• by Joe Mandese  @mp_joemandese, February 14, 2007

Of the many intellectual properties that have attracted Spark Capital and a group of potential strategic partners to fledgling ratings firm erinMedia one is a patent for a new technology that has the potential for transforming not just media audience measurement, but the integration of media exposure and product usage data that some have long described as the "Holy Grail" of marketing and media research.

The patent, which is still pending in the U.S. and key international markets, is the heart of a sophisticated TV remote control that would enable marketers and agencies to track what people were doing with their TV sets, as well as other media and, perhaps most importantly, what consumer products they buy.

The remote control, dubbed "Remo" by its developers, is actually a patent that would be owned by ReacTV, the interactive TV programming and advertising service being developed by Florida real estate tycoon Frank Maggio, who also owns erinMedia. The two services are inextricably entwined, and Maggio has said he needs erinMedia to be able to deliver the kind of second-by-second commercial advertising ratings it has vowed to develop because it is a critical component that would allow advertisers and agencies to know what ReacTV's interactive advertising delivers for them.

ReacTV has tried to subscriber to Nielsen's current ratings service, but has been rejected by the TV ratings giant, which on Monday said it was forming a new division, Nielsen DigitalPlus, to create the same kind of digital set-top based audience data that erinMedia and other firms like TNS, have set out to do.

Between them, erinMedia and ReacTV have filed for dozens of patents, 12 of which have been published, and eight of which have already been awarded to erinMedia. Maggio contends it is those patents that give erinMedia an edge over Nielsen, TNS or others in actually developing a digital set-top based TV audience measurement system. What he has not spoken publicly about is how some of his other patents, including the Remo technology, might also be applied in the field of media and marketing research.

But a glance at the formidable patent filing, nearly 47,000 words in all, offers a picture of a device that could do just about anything a marketer, an agency or a media company might want to know about a subscriber who chose to interact with it.

Why consumers would agree to provide such granular information about their media and product usage habits is an obvious question, but it is one that big research organizations including Nielsen and its erstwhile partner Arbitron have been trying to tackle for years, and last week the two of them came together in a formal partnership for Project Apollo, a so-called "single-source" measurement system that would combine Arbitron's portable people meter system to measure TV, radio and potentially other media exposure, with product purchase tracking data from ACNielsen's HomeScan panel.

One of the main criticisms surrounding Project Apollo, and one of the main reasons some observers are dubious about its long-term prospects, is its costs. While the two companies have not publicly disclosed current subscriber fees for the system, Apollo initially was projected to cost each marketer millions of dollars per year.

Apollo's developers have argued that the marketers would generate more than a reasonable return on those costs through greater insights on the relationship between media exposure and product purchasing behavior, and some big marketers have been huge proponents, especially Procter & Gamble. More recently, retail giant Wal-Mart has signed on.

But executives familiar with Remo already are describing it as an "Apollo killer," because it could achieve much of what Apollo's costly infrastructure does with a much simpler and streamlined approach.

Apollo's developers originally talked about installing the system in about 70,000 households, a huge sample by most industry standards, but have scaled that down considerably due to concerns over costs during its evaluation period. Maggio's plan is to deploy 1 million of the wi-fi-enabled Remo remote controls as part of his build out of ReacTV. The devices have PPM-like properties that can measure in-home consumption of all media, including the ability to scan bar codes on printed media, as well as in ads and, perhaps most importantly, on the products people purchase.

So far, Maggio has not spoken publicly about how Remo would be deployed, how it would be used as a research system, and how he would get consumers to comply with it, but it all appears to be integrated into ReacTV's ability to offer TV viewers an enhanced TV viewing experience, including the ability to interact with advertisers for promotions, offers, and potentially even commerce. Among other things, Remo could be used by households to order and/or re-order products using its UPC scanning technology. In fact, Maggio is known to be deploying the technology in some of the newer, high-end condominiums he is developing in Florida, and its is being promoted as a household "inventory management" system that would allow home owners to seamlessly order products automatically through e-grocery chains such as Peapod and FreshDirect.

Or as Maggio's patent filing reads: "The remote control can generate a shopping list by scanning and identifying products that a consumer or household consumes. A remote server that is affiliated with a particular manufacturer or distributor can maintain the shopping list as a consumer service. The shopping list service can be a vehicle for promoting product brands associated with the manufacturer or distributor."