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Reconfiguring Marketing and Media Services for the New Age

Five Key Points From a 'Strategy & Business' Report

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For Advertising Age readers, this upfront season is deja vu all over again.

You heard last week that Interpublic Media, the planning and buying division of Interpublic, became the first large agency to sign an agreement to buy advertising with TiVo. The deal comes only six years after readers of this column learned that "TiVo is revolutionary. Like most revolutions, this one is about control."
Develop formats to promote interaction with audiences. The media and marketing tradition is one-way -- whether product or service, we package for you -- and hard to break. ALSO: Comment on this column in the 'Your Opinion' box below.
Develop formats to promote interaction with audiences. The media and marketing tradition is one-way -- whether product or service, we package for you -- and hard to break. ALSO: Comment on this column in the 'Your Opinion' box below.

Online auction
Last week also heralded the news that a group of marketers is testing an online marketplace for the auction of commercial time. That idea was floated here in Y2K. "Advertising's value chain has significant inefficiency built into it," this space mused. "Why not an electronic B2B market for advertising time?"

And if you're marveling at that VH1 ad campaign showcasing the network's ability to customize and deliver infotainment and marketing across seven platforms, well, you knew about that in 1999. "The turn of the century," you read, "heralds three inviolable business axioms: Manufacturing and distribution technologies are leading to the commoditization of most products and services; broadband technologies enable low-cost mass customization of audiovisual experiences; and the only way for a company to surmount the former is to apply the latter."

Five key points
But now that marketers and media have accepted the fact that disruption is upon us, what should they do? In a forthcoming report in Strategy & Business, John Frelinghuysen, Chris Vollmer and I propose five ways marketers, media and their marketing-services partners need to reconfigure themselves.

1. Shift spending and management attention to digital media. The embrace of digital media still is not widespread. "While [digital media] is cost effective," one consumer-products senior marketer told us, "TV is sexy and fun." But consumers are moving where some marketers still fear to tread. Almost half the working women in a Washington Post survey rated the Web a "very important" medium for prepurchase research on health-care products.

2. Develop formats to promote interaction with audiences. The media and marketing tradition is one-way -- whether product or service, we package for you -- and hard to break. That's why mini-empires like Youtube and MySpace developed outside the boundaries of legacy media companies. But leaders are abandoning the myth of the passive audience.

3. Measure outcomes, not inputs. Media metrics still center around gross ratings points and other estimates of audience size. Marketers, however, are becoming much more sophisticated in assessing delivery against needs; session quality, degree of cross-platform activity, opt-in activity and direct-sales impact are among the calculations more and more marketers are seeking to determine.

4. Create branded-entertainment assets. Some major marketers have begun to disintermediate the media. Procter & Gamble's Homemadesimple.com has a registered user base that rivals the circulation of the women's service magazines it advertises in.

5. Insource new skills and capabilities to deliver greater sales impact. Just as marketers are taking on roles traditionally associated with media, we see media companies adopting more consultative capabilities, using their own proximity to and affinity for their audiences to directly help marketers develop and implement campaigns.

Can marketing-services companies still compete? Yes. As one CMO told us, "The media supplier or agency that knows us maybe even a bit better than we do and can deliver results -- that's the one we want to do business with."

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Randall Rothenberg, an author and longtime journalist, is director of intellectual capital at consultancy Booz Allen Hamilton.
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