Pondering the New Realities of Digital-Age Marketing

Cannes Debate Confronts 'Big Scary Risk' of It All

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CANNES, France (AdAge.com) -- Four media experts discussed the technology-driven changes in the media industry and the consumer this afternoon at the Cannes Debate, moderated by Scott Donaton, associate publisher of Advertising Age.
Participants were moderator Scott Donaton, associate publisher of 'Ad Age'; Maurice Levy, chairman-CEO of Publicis Groupe; Yusuf Mehdi, senior VP-chief advertising strategist at MSN; Tom Freston, president-CEO of Viacom; and Jean-Francois Decaux, co-CEO of JCDecaux.
Participants were moderator Scott Donaton, associate publisher of 'Ad Age'; Maurice Levy, chairman-CEO of Publicis Groupe; Yusuf Mehdi, senior VP-chief advertising strategist at MSN; Tom Freston, president-CEO of Viacom; and Jean-Francois Decaux, co-CEO of JCDecaux. Credit: Pat Denton

Change in society
"The way the consumer is changing is something that has never been seen before," said Maurice Levy, chairman-CEO of Publicis Groupe. "It's not just a change in media, but a change in society. Power has shifted to consumers in a way that has never happened."

As an example, Mr. Levy cited car buyers, who no longer head for an auto showroom but use the internet, make a shortlist, then visit two or three dealers to close a deal. So dealership traffic is way down, but those fewer visitors know what they want.

Yusuf Mehdi, senior VP-chief advertising strategist at MSN, raised the issue of whether media companies will risk of giving up subscription revenue, making content free and investing in new platforms. "It's a big, scary risk," he said. "[But] that is the opportunity. The advertising model is going to open up."

Transforming the company
"We see ourselves transforming the company into a digital, interactive company," said Tom Freston, president-CEO of Viacom. "We currently have social networking. We're putting content on every platform we have."

Mr. Freston said that about 5% of Viacom's revenue now is digital, and its digital revenue increased 100% in the first quarter of 2006.

"We talk about advertising on this panel as if it's some kind of leprosy the consumer wants to avoid," he said. "People will understand that if they download something with an embedded ad they can't skip. Overall it's going to be a mix. Even if you buy satellite radio, you'll listen to advertising-supported radio for local news. It's rarely an either-or situation."

Outdoor not driven by content
"Outdoor is the only media not driven by content," said Jean-Francois Decaux, co-CEO of JCDecaux. "People spend more time out of home ... [so] we haven't got an audience issue. Technology helps us and we can offer more flexibility."

Decaux is doing digital outdoor ads in the subways of Vienna and Hong Kong -- and outside the Palais des Festivals at Cannes. And for French daily Le Figaro, Decaux has to change billboards every morning to reflect that day's front page. "The question mark for us is if the incremental investment we have to put in is worthwhile," he said.

Not every marketer's solution involves new technology. HSBC spent $50 million to put its logo on jet bridges at New York's three airports and others around the world so that financial executives would see the HSBC brand as they land. "That's not digital, it's not high tech, it's just screwing on the logo," Mr. Decaux said. "It's about audience."

Next generation
Everyone agreed the consumer is changing. "It's clear when you study the next generation, they understand the world in a way none of us here do," Mr. Mehdi said. "Give a child a phone to dial and they two-thumb it. Dutch kids start dating through IM-ing. And 'who I am online' is a major part of their identity. They attach themselves to brands through avatars or what they put on blogs. Trying to understand that phenomenom is tough."

"What will drive [digital media] is the rollout of video," Mr. Freston said. "Until now it has been about aggregating text. Video will be transforming in how it changes the consumer experience."

Mr. Levy sees the change as a transformation in a wider context. "I believe what will change consumers' lives is that a consumer is a consumer, a publisher, a journalist, an editor," he said. "I don't believe video on demand will change society. It's more that people have a hunger, a need for exchanging information and creating their own news."

Segments that will die
Prompted by Mr. Donaton about the consequences for media, Mr. Levy said, "There will be segments which will die." He compared that to U.S. cartoon characters that chase each other off a cliff, running as they fall. "I believe that is what will happen to some media."

Mr. Donaton closed the debate by asking what personal fears the internet inspires. He said his own is concern about the amount of personal information disclosed through social-networking sites such as MySpace. Mr. Mehdi said his concerns are for the safety and security of his children online, information overload and data privacy. Mr. Freston cited the struggle to balance finite time with BlackBerrying.

"No one ever goes away," he said. "When am I going to have time to sit back, space out and think?"
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