Ad Age: In the eyes of senior management, how high a priority is interactive marketing?
Mr. Beausejour: It is very high, but really, it is broader than that. It's the impact of the Internet on the company. [Chairman] John Pepper is passionate about this, and [President-CEO] Durk Jager is very involved in doing strategizing work. I feel there is a good cadre of disciples for [interactive]. The business unit leaders all realize that this is a critical area for P&G going forward.
Ad Age: From an ROI perspective, and specifically in terms of how P&G plans its Web ad budget, how do you gauge Web ad effectiveness?
Mr. Beausejour: There is a lot of judgment, a lot of looking at the data we have today, which is still pretty primitive. We are still at the stage where we're willing to move outside of ROI parameters to get the right level of experimentation and the right models in front of us. But we are not at the narrow-it-down and let's punch out 35 of these units at X dollars CPM.
Ad Age: At what point does interactive marketing get totally funded out of each brand's budget (as opposed to being partially funded from P&G's separate interactive budget)?
Mr. Beausejour: We are definitely heading down that track now. Our next fiscal year (beginning July 1) will probably be our transition year, where [interactive spending] will be a lot more brand-driven, but we'll still have some spending centralized for interactive marketing R&D.
Beyond that, it is really the global business units' responsibility to drive their brands. We are seeing a lot of bite and traction, as evidenced by the number of brands and the number of advertising [models] being developed [for interactive].
Ad Age: What is the biggest obstacle still facing the Internet ad industry in terms of getting major advertisers like P&G to spend more online?
Mr. Beausejour: Balancing involvement with intrusiveness, and balancing content with context. If a consumer is doing a search with a rapid-fire set of clicks, that is a bad time to launch a nice, beautiful ad. If a consumer is deep into a site looking for information on feminine protection, that is a fabulous time to launch an Always ad to help them select the proper product. What we do not want to do is blast 25-second download monsters at people when they're trying to get something done. This is why this medium is so fantastic. But it's also the crux we haven't gotten through yet.
Ad Age: What kind of efforts will be required to get through this?
Mr. Beausejour: Last summer [at the FAST summit], I said there were three barriers [to online advertising]. One is ad models. We definitely have got to get a broader range of ad models and standardize them. The second is measurement and really expanding our concept of measurement from traditional measurement to the kinds of measurement [America Online] and others have been advocating. That is what has happened in the [site] session with the consumer as opposed to how many impressions, how much time have you had with the consumer vs. how many banners. The third barrier is marketers -- us. How are we thinking about this medium, and what that really boils down to is quality of ideas.
Take [Doyle Dane] Bernbach's Volkswagen ad from 1959. If we ran this ad today on the Internet, we could capture the idea of a brand that is poking fun at itself. We would run that picture of a Beetle with a bunch of white space around it, with the appropriate copy. That is an idea that is such a big idea it could flow through whichever media you put it on. It comes back to the quality of the idea.
Ad Age: So where is the industry now, relative to last summer at FAST, on these three barriers?
Mr. Beausejour: I think we have made very good progress. With ad models, we have seen a lot of voluntary guidelines for narrowband ad models recommended. Four of these standard ad units have been developed with 22 variations, so this will simplify things for people in the industry.
With measurement, we have general principles for audience and ad impression measurement that have been recommended, and hopefully they will be adopted by the industry.
And for marketers, every company has got to do that the way its own culture works. P&G has changed dramatically in the last year in terms of where interactive marketing and the Web have come onto the corporate radar screen.
For our advertising agencies, we have encouraged our agency community to develop strong interactive capabilities. We have made it an important criterion for agencies, and I'm very encouraged at the way the agencies are stepping up to the plate here.
Ad Age: Have you made any changes to your agency roster as a result of putting a higher priority on interactive?
Mr. Beausejour: We have not had to do a lot of that, as our agencies have ramped up. We have gone outside our roster, bringing in Red Sky, for example, on specific projects.
As we look at our agency compensation testing that we'll start in July, we will be looking at revenue-driven compensation tests, not media commissions. This will further drive the traditional agency mindset and the interactive agency mindset to collaborate. And that is our vision. I said to all of our agencies a long time ago, 10 years from now there will be dinosaur agencies and digital