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Schwab Will Air Interactive TV Ads

Charles Schwab of San Francisco will air interactive television advertisements beginning in late June in 15,000 households in New Haven, Conn., Palos Verdes, Calif., Kingsport, Tenn., and St. Louis, Mo., according to Wink Communications of Alameda, Calif.

Wink, a four-year-old company that developed the interactive television software Schwab will be using, is currently working with Schwab to select a television spot that would lend itself to this brand-new type of advertising, according to Anne Haack, account manager at Wink.

Schwab declined to comment on the new advertising it will be running.

Charles Schwab is an ideal candidate to try interactive TV ads since the discount brokerage wants investors to contact it directly, said Haack. An interactive TV ad can make that contact immediately and eliminate the necessity of a viewer having to call Schwab.

Wink is currently working with Schwab to determine both what television spots to test and what to offer viewers in these interactive ads, Haack said.

"Creatively, it's a bit of a challenge because their ads are more brand-oriented than direct-response oriented," Haack said.

Although the ads will initially reach only a small number of people, by year-end Wink hopes to distribute its interactive software to as many as one million households in major markets in the U.S., Haack said. She declined to disclose those markets, however, or say whether Schwab plans to run interactive ads in all of those markets.

Besides Schwab, seven other major advertisers are trying the new advertising technique. They include Procter & Gamble, AT&T, Clorox, General Electric, Wells Fargo, Levi-Strauss and Universal Pictures. Wink has also signed up 17 cable networks and three major broadcast networks - ABC, CBS and NBC - to air these interactive television ads.

Some of the stations are using Wink's interactive software to offer viewers additional information about the programs, actors or personalities they are watching, Haack said.

Wink downloads its interactive software from a Unix mainframe at its Alameda headquarters via satellite into cable boxes on viewers' television sets. The software is based on a proprietary protocol Wink calls Interactive Communications Applications Protocol.

Television viewers then see interactive options appearing as text overlay on their TV screens - much like closed captions. Wink runs this text through the vertical blanking interval (VBI) bandwidth on a television screen, a hidden and unused storage of bandwidth. Users can interact with these information fields by clicking on their television remote controls. However, viewers also have the option of suppressing these interactive options by selecting that choice on their on-screen preference menu.

In order for Wink to collect viewers' responses, however, viewers must have a phone line connected to their cable set top box. This is similar to DirectTV's pay-per-view ordering system, Haack said.

Wink then downloads these responses into its Unix mainframe and issues response reports to advertisers, or their fulfillment houses, via e-mail, fax or mail.

Interactive advertisers selling a product can then mail a bill to viewers - or they can streamline the process by having viewers pre-register their credit card numbers (along with special pin codes) with Wink through an interactive field on their television screen. Wink is also making it possible for viewers to register their credit cards through a toll-free number.

Wink has raised $20 million from Toshiba, General Instrument, Scientific Atlanta, NTT, Benchmark Capital and Vulcan Ventures to develop this service.