The Challenge of Keeping Up With the Digital Zeitgeist

MediaWorks Q&A: MTV Networks Chairman-CEO Judy McGrath

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NEW YORK ( -- If you want to know Judy McGrath's thoughts on how MTV Networks is doing on the digital media front, look no further than her company's press coverage. "I'm happy not to be reading stories where the first sentence is about how we're the company that didn't get MySpace," said the chairman and CEO of MTVN. "We've found our own good, strong path, and we're being recognized for it. But I think we've learned some other things along the way."
Judy McGrath
Judy McGrath Credit: Scott Gries

Indeed, foregoing major acquisitions and opting to build scale on a grassroots basis across 300 sites earned the company much criticism over the last several years. When News Corp. acquired MySpace, MTV was viewed as having missed out on grabbing a larger piece of the social-networking pie -- most notably by Viacom's controlling shareholder Sumner Redstone -- leading to the eventual ouster of Ms. McGrath's former boss, Tom Freston.

But a recent $500 million distribution/ad partnership with Microsoft, coupled with recent successes such as "The Hills" (which scored an average 7 million viewers per episode on TV and online) and the video game "Rock Band" (which totaled 2.5 million music downloads in its first eight weeks of release alone), are helping to keep MTVN content top of mind online among its target 12-to-24 demo.

Those projects are also providing Ms. McGrath the opportunity to catch some extra Z's. "There are times when you feel like the zeitgeist has moved on. Nothing keeps me up more hours of the night than that," she said. "We're always looking to serve that important, ever-fascinating demographic. Sometimes you nail it right where they are, and sometimes you are way ahead of them."

On May 8, MTVN will take a broad, multiplatform approach to its upfront presentation in New York, where it will also play up the branded-entertainment model that permeates a growing number of its TV deals. Marketers like Doritos, Dove and Anheuser-Busch are just a few of the clients who've commissioned the network to co-produce branded content, with Unilever's Axe even getting its own dating game show with "The Gamekillers" last fall.

Ms. McGrath, 55, spoke with Ad Age as her company was readying its advertiser dog-and-pony show about her efforts to stay on top of its youthful demo, how MTV has built scale without acquiring MySpace or Facebook, and why branded entertainment is no match for commercial ratings at the end of the day.

Ad Age: Your core audience of young adults is notoriously hard to market to, yet many advertisers still turn to you as an authority on that demo at MTV, as well as all your other networks such as Nick, TV Land, VH1, Spike and Comedy Central. How do you assure clients you're keeping up with everyone on all the different platforms?

Judy McGrath: Everything is changing in the digital age. The amount of data available is really extraordinary to all of us. We work with lots of outside companies and really want to be on the frontline of being able to offer the absolutely best sort of return on innovation, if you will, to anybody who plays with us on all our platforms. We have all kinds of things, like our "Hills" engagement study, where we do things very specific to a franchise like that. Nick has something they call the "true reach meter," which is sort of a way to really measure consumption by kids and family viewers, websites and magazines. It's taking behavioral targeting, but trying to make it as simple and single-source as we can. ... Right now we're really enjoying a good run in digital. People are spending more time on our sites. We're really at the forefront of offering a number of ways for clients to reach this consumer. We can prove our efficacy, change and move on. We just set up a Digital Fusion group which does nothing but create new ways to make those connections, whether it's promoting movies like "Speed Racer" and "Iron Man" or creating a series for T-Mobile, and we have an instant-feedback loop we share with the clients.

Ad Age: You were initially criticized for missing the boat on acquiring MySpace, but when you look at how long it's taken them to monetize their music content, and the backlash with Facebook's Beacon ad platform, do you feel more confident in your decision to make MTVN sites a stand-alone digital network? How is your new $500 million ad partnership with Microsoft assisting with this?

Ms. McGrath: The Microsoft relationship is really turning out to be terrific for us. We're also looking at their opportunity with that, serving in ad platforms, on search, a number of things that can drive even bigger numbers for us online. Obviously that's their expertise, and we have dedicated people working with them non-stop from our ad sales organization to make sure we're maximizing everything they're bringing to the table. Microsoft is turning out to be a really terrific partner.

We also have a relationship with [addressable ad company] Visible World, and [MTVN ad sales president] Hank Close is starting these things called tribes. We're active in all the areas where the action seems to be going right now. If we decide that we're going to do something in [interactive] TV, we always make sure we do it with clients in mind and they have access along the way. There's been as much action in the creating of new models on the digital side of our business as we have been creating new content for our linear screens this past year.

Ad Age: That said, what's your take on all the potential consolidation likely to take place in the portal space? Will MicroHoo, AOLhoo, MicroSpace, et al. be friends or foes to what you're trying to do with MTV online?

Ms. McGrath: To us they're going to be great distribution platforms. We have deals with almost all of them today, and I would assume that would be the case going forward. It's further proof that there's too many portals at the moment. But they're figuring out the future for themselves. They're big, fantastic platforms, and we're looking forward to staying close to them.

Ad Age: What keeps you up at night with MTV specifically these days? The 12-24 demo is always singled out by marketers as the hardest to reach, and you're at the forefront of that.

Ms. McGrath: There's never one finite solution to MTV, and certainly globally it has great resonance. Of course all these brands are incredible platforms with a lot of permission. Especially with MTV, there's so many cycles to it, there are times when you feel like the zeitgeist has moved on. And nothing keeps me up more hours of the night than that. We're always looking to serving that important, ever-fascinating demographic, and sometimes you nail it right where they are, and sometimes you like to be ahead of them. Right now, I'm feeling great about that brand, and what Van [Toffler] and his team have done. All the related brands -- MTV2, MTV Tres, MTVU and all the others -- are really doing great, and "Rock Band" came out of that group. You can't go anywhere without seeing LC ["Hills" star Lauren Conrad] on the cover of something. MTV is in that pop culture place, and I think Van and his team have done a lot, particularly online, to keep the music part of the equity relevant, which is always important to me. We're constantly trying to find the next format, and we've certainly gotten more than our fair share of action out of the reality format. Maybe it's the instant access of the digital age, but it gives us an even better window on what this young adult is like today.

Ad Age: Last year MTV and VH1 held out in the upfront to do deals on program ratings because their commercial ratings were lagging. Do you feel confident enough with MTV and VH1's commercial engagement going into your first upfront based on C3?

Ms. McGrath: We did hold out, and when I look at the stats, what everybody is going to be accepting and the correct measurement of all this will be the C3 ratings. In the first quarter and so far in the second quarter, we held our ground in a way that was really reassuring to me. It wasn't any kind of a real scenario where we had to sound an alarm. VH1 and MTV did a lot of work to prepare for this, and it's really held up. We'll have to stand on C3 along with everybody else. People come to MTV and MTVN and stay with us because of branded entertainment, opportunities with verticals and the chance to do new things. It's almost like we've got two paths to go down with a client. We have to stand up and be counted of course, but we also think we offer the strongest brands in the world, and a creative force that's literally expanded to produce and program virtually anything with a client.
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