Business 2.0,
May, 2005
Step on This Ad
A new marketing technology moves from the dance floor to a store
near you.
BY THOMAS MUCHA
A few weeks ago, I was at the AMC River East 21 movie theater complex
in Chicago. As my 4-year-old daughter and I headed for the 1 p.m.
showing of Robots, we came across a boisterous crowd of about a
dozen people. This group had encircled a spot on the tiled theater
floor, eerily aglow with light-projected advertisements for Jelly
Belly candy, Pepsi (PEP), and Pop Secret popcorn. As kids and adults
stepped and leaped into the 6- by 8-foot space, the digital Pepsi
logo undulated beneath their sneakers and outstretched hands and
the popcorn and jelly beans scattered. My daughter joined in, giggling.
After 10 minutes of chasing interactive brand messages around the
floor, we finally escaped to our seats. “That was fun,”
she squealed.
Any marketing tool that commands the attention of a discriminating
4-year-old must be onto something. But Reactrix Media Systems, the
San Carlos, Calif., company behind this emerging technology, is
also attracting adult marketers at Adidas, Best Buy (BBY), McDonald’s
(MCD), and other large companies. The pioneering technology has
lured some of Silicon Valley’s biggest and brightest investors
too, including Mobius Venture Capital and former Yahoo (YHOO) CEO
Tim Koogle, who sits on the company’s board. “Reactrix
is taking the interactive experience directly into the retail environment
and creating an entertaining, social experience where consumers
shop,” a beaming Koogle says of his latest venture.
The nifty technology was created by Matt Bell, a Stanford MBA who
livened up rave parties in Palo Alto by combining an infrared camera
with a projector and sophisticated software. By capturing a person’s
outline and instantaneously processing that digital information,
Bell’s techno toy allowed dancers to interact with images projected
onto floors or walls. He soon became the most popular DJ on campus.
But art turned to commerce when an entrepreneurial Stanford professor
saw the marketing potential of Bell’s groovy invention, and in 2001
Reactrix was born.
The company has since installed nearly 100 interactive marketing
displays in movie theaters, malls, retail outlets, event halls,
and other locations in the United States, Mexico, and Canada. Thirty
more are being rolled out in Seoul, Korea. “In a world where
consumers are pushing advertisers away, we have the ideal form of
permission-based marketing,” says Reactrix CEO Michael Ribero.
McDonald’s last week placed interactive systems from Reactrix
on three tables at its new 50th-anniversary mega-restaurant in Chicago.
“We can shape the experience into anything McDonald’s
wants to do, from designing Happy Meal promotions and interactive
games to reinforcing healthy food messages,” Ribero explains.
Reactrix has also installed displays in Sam Goody stores, Sony’s
(SNE) Metreon shopping and entertainment complex in San Francisco,
and the swanky Tabu Ultra Lounge at the MGM Grand in Las Vegas,
where the tables are so popular that it costs $1,200 to reserve
one for a night. The cost for advertisers, meanwhile, is relatively
low: Reactrix licenses its technology for about $2,000 a month.
Consumer involvement, of course, is what’s really for sale
here. On average, consumers will interact with the Reactrix ads
for 3 to 4 minutes. (Ribero says that number jumps to 15 to 20 minutes
when they have time to kill, such as before a movie starts.) This
deep involvement produces results: The company claims consumers
recall Reactrix-displayed brands as much as 86 percent of the time,
vs. 5 percent for TV advertising. This higher recall and brand awareness
can go straight to the bottom line: After California clothing store
5-7-9 installed the displays, sales of Reactrix-featured T-shirts
jumped 30 percent. And Navtech, which makes in-vehicle navigation
systems, says its sales leads tripled after it placed the displays
at trade shows in Detroit, Paris, and Nagoya, Japan.
Novelty may not be the only driver here. Ongoing studies that Reactrix
is conducting with Carnegie Mellon, Stanford, and the University
of Missouri suggest that this new marketing technology may work
on a deeper biological, neurological, or physiological level. “We’re
learning that when humans use physiological and cognitive processes
-- when they concentrate and manipulate -- it leads to higher memorability,”
Ribero says. “There is a huge difference between passive viewing
and active participation.”
Of course, not every brand is right for the interactive sell. “It
has to fit with the overall gestalt of the brand,” says Debbie
Millman, president of branding and design consultancy Sterling.
“If it’s whimsical, like Pepsi, then I think this is
wonderful. If it’s De Beers diamonds, maybe not.” And
in a world where consumers are already bombarded by thousands of
advertising messages every day, there’s also the problem of
oversaturation. “You run the risk of getting under people’s
skin in a violating way,” Millman warns.
But so far advertisers are lining up to try it out, and Reactrix
has raised $23 million from eager venture capitalists. “We
take a consumer and put them in the midst of a product story and
let them control the outcome,” Ribero says of the company’s
early success. “We connect them in a deeply emotional way,
which results in higher recall and the kind of consumer behavior
that every advertiser is looking for.” Not to mention the
stuff that 4-year-olds and ravers like too.
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