Ad 2.0 - Part 3 (Reworking Traditional Channels)
Wednesday, November 15, 2006SUSIE GHARIB: Advertising on the Internet is a growing business and it's growing at the expense of traditional advertising. But traditional media companies are fighting back by changing their business models and expanding into the new technologies themselves. As we wrap up our series "Ad 2.0," New York bureau chief Scott Gurvey looks at just what those big media companies are doing to deliver their messages in the age of the Internet.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: ABC-TV puts its prime time network shows on the electronic shelves of Apple's iTunes store. It charges a fee for each download. CBS puts local news from its TV stations on the Yahoo! web site. Yahoo! will sell advertisements and share the revenue. And CNN, after trying a paid subscription-based system for downloading news video, removes the fee but begins each story with a commercial. After first ignoring and then fighting many of the new technologies, the big media companies have now come to accept that consumers want to be in control. The companies are scrambling to find new ways to deliver their messages and to sell a total marketing package involving multiple delivery platforms.
JONAH BLOOM, EDITOR, ADVERTISING AGE: Each of the media owners will have a digital unit. A lot of them are selling them in an integrated way where you would talk to the same sales person about, you know, their podcast offering, their audio offering, their TV offering and their print offering, whatever it might be.
GURVEY: Both the media giants and the advertising agencies now realize that consumers don't automatically skip marketing messages; they skip boring ones.
ANDREW ROBERTSON, CEO, BBDO WORLDWIDE: Our role is to create and deliver the world's most compelling commercial content. That's the business we're in, commercial content. And the good news is, whilst we can no longer depend on buying people's partial attention in the way that one - - we could when we sat and watched "I Love Lucy," the good news is we can earn time with consumers that we could never have earned before if that content is good enough.
GURVEY: American Express is a case in point. Always a multi-platform marketer, television now demands less than half its ad budget. Much is spent on direct mail and in providing unique services to American Express customers. Where TV is used, the messages are designed to stand out from the clutter with first class production effects and compelling story lines.
DIEGO SCOTTI, GLOBAL HEAD OF MARKETING, AMERICAN EXPRESS: The way we think is consumers are in the midst of a conversation with other consumers. So (INAUDIBLE) marketer, you are going to interrupt that conversation, then you'd better have something to say that adds value. And for us, content is the answer to become part of that conversation.
GURVEY: Some of the oldest forms of advertising have entered the digital age. These outdoor billboards can change their messages quickly and some can respond to requests for information from people on the street using their cell phones. Big media and advertisers are also placing their messages wherever an audience might be found. Sony Music, Nissan, Adidas, Toyota and Starwood Hotels are just some of the companies experimenting by running marketing campaigns in an online game called "Second Life," where players create a virtual world. $70 billion a year is still spent on television advertising and to help cope with video recording devices which let consumers skip commercials, the industry is looking to measure commercial viewership separately from program viewership.
PAUL DONATO, CHIEF RESEARCH OFFICER, NIELSEN MEDIA: It's a reaction to these new media. The concern was that with DVRs and time shifting, people would skip commercials and so many in the media said to the advertisers, if you're worried about skipping commercials, why don't we just get down to looking at the data for the commercials specifically?
GURVEY: Wherever you go and whoever you talk to in media and advertising, you hear the same word over and over. That word is content.
TONY GRANGER, CHIEF CREATIVE OFFICER, SAATCHI & SAATCHI NEW YORK: Content that you create, people want to -- need to want to watch, rather than -- you know, it's be tantalizing, be intriguing, you know, story tell, invite, rather than, you know, use the fist to break down the door. It's a completely different way.
MARY BAGLIVO, CEO, SAATCHI & SAATCHI NEW YORK: Selling by yelling is over. In this period of time, with the opportunities to see things any time you want, the content just has to be really, really riveting.
GURVEY: Most technologists agree that we are close to being connected by a low cost, wireless and ubiquitous network, letting us be connected to each other at all times. That means we are the potential targets of a virtually unlimited number of messages. And that is the challenge for advertisers in the 21st century. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
