CONTROL NEW MEDIA ARTZT SPURS ADVERTISERS TO SEEK GREATER ROLE IN PROGRAMMING

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NEW YORK-Ten months ago, Edwin L. Artzt dropped a bomb on the ad industry. Last week, he helped it emerge from the rubble.

Declaring that the industry has made great strides since he painted a grim portrait of a future without advertising at the American Association of Advertising Agencies' conference last spring, the chairman-CEO of Procter & Gamble Co. kicked off a gathering of more than 100 marketing heavyweights last week.

"We're not here to forecast doom," Mr. Artzt declared. "We're here to grab the new opportunities by gaining better control of our own destiny."

Indeed, big-spending marketers including P&G, General Motors Corp. and AT&T said they're no longer content to just have a presence in new media. They want to control the future of media and marketing.

Crowd reaction was mostly optimistic. Ed Wax, chairman-CEO of Saatchi & Saatchi Advertising Worldwide, New York, applauded the industry's progress since last May and said Mr. Artzt's speech "exceeded my fondest expectations."

But a new-media executive in the audience called the marketers' desire to control new-media programming "pathetic."

There are, of course, major issues that still need to be tackled, ranging from the role of advertisers in owning and developing content in the digital age to the need for industrywide standards and trustworthy audience research.

Drawing up a game plan was the reason for last week's conference, a by-invitation-only meeting of the Coalition for Advertising Supported Information & Entertainment, a joint task force of the Four A's and the Association of National Advertisers formed in the wake of Mr. Artzt's blast. The conference was sponsored by Advertising Age and NBC.

Mr. Artzt echoed his belief that those who control the content will control the future of advertising.

"Content is king, and for advertisers, content is programming," he said. "We have to develop it. We have to share in its ownership, and we have to market it through whatever channels the new technologies deem most effective and most efficient for reaching consumers."

P&G has established a research and development budget for program development, with the first major venture being P&G's recently announced programming alliance with the Paramount Television Group.

"As long as we were guaranteed virtually unlimited access to the vast majority of programming into people's homes, we had no reason to be concerned about access to programming," Mr. Artzt said. "But now we do."

Paying homage to the personal computer "as a formidable future vehicle for advertising and even programming," Mr. Artzt said CD-ROMs and online services are "bound to produce major changes in marketing goods and services to the public."

But he believes that "broadcast television is still the best way to achieve the reach and frequency advertisers need to build consumers' loyalty to our products and services."

Mr. Artzt also clarified his view on the role of agencies in the future-and it's not as TV producers. Mr. Artzt said it's unrealistic "to expect advertising agencies to re-establish the sort of programming infrastructure that was common in the industry a generation ago." Instead, he sees agencies as matchmakers between advertisers and studios.

Philip Guarascio, VP and general manager-marketing and advertising for General Motors Corp.'s North American Operations, agreed advertisers need to be involved in content development for traditional and new media. But he, too, said agencies' role in that model is "as ideamakers and strategic partners, not as doers."

But are agencies willing to take a back seat? Many have been scrambling to come to grips with the programming issue, and several are pushing into TV production (see related story on Page 35).

Mr. Guarascio criticized those in the industry who are "playing in the trees at a tactical level" instead of focusing on the new-media forest.

In addition to hiring a new-media staff and establishing a testing budget, GM is going off the beaten path. It has rented a house in an unspecified interactive TV market to gain hands-on experience. And as part of an agreement with Time Warner, the automaker has spent the past year teaching Time Inc. VP-Multimedia Bob DeSena about its business.

Mr. DeSena, who works exclusively on the GM account, is developing proprietary new-media applications for the automaker that will run on Time Warner new-media platforms from CD-ROM to two-way TV.

"What this is all about is creating proprietary advantages," Mr. Guarascio said.

Mr. Guarascio also announced that GM is the first advertiser to support the Interactive Information Index, an interactive-media research service developed by Arbitron NewMedia, ASI Market Research and Next Century Media, a New Paltz, N.Y., consultancy. The index measures "clickstreams," tracking the buttons pushed on computer keyboards or TV remote controls.

The issue of independent audience measurement is crucial to the future of new media, said Judy Black co-director of interactive development at Bozell and chairman of CASIE's research team.

"Audience measurement should be taken by objective third-party research suppliers and not by the medium being measured," she noted.

Ms. Black said the research committee is calling for standard industry definitions of such terms as "subscriber" and "visits." It's also recommending that Nielsen Media Research measure the impact computer use is having on TV viewing. And the committee is closely watching the results of Arbitron's ongoing Pathfinder study of consumer attitudes and behavior.

Missing from the meeting was the viewpoint of providers of new-media services, an omission several attendees criticized. But others noted the CASIE meeting was one of the first dominated by the views of executives who control some of the nation's largest marketing budgets and will determine the shape of the future.

Joe Mandese contributed to this story.

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