discover the most

197

effective frequency and the effect of wearout on videotex
advertising. It might also be important to know' which
product and service categories require more information than

can be provided through traditional advertising media.

For now, advertisers are waiting for videotex to reach
a mass market (penetration levels greater than 20%) and
proof that it is a medium with a high usage rate. The
involvement in videotex may be similar to that experienced
by cable. In fact, many of the survey respondents were
involved in cable advertising and with other new electronic

media.

Videotex has many advantages to offer users. In fact,
the benefits of videotex can be provided by other means;
but, videotex will usually be a more convenient tool to
use. Plus, videotex offers the benefits of many different

media in one neat package.

Videotex: offers advertisers many' benefits too. For
instance, the synergistic impact videotex should have on
consumers will benefit marketers. The ability of marketers
to advertise, promote, sell, test and interact with their
customers will make videotex the sales tool of the future.
The sales opportunity alone is incentive enough for many of

the top direct marketers to get involved in the medium,

198

including Sears, Penney's, Fingerhut, Eddie Bauer, American
Express and Publisher's Clearing House. There is also a
great potential for advertiser's to sponsor various services
(e.g. a sports scoreboard or an educational game) in order
to attract the attention of a specific target market. Best
of all, messages can be disseminated instantly and updated

immediately upon request.

Another value of videotex will be in supporting
products and services which require careful explanation.
This can mean supplying instructions, preventions, remedies,
guarantees or additional information than what is provided
by advertisements and packages. Lost instructions to a
product can create a very frustrating situation which will
reduce the consumer's image of a product. By using a
videotex system, marketers can provide this information
immediately' and reduce this frustrating situation, while
maintaining a good image for their product in the minds of
the consumer. This points out two other benefits of
videotex: advertisers will be able to insert as much
information as they' want into a system (message length

flexibility) and the information will have a long life.

The area of handling post—sale complaints and other
customer dissatisfaction can be enhanced through the

introduction of an interactive electronic messaging service

199

connecting the company ombudsman and the disgruntled
customer. The value of this feedback to advertisers for new
products alone could attract many advertisers. Advertisers
are also well aware of the potential for videotex systems to
collect market data; data better and less costly than has

ever been available.

The profit margins a large videotex system will provide
for banks, retailers, grocery stores and even wholesalers is
reason enough for marketers to get involved with videotex.
This is one reason why videotex is assured of becoming an
acceptable medium to advertise on. The reasons for these
higher profit margins are that videotex should be a low cost
medium to use or to test market products; and through the
use of videotex, distributors can lower their energy and
labor costs. These profit margins can be obtained while
manufacturers are strengthening relations with their dealers

through co-op packages and retail tie-ins.

Finally, there is the advantage of being able to sell
to an upscale target market which can easily be segmented
either locally, regionalLy or nationally. Moreover, users
will access only information that interests them; therefore,
assuring a high level of frame awareness. This level of
concentration will also be enhanced by the newsworthy

setting videotex will provide.

200

On the other side of the coin are the disadvantages.
To begin with, distribution problems exist due to the time
lag between a videotex sale and the time of delivery and on
how to handle returns and exchanges. Videotex sales will
also have to deal with the problem of providing a substitute
for the social interaction associated with shopping.
Advertising's creative work will be limited by the technical
capabilities of videotex until alphaphotographic videotex is

available.

There are some present problems which will be solved as
videotex matures. These include the ‘unsettled issue of
cost, the privacy and consumer protection issues, the lack
of audience demographics and a mass market. The technology
must also overcome a lack of awareness and knowledge people
have for videotex. Advertising agencies will also want to
know how they will be compensated if system operators do not

go along with the traditional commission.

The most important aspect of viewdata advertising will
be for products and services to already be in a consumer's
evoked set. The reason for this is that users will be
actively searching for information (n: certain brands or
product lines, except in the case where advertisers sponsor

a frame of information. If the user does not. have a

201

particular brand name in mind, he most likely will not
access frames on the brand. However, a user could run
across a brand not in his evoked set while looking through a
particular product line. Advertisers must also learn how to
lead a potential customer through a system to their

advertisements.

