But true to his word, and amid criticism that scale would be difficult without the acquisition of a major competitor such as MySpace, Mr. Dauman helped Viacom meet and exceed his revenue goal for the year. "I set what was considered to be a very aggressive goal at a time when people are talking about what was characterized as a small position in digital," he said. "I'm very pleased with our entire organization."
Originally a lawyer by trade and a member of the Viacom board since 1987, Mr. Dauman, 54, officially joined the company in 1993 as exec VP-general counsel. Eighteen months into his current role, Mr. Dauman spoke with Ad Age about his future digital strategy, why fragmentation and targeting are key to success, and why Viacom's pure-play content approach has worked best.
Advertising Age: Do you think limiting your partnerships and cracking down on sites such as YouTube ultimately puts you at an advantage in scaling and monetizing your content?
Philippe Dauman: Viacom in particular is a pure content company, with a lot of our programming being original and owned by us. We have a lot of great brands, and our job as a company, more broadly speaking, is to expand our brands everywhere geographically through every form of distribution. That includes digital. We are making our content very broadly available, as we have in every platform distribution through constructive partnership arrangements. And, in fact, we have arrangements to distribute our content through about every video distributor out there: Microsoft, AOL, Bebo, Daily Motion, Veoh, Yahoo, you name it. And with respect to YouTube, we obviously have this legal matter that's ending between us.
Ad Age: It started as a $1 billion lawsuit. Are you satisfied with the outcome there?
Mr. Dauman: It's pending, but meanwhile it does not impact our strategy. ... We have over 300 international sites with an aggregate media-metrics measurement. We've grown to over 90 million-plus unique visits across our sites on a global basis. Our sites collectively as a media company have grown more rapidly, I believe, than any of the top 12 to 13 to 14 sites out there. But we're very satisfied with our progress and, more importantly, our digital activities in our brands, which tie in to our on-air activities, so we provide our consumers and our advertisers as well as distributors with an immersive, convergent experience.
Ad Age: Could you give us an example of a particular property that's demonstrating that platform-agnostic distribution strategy?
Mr. Dauman: If you take a show like "iCarly," on Nickelodeon ... it has growing ratings on-air, and it inherently has an online component. Fans of the show interact with it online; they create online videos they hope to appear on-air. It reinforces the on-air and vice versa. It's a great environment for advertisers, so it's a perfect example of what we're doing there. We're more than happy that our "iCarly" content can get distributed by fans who put it on their own sites, share it with friends through the Flux platform and can also get distribution through an AOL or a Microsoft, which will bring new fans to the show.
Ad Age: You more than doubled digital revenue in 2007 despite public skepticism that it would be difficult to achieve without the scale of a major acquisition. You did it by managing to create a large enough audience based on aggregate impressions across your 300 web sites. What do you think your prospects are for exceeding those again this year?
Mr. Dauman: We're going to continue to grow from there. We've now achieved scale, which is important. We now have the ability to take what we have to present to those advertisers, a great opportunity for those 360-degree opportunities we talk about. ... It's becoming harder to separate the source of revenue because now everything is being sold together. More than 40% of our online-advertising sales are now part of a convergent deal.
Ad Age: As far as online-ad models go, you've been a big champion of both scale and targetability. How do you see those two working together to meet advertisers' goals?
Mr. Dauman: We invented fragmentation on-air on cable; we believe in fragmentation. We deliver a pure audience. ... There's no better place to launch a brand, be it VH1 or Spike or Comedy Central. You're reaching trendsetters. You're reaching an engaged audience. We believe the way to go online is to work with those brands and to go even deeper and pursue the fragmentation and get people or fans of individual shows, have communities of interest. We have more than 300 sites, and we want that number to keep expanding. ... We've gotten to a point where we have the infrastructure now, the tools to do that more cost-effectively and efficiently. That will allow for narrow targeting as well. As we get more targeted, we get more advertising reach.