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April 24, 2007

The State of the Industry

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Drew Ianni followed me from the keynote presentation into this morning’s State of the Industry discussion with panelists Ted McConnel (Proctor and Gamble), Sheryl Draizen (IAB), Barry James Folsom (Motorola) and Bob Moore (Publicis USA).

Okay, I’m a little flustered. I wandered into the wrong room (gaming? What do I care about gaming?) and by the time I found the right room it was filled and the nice security lady refused to let me in despite my pouty lip, blazing dimples and me stuffing my press pass in her face. So, instead of learning about behavioral targeting, we’re going to get updated on The State of the Industry. You still love me, right?

By the time I got here, Drew was questioning the panelists on what’s on their top of mind and what’s keeping them up at night. If I remember correctly, this is one of Drew’s most favorite question to ask Ad:Tech panelists.

Bob shows us what’s on his top of mind today by showing us a picture of an important consumer — his 9-year-old daughter Elliot (today’s her birthday. Happy Birthday, Elliot!) eating an ice cream cone. What’s keeping him up at night is that if marketers aren’t careful, the industry is going to become more about algorithms and less about creativity. Zing to the search marketers out there!

What’s top of mind for Ted is yesterday’s MySpace event where he learned that to users MySpace is like home. It’s lovely. He says you can take that to the bank about how to do good marketing on MySpace (take that to the bank? Who says that?). What’s keeping Ted up at night is the idea of the business model. Creative and media need to collaborate much more deeply than they are today.

The message and "the what" is also keeping him up at night. He says it’s typically crafted into taglines that are nicely condensed. It’s what you do, not what you say that’s meaningful on the Web. Ted wants to find better ways to do things for people rather than by carefully crafted words.

Barry’s top of mind is the psychological contract that the consumer has with the device or the box that they use. (Say what?) What keeps him up at night is how we can create serendipity where an ad reaches a consumer at the exact moment they’re thinking about that product. It’s the "Oh, I was interested in that and now there’s an ad for it" effect.

What’s on Sheryl’s top of mind is how do we build a medium that has world class measurement guidelines and help marketers leverage a medium in a way that makes the most sense for their brand. What keeps her up at night is how it’s easier to get guns than it is a driver’s license but she’s not going to go there. That’s good; it’s far too early to talk politics. The other, more relevant, thing that’s keeping her up at night is about rich media applications. How do we stay ahead of everything that’s going on in the industry and make sure we’re educating the marketers and the agencies about what’s happening? It’s not an easy job. Every day something else is coming up. Sometimes we forget that this is a new medium and that we need to catch up to where the other media are.

Drew restates from his keynote that 99 percent of ad revenue is going to the top ten sites. He says that unless this proliferates a little more the rich are going to get richer. What says the panel?

Ted suggests that if this is happening it’s because in electronic media the rule has always been "winner takes all". It’s been standard in anything that’s electronic. If it’s the best everyone can have one they do. People will tune into the best content.

Regardless of all that, Ted doubts Drew’s stat is actually correct (fight!) and says he doesn’t know where it came from. He argues that it creates an unfair view of the Web economy to simply say the big players are winning. He also takes a shot at PPC guys due to a conversation he had at SES in 1999 but I won’t repeat it because it will only make you angry. [1999? Is he serious? Does he know it’s been a million years in Internet time since then?–Susan]

Sheryl says in terms of the top ten sites getting the majority of the revenue, it may be a truism, but what’s really happening is that marketers are becoming smarter in how they’re spreading and allocating their budgets. A few years ago we saw auto marketers just marketing on auto sites. Today they’re branching out and targeting lifestyle sites, teen sites, etc. As a result, it’s given smaller sites additional opportunities for inventory. I think we’ll start to see this spread more, says Sheryl.

Drew asks about the consumer generated media craze and how marketers should approach that. How do we add value to the content that’s out there?

Bob says it’s a tough question. He asks how many people are really creating things?

Um, I think a lot, Bob.

Ted heard a quote that said the single thing driving the Web is access to publishing. It’s powerful; especially if you think what consumers have going with the virality of this stuff and consumer generated syndication. It’s a new kind of editorial and has made way for the development of an organic video business where the best stuff will rise. He says that there are perfect metaphors available but that we haven’t reached that bridge yet (huh?). It meets the need somebody has. He’s looking forward to the new models that reward people from their CGM. Yes, aren’t we all, Ted, aren’t we all?

Sheryl says we need to be careful about defining digital video as just UGC. If we do that, we miss an opportunity at leveraging what digital video can do as an advertising medium. In terms of professional created video content, we’re going to start seeing more and more being created. Stuff like, "if you missed Lost tonight, watch it on ABC.com". Marketers should think about the enormous opportunity they have to combine the sight, sound and motion of TV with the increased targeted measuring and accountability of the Internet. That combo creates a very valuable proposition for marketers. Digital video is NOT only user generated content.

Barry says that words create worlds. If you don’t have the right word to frame it you’re misusing it. It’s not UGC video, he says, it’s short form video. It’s about video snacking. (Speaking of snacking, there are doughnuts in the lobby. Doughnuts!)

Drew asks what’s the ad model that supports video snacking? Is it sponsorship oriented?

Ted doesn’t really answer the question but says television is so totally far ahead of the Web. Video snacking is about the story and how compelling it is. The production quality doesn’t matter if the story is compelling.

Bob says brands need to know what story they want to tell. If you’re connected to your consumer, they’ll jump into the story and help you create it. The story has to start from someplace though and it has to start from you.

Drew asks if the conversation is shifting from brand to consumer? Can you calibrate how much control you give to consumers? Or do you need to just let it go?

Bob correctly responds that consumers have a lot of say and a marketer’s ability to manipulate the conversation is gone. There’s no limit to it. You can’t put handcuffs on it and the minute you try, you’ll have open rebellion.

Ted says you have to either try to stop it, try to support it or leave it alone. (Ted confuses me each time he says something.) He argues that we’re missing a legal framework for how to deal with this as a society in terms of who benefits and who gets hurt and what kind of recourse to people who get hurt from.

Closing things up, Bob says it’s a golden era for marketers. There are more interesting ways to reach people than ever before. Given that there are so many ways for users to opt out, marketers really have to create brands as destinations. You have to offer people something and form an emotional connection with them. You have to create a brand that people want to hang with. Like the Mac guy. Who doesn’t want to hang out with the Mac guy? He’s totally adorable.

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