The increasing cost. of television advertising' means
that many advertisers are looking for other media to promote
their products. Videotex will 1x2 a cost effective
alternative to television, or even a way to augment an
overall advertising campaign. Videotex users can be
directed from advertisements in other media to gain
additional information about a product by accessing a given
page number. This gives consumers a way to cope with mass
advertising exposures by giving them the ability to select
the ads they want to see; a psychological advantage that
increases awareness of the advertisement's content and is

pleasing to a consumer.

The focus of videotex messages must be to motivate
users to make a purchase, if at all possible. Rarely does a
marketer have the opportunity to make his pitch and close a
sale at one time. It will also be important for ads to
highlight the discernible product attributes, and on

videotex more than one attribute can be focused on.

202

Successful advertising will need to be aimed at helping
consumers fulfill significant needs, needs which would

require additional information to satisfy.

So, where is the advertisers' place in the evolution of
videotex? Advertising will be a key support, an accepted
institution, offering a mix of old and new ideas that will
help advance videotex as an information bridge between the
individual and the information provider. Like other media,
the diffusion of a new technology will be a function of the
advertising support it gets. Videotex has many unique
benefits to offer marketers and consumers by offering the
benefits of many media all in one package and one day it

should be as prevalent as television.

APPENDIX

Videotex Study 1622 F Spartan Vill e

 

 

October 1982 East Lansing, MI. 48 23
Chris Lockhart ' (517) 355-9 61

Name Title

Company Name

 

The provided information should be used only in ways not identifiable
to myself or my company.

 

 

nigggtigggx Most answers require only short descriptions. If
more space is needed than is provided, either use the back of the
page or another piece of paper.

1. What experimentation/media.usage has your company participated
in.with regards to videotex or interactive television?

2. How many months has your company been involved with videotex?

3. Was videotex recommended by your agency?
YES NO

 

 

4. What type of service did you provide?

Information Access (directories. bulletin board)
Transactional Service (shopping, bank-at-home)
Information Processing (sponsorship of games, quizzes)
Communication Service (opinion polling)

Straight Advertising (as in magazines)

 

 

5. Please describe the frames (advertisements) contents, or if
possible, provide graphic representations.

203

6.

7.

8.

9.

Are your company's plans for videotex aimed:
Locally?
Regionally?

Nationally?

 

 

What products/services were advertised on videotex?

The demo aphic composition of your consumers for the
products services shown on videotex is typically:

 

 

 

 

AGE: under 18 INCOME: under $10,000.____
18-24 "____ 10,000-14,999 ____
25-44 _ 15,000-24,999 __
45-65 _ 25.000-“9. 999 _
over 65 ‘____, 50,000 plus
RACE: Caucasian. ____, PROFESSION: Housewife ____
Black _ Blue Collar __
Spanish _ White Collar __
Oriental _ Professional _
No Preference‘___ Other
SEX: Male ____, EDUCATION: Elementary School or less
Female Some High School
Both ____ High School Graduate
Some College
MARRIED: YES _____ College Graduate
NO ____. Graduate Student or more
STAGE OF FAMILY
IJFE CYCLE: No Children ____ LIVE IN: Major City
Children under age 6 Suburbs
Children 6-17 only _ Small Town
No Children under 18 Rural Area

 

 

What features of videotex are most attractive to your company?

Why?

10.

11.

12.

13.

14.

15.

16.

What marketing/advertising goals were set for videotex ?

What marketi advertising strategies were used in presenting
your products services?

How was your company's image portrayed?

a. No attempt to create an image was made
b. Consistent with portrayal in other media._____
c. Other (please explain)

 

Were product/service prices listed? YES NO

Were any promotions involved? YES NO
If yes, what type of promotion?

 

 

Coupon Premium Offer
Refund Contest/Sweepstake
Price Off Trade Premium

Special Event

Is co-op advertising part of your company's plan for videotex?
YES NO

 

 

Was the videotex advertising designed to be similar to the
advertising used in other media? (please elaborate)

YES NO

 

 

17.

