Maggio Puts 'Reactive Ad' Patents On The Block, Will Anyone React?

by Joe Mandese, Jul 26, 2012, 8:50 AM

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In an effort to accelerate his vision of a “reactive advertising” marketplace in which ads become a form of entertainment content that consumers proactively engage with, think about and then compete to win prizes based on how well they remember it, serial entrepreneur Frank Maggio is putting his patents for it on the block today. The portfolio, which includes one U.S. patent, two foreign patents, and various applications covering reactive advertising, will be sold in a “sealed bid” auction in San Francisco today by patent broker ICAP.

As part of the offering, Maggio will retain a non-exclusive license on the portfolio, which covers reactive advertising applications across a dozen media, including TV, online, mobile, cinema and even print. He will also retain an exclusive license on one key application, the development of a national TV and online game show where commercials are the primary form of content, and viewers at home will compete to win millions of dollars in prizes based on how well they watch them.

Maggio, who has gotten Madison Avenue’s attention several times -- first when as a former Procter & Gamble executive he figured out a way to game a sweepstakes by rival Beatrice that personally netted him millions of dollars in prize money that he parlayed to become a multimillionaire investor, and a second time when he invested in the development of now defunct Nielsen TV ratings rival erinMedia -- is hoping to do it again by enticing some big multimedia company to acquire and develop the reactive advertising marketplace.

After years of development and testing that showed promising results, Maggio said he simply doesn’t have the resources and clout to develop a marketplace around the reactive advertising marketplace following his loss of millions of dollars in Florida’s Gold Coast real estate market crash, where he had much of his personal fortune tied up.

Maggio did receive an undisclosed financial settlement from Nielsen as part of the resolution of a federal antitrust suit he filed against the TV ratings giant, and he sold off erinMedia’s technology patents in a similar sealed auction earlier this year for an undisclosed amount. He said the buyer of the erinMedia patents will remain undisclosed until the buyer makes it public, but he added that it would ultimately “raise eyebrows” in the industry when it does become known.

Meanwhile, his focus is on accelerating the reactive advertising marketplace, and developing his advertising-based game show as part of what he hopes will be an industry shift around the concept.

“When I left P&G 25 years ago, I knew the solution to the advertising problem was to find a way of getting people to pay attention to ads and then measuring how well they paid attention,” he told MediaDailyNews on the eve of the patent auction -- adding that to do that, you also had to educate consumers that the ads they were watching had a reactive component to them. He believes a nationally televised game show is just the way to do that, but it also requires incessant promotion and reinforcement of the concept, which he says he lacked the resources to do.

In tests he conducted of his so-called ReacTV two-hour game show, he says the average view time was one hour and four minutes daily, and that 97% of ads were “watched to completion.”

“Reactive ads work better and there is a stunning halo effect for the advertiser who uses it because it’s a rewarding technology,” Maggio asserts, adding that the key is “consumer education” -- and that a game show that effectively turns home viewers into “Who Wants To Be A Millionaire” contestants, competing for millions of dollars of prize money based on how well they recalled the ads, is just the way to do that.

“My vision is that nobody is skipping the ads, because the ads are content,” he says.

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