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New media debate dominates ad:tech

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The ad:tech conference in San Francisco last month was reminiscent of the dot-com bubble days, with thousands of advertising and agency executives debating new media, how to measure it and which models will succeed.

However, the show is now three times as large and is being held at convention centers instead of in hotel ballrooms, the industry is maturing, and the business models really work (as opposed to looking good on paper for an inflated IPO).

"There is a much more stable foundation of marketers in the industry," said Brian McAndrews, president-CEO of online marketing company aQuantive, during a keynote presentation. "Marketers are not getting into digital because they have to, as a knee-jerk reaction, but because they recognize that digital is a strategic part of their business. It is where their companies are going."

At the conference, which drew more than 11,000 attendees, the hot topics were new platforms such as mobile marketing, online video, social networks and user-generated content—and what these will do to traditional media.

"In the next five years, we will be a lot closer to all-digital," McAndrews said. "The Web will replace the TV as the central place for video commercials."

He also said that the move to on-demand TV will cause a dramatic change to the traditional advertising model.

The days of the 30-second spot are numbered, McAndrews said. Instead, people will stop and watch commercials only if they provide relevant, useful content, such as long-form videos on products they are considering buying. That bodes well for b-to-b advertisers that are selling high- consideration products and services.

At a panel discussion on the state of the industry, advertising and agency executives talked about emerging media, such as user-generated content, and the changes they will bring.

Bob Moore, chief creative officer at Publicis, said marketers are in danger of losing control of their brand strategy if they put too much emphasis on user-generated content. "Brands need to know what stories they want to tell, and the story can't start with a user-generated piece of work," he said.

However, he added, "As long as you have true brand vision, open dialogue is great."

Moore also said that digital expertise is a must-have skill for new hires, even at a full-service agency such as Publicis. "We don't hire anyone who doesn't have digital in their portfolio," he said.

New metrics for new media

There was much conversation about developing new metrics for emerging media such as social networks, online video, webcasts and user-generated content.

"There are no real metrics to measure engagement," said Sheryl Draizen, senior-VP-general manager at the Interactive Advertising Bureau, referring to the holy grail of measurement.

Jamie Byrne, head of product marketing and ad strategy at YouTube, agreed.

"You'd be hard pressed to find one engagement metric that can be used to evaluate all the different campaigns," he said, referring to online video campaigns running on the social networking site.

Some of the most common metrics YouTube advertisers and content providers measure include how many users subscribe to their video downloads, the number of videos watched, rankings and videos passed on.

"I don't think we're there yet," Byrne said. "I don't see a standard industry metric on the horizon."

Sean Carver, director of buzz marketing at Microsoft Corp., said his marketing group has two sets of metrics. "There are separate metrics for the people who approve the budget, such as search ads clicked on, time spent online, number of unique visitors," he said.

"Once we get them signed off on, we can worry about the metrics that really matter," he added, pointing to metrics around buzz generated and brand awareness, although those are not yet standardized.

Daniel Stein, CEO and founder of digital content marketing company EVB, said online video and user- generated content have the potential to flip the traditional media model on its head. "It's always been about spending as little as you can on production and the rest on media," he said. "That might be upside down if we're talking about the ad as content."

Online media buys are much less expensive than TV media buys, and marketers can post free videos on their own Web sites or on social networking sites such as YouTube.

Marketers as TV programmers

"Suddenly, every marketer is in the TV programming business, trying to create hits," said Gaurav Misra, VP-programming at MTV/VH1.

During a session introducing the Advertising Research Foundation's "Online Advertising Playbook," released last month, ARF Chief Strategy Officer Taddy Hall said the Internet has had an impact on all advertising.

"The Internet is making all advertising more interactive, more accountable and more relevant," Hall said. "All advertising is now being held to a new standard of accountability—what did my advertising do to generate demand?"

Stephen Kim, director of global research at Microsoft, said research is the key to developing effective online advertising. "We have to understand the customer's behavior," he said. "Are they online? Where are they going? How do they consume information?"

To understand business customers' behavior, Microsoft's research team followed people to work to study their information-gathering habits and watch what they did online. Microsoft gained insights about how people are "information snacking" on bits and pieces of news and content at various times of the day.

"We can no longer follow the pattern of interrupt and repeat," Kim said, referring to the traditional model of mass advertising.

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