18.

19.

20.

In regards to a hierarchy-of-effects model, which step was
the advertising for each product/service aimed at impacting?

a. Product Awareness
b. Product Knowledge
c. Product Liking
d. Product Preference
e. Product Conviction
f. Actual Purchase
g. Attitude Change
h. Other

 

 

 

 

 

 

 

 

What type of control will be required for continued use of a
videotex system to advertise on? (instant updating, etc.)

What improvements or requirements are necessary to upgrade
videotex to where your company will be satisfied with it as
a viable media alternative?

What quantifiable results were used to evaluate the success
of the videotex venture? (please elaborate if possible)

21. What type of pricing scheme would be favored by your company
for use in buying space on a videotex system?

a. A cost-per-thousand accesses charge

b. A per-frame(s) used charge

c. A combination of (a) and (b)

d. A flat fee to be on the system

e. A flat fee, plus cost-per-thousand charge
f. Other

 

22. What price range does your company consider efficient and
economical for a videotex system to charge (and one you
would expect to pay)?
*Answer with the answer from 021 in.mind--answers g and);
would require checking a CPM and Per-Frame or Flat Fee response.

CPM Charge: under $10 Per-Frame Charge: under $150

 

 

$10-20 _____ (y°‘rly) $150-450

$21-50 __ $451450 __

$51-75 ____ $751-1ooo ____

376-125 __ 351001-1250 __

over $125‘____ over $1250 ____
Flat Fee: to per year

 

 

23. What percentage of your advertising budget was (would be)
allocated to videotex?

was WILL BE IN 1985 WILL BE IN 1990
___Isstimaisl__. .___Lsstinaisl_.

a. Less than 0.505
b. 0.50 to 0.99%
c. 1.0 to 4.99%
d. 5.0 to 9.99%
e. 10.0 to 20.0%
f. Greater than 20%

g. Videotex will not be
a viable alternative

h. Do not know

 

 

 

 

24. How satisfied are you with your advertising agency's knowledge
of videotex? Our agency is .

Yerxzésiisfiad 10--9--8--7--6--5--4--3--2--1--0 Ysrzzniesaiisfisd

25.

26.

27.

28.

What penetration level (of TV homes) does your company consider
sufficient to make videotex a viable alternative to the other
media?

a. Less than 0.5%
b. 0.5% to 0.99%
c. 1.0% to 4.99%
d. 500% to 9.99%
e. 10.09% to 20.0%
1'. Greater than 20.0%

g. Videotex will not be
a viable alternative—

h. Do not know

 

 

What future plans does your company have for using videotex?
a. None

b . More Experimentation
c. Do not know

d Greater.Use (please elaborate)

 

 

 

Has your company been involved in experimentation with:
a. Cable

b. Satellite TV

c. Videodisc/Videotape

d. Direct Broadcast Satellite
e. Low Power Television

 

 

Lastly, could you provide or list some of the responses that
have been received from consumers who viewed your advertising
on the videotex system. Thak you.

B I BLI OGRAPHY

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Hudson, Graham. "Prestel: The Basis of an Evolving Videotex
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Jervey, Gay. ”Y & R study: New life to singles."
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Kaatz, Ron. Cable: An Advertiser's Guide to the New
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Kriesman, Richard. "Teens' role grows in family's grocery
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Lazarus, George. "Survey: Consumers often choose store over
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Leblang, Paul. "New Electronic Media: Retail Opportunity."
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Levine, Richard. "Broadening the Business Focus: Dow Jones
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219

Lockhart, M. Christopher. "Containing Personal Information:
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Lockhart, M. Christopher. "Home Shopping...and He Said, ”Let
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Lockhart, M. Christopher. ”The Advertising-Demand-Price
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Lockhart, M. Christopher. "Videotex and the Science
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Loker, Elizabeth. "Where Videotext Fits in the
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Madden, John C. "Prospects for Videotex and Teletext."
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Maher, Thomas M. "Comp-U-Claim: An Electronic Buying
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Malloy, Rich. "Commentary: Personal Computers and Videotex."

