H-P's 2% Solution

The Right Amount to Budget for Emerging Media

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NEW YORK (AdAge.com) -- Scott Berg, Hewlett-Packard's worldwide media director, is spending about 2% of his media budget on emerging media technologies, like mobile, RSS feeds and podcasting, and he expects that number to stay pretty much the same for the future.
Scott Berg
Scott Berg

"We'll probably keep about 2% to 4% in emerging technologies, said Mr. Berg, speaking on a panel on cross-border marketing at the International Advertising Association's Global Marketing Summit in New York today. The reason? "Things that are working will be shifted into the digital media mix. I anticipate we'll lose about 80% of those dollars, but the other 20% will make up for it."

He's also interested in the growing market for gaming, so more of his budget could migrate to games. About 80% of Hewlett-Packard's emerging-technology efforts are happening overseas, especially in Asia, where technology is better developed than in the U.S. He cited Singapore, Japan and China as particularly active markets.

Incentive-based pay
Separately, Mr. Berg predicted that there may be more incentive-based compensation for media shops. "We're looking at it," he said.

Virtually all the speakers at the IAA conference referred to China frequently. For IBM Corp., the challenge in China is to overcome the perception that the whole company, not just the PC division, was sold to China's Lenovo, said Greta Wilson, a senior manager in IBM's worldwide advertising department. "We have a big image adjustment to do," she said.

In China, marketers often need to take a different approach when they move beyond the big, first-tier cities into the second tier, where grassroots efforts and Internet campaigns are often useful.

"We recently launched an interactive campaign," Ms. Wilson said. "We'd get 300,000 to 400,000 impressions in the U.S. in two weeks. You get 3 million in China."

In the conference's final panel, "Reaching Tomorrow's Consumers," a British Telecom executive described a simple service embraced by the company's U.K. subscribers, who were plagued by telemarketers' phone calls. BT devised a service, free to subscribers, to block calls from telemarketers, said Julie Woods-Moss, VP-marketing and global services at BT. In less than six months, 6 million people registered, she said.
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