Media execs skeptical about Ballmer’s forecast

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While media executives agree that digital will become increasingly important as a delivery vehicle, they are skeptical about Microsoft Corp. CEO Steve Ballmer's recent forecast that in 10 years all media will be digital.

In a keynote presentation kicking off the Association of National Advertisers' annual conference in Phoenix last month, Ballmer made a bold prediction.

"Within 10 years, the consumption of anything we think of as media today—whether it is print, TV or the Internet—will in fact be delivered over IP [Internet protocol] and will all be digital," Ballmer said. "Everything will be delivered digitally."

"Everything you read, you'll read on a screen," Ballmer said. Holding up a sheet of paper, he asked, "What if we could give you a screen this light?"

Media executives contacted for this report said that even with such technological advances in digital delivery, there will still be an important role for print.

Matthew Yorke, senior VP-corporate sales and marketing at IDG, said print offers readers and advertisers distinct benefits that all-digital delivery can't provide, which is why it will continue to be an important part of the media mix.

"Our readers tell us that print offers them accidental discovery, which means you don't know about something until you read it," Yorke said.

"With online, the intent is usually very specific. The reader is looking for specific information. It is hard to see how you'll take a print property, which is a very individual user experience, into a completely online world."

At IDG, online accounted for 33% of total media revenue in fiscal year 2007 (ended Sept. 30) and will make up about 40% in the current fiscal year. IDG has said that by 2010 online will make up half of its total media revenue.

Neal Vitale, president-CEO of 1105 Media, was also skeptical about an all-digital media future.

"Looking to the future, I believe in the synergy of multiple media behind a brand. That is what integrated media is all about," Vitale said. "One of the best vehicles for launching a brand is print. Having a print component is an essential piece of every brand-building effort that gets done [at 1105 Media]."

Vitale added that online will become an increasingly important part of the overall mix in the future. Currently, about half of 1105 Media's revenue comes from print, about 30% from online and 20% from events.

"We're trying to make events a bigger piece of it, and we expect online to be a greater piece of it," Vitale said.

Gordon Hughes, president-CEO of American Business Media, also challenged the notion that media will be all digital.

"I can tell you for sure that there will be magazines—there will be b-to-b and consumer magazines," Hughes said. "Having said that, the Internet or digital world will have surpassed our books in billings and readership.

"There will also be a host of new products with new delivery tools. You and I will be doing a lot with handheld tools and wireless devices, but we will still be flipping through magazines."

In his presentation, Ballmer said that the move toward digital delivery of media will dramatically change the ways in which marketers, agencies and media companies deliver information to consumers and customers.

"We will have rich databases of information to deliver the right message to the right person at the right time in any communication," Ballmer said.

Not surprisingly, Microsoft is in a position to deliver many of these messages through its online advertising business, which has grown through recent acquisitions, including online advertising agency aQuantive and adECN, an online advertising exchange.

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