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Marks, Jill. "The Long Road to Two-Way." TVC, July 1, 1982,
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Metzgen, Humphry. "Making Money From Teletext." Presented at
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Miller, Darby. "Videotex: Science Fiction or Reality?" BYTE,
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Mitchel l , Shirley . "Appea 1 ing to Shoppers Through A CRT
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220

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Moozakis, Chuck. "Local Advertisers: Why We Use Cable." TVC,

Morse, R. C. "Videotex Explosion: Developing the Technology
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Morse, R. C. "Videotex Update." Cable Marketing, October
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"MNS Finds Good Consumer Awareness." TVC, December 15, 1981.

Murray, George B. "Videotex Revolution will Change Face of
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Neustadt, Richard M. "Privacy and Videotex Systems." BYTE,
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Nisenholtz, Martin. "Graphics Artistry On Line." BYTE, July
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”O & .M Exec Takes on the Questions About New Media."
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Oliver, D. R. and R. Sugden. "Viewdata and the ICL Bulletin
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"Optical Visual Information System Hi-Ovis." The Visual
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221

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Pollack, Andrew. "Introducing 'Tele-Shopping'." NeW' York
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"Programming & Service Strategies for Two-Way TV & Viewdata
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"Q & A on the issue of Telecommunication." Editor &
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Radolf, Andrew. "Knight-Ridder to Test Home Electronic
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Reiss, Craig. "The Dark Side of Cable." Marketing & Media
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“Ripley's Believe It or Not!" Lansing State Journal, July 7,
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Scheley, Stewart. “Government, Operators Face Issue of Cable
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Schittel, Hans-Peter. "A Field Experiment in Text
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Schorin, Gerald A., and Bruce G. VandenBergh. "New world
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222

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Sigel, Efrem. Videotex: The Coming Revolution in Home/Office
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Spindle, Les. "A World of Information." Radio Electronics,
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"Storm clouds gather over cable front." Advertising Age,
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Sullivan, Bill. "Cabletext: Into Its Second Year Via
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Taylor, C. Thomas. "The GTE Medical Information Network."
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"Teleshopping: The Future Is lknv (Non-Store Retailing: Its
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"Teleshopping: The New Electronic Marketplace." The Yankee
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"Teletext and Viewdata: America Plays Catch Up.” Economist,
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223

Thayer Jr., G. B. "How to Choose the Competitive
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"The Computer as a Retailer." The New York Times, January 9,
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"The Television Explosion." A NOVA broadcast, June 12, 1982
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"The Why's and Wherefore's of Text Transmission."
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Tjaden, Garold. "The INDAX Two-Way CATV Network for Videotex
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Trachtenberg, J. A. "Taking Inventory of Video Shopping."
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"Transactional Services will Support Videotext, Experts
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Truxal, Carol. "Americanizing Videotex." IEEE Spectrum,
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"Two-Way Cable Television: An Evaluation of Community uses
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Tydeman, John. "Videotex: Ushering in the Electronic
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Tyler, Michael and Hilary B. Thomas. "Cost Model Plus Field
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“U.S. in Need of Videotex Primer." Electronic Media, June
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"Video Mail Order Network Set for Early '83 Launch."
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”Video Shopping May Face Resistance, Says Report." CableAge,
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224

"Viewdata Popular" with Businesses in UK." Computer
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"Viewtron Looks Good as a News Medium." Editor & Publisher,
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Waring, Paul C. "Cost Profiles & Consumer Acceptance."
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White , James A. " IBM Says Orders , Shipments are Strong ,
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"What Price Immediacy?” E-ITV, October 1981, p. 36.

Wicklein, John. "Guaranteeing Diversity' in. the New
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"Window on the World: The Home Information Revolution."
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Winsbury, Rex. "Viewdata in Banking: Revolutionizing the
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"Zenith Striking Gold with Pay TV, Cable Hardware."
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