"Digital has become so much more a part of the media mix," says John Montgomery, global CEO of MindShare Interaction, a new unit of the media agency.
NBC's TV 360
One need only look at offerings by NBC -- dubbed "TV 360" digital components -- to understand how much. These include online briefings relating to each TV episode of "Law & Order: Criminal Intent" available at NBC.com; exclusive content for "30 Rock," a comedy series by Tina Fey of "Saturday Night Live," that won't be seen on TV; and online-only episodes of "The Biggest Loser" featuring contestants who didn't make it on-air.
"Media owners have been holding out," says Louis Jones, exec VP-managing director at MPG's MediaContacts unit. "In the last six months, they've just embraced that their world is going digital."
As a result, traditional media agencies are adapting their operations. "We don't want to miss the show," Mr. Jones says. Broadly, the changes aim to improve dissemination of digital expertise within agencies' global networks and tie agencies' national and local media experts more closely to their digital counterparts.
Consolidating media functions
"What we're seeing on an industry basis is a consolidation of the online media function with mainstream traditional media planning and buying agencies. It's been forecast for a while," says Kurt O'Hare, president of O'Hare & Associates, a recruitment company.
In some cases, the changes are a simple matter of relocating personnel or hiring new talent. Mr. Jones, for instance, recently relocated to New York from Boston. At MPG's New York headquarters, he works closely with Bill McOwen, exec VP-director of national broadcast.
At some agencies, the changes are deeper and involve department reorganizations or changes in job responsibilities. MediaVest leader Donna Speciale recently revised the charge of all her senior directors. "They used to be solely broadcast focused," she says. "Now, they're video neutral. When they're dealing with networks or other suppliers, they think of their brand across all platforms that are video-based."
From broadcast to video investment
Formerly called U.S. Broadcast & Programming, Ms. Speciale's group now goes by the moniker Video Investment & Activation, and she holds the title of president. "We're really living and breathing the clients' business from a much more holistic approach," she says. "It's a mind-set change and a knowledge-base change. We're following the consumer."
That means understanding the interplay between online and offline content as consumers increasingly shift time away from watching TV and devote more attention to the Internet. Marketers are pouring more money into online advertising: According to eMarketer, online ad spending will increase from $12.5 billion in 2005 to $28.5 billion in 2010. It ranges from paid search to rich media to display ads and sponsorships.
Even though buys made on broadcast and cable are different from those made on the Internet, "there has to be coordination among the different channels," says David Hallerman, senior analyst at eMarketer. Consumers use the Internet to research particular topics, and marketers that don't exploit that are missing out. "They might not do a search for, say, Johnson & Johnson baby oil, but they might do one for diaper rash," he notes. "Marketers can tie into that behavior."
Holding the consumers' attention
Another challenge is to hold consumers' attention as they switch between media. "Brands today have to make themselves entirely relevant," says Nigel Morris, CEO and architect of Isobar. "Online, if you create something that's mediocre, you've got them for a second or two before they click away. If it's great, you've got them for minutes or even hours. How much would it cost to buy that? Brands need very specialized agencies to help them navigate it."