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David Verklin Lays Out His Predictions

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NEW YORK ( -- "Don't ever say that things don't change in our industry," said David Verklin, CEO of Carat Americas, rattling off a list of facts to support his
David Verklin, CEO of Carat Americas, speaking in the Time-Warner auditorium last week.
point that the industry is undergoing a significant transformation.

Among the most startling: A group of 10 companies, the names of which were unknown five years ago, today control the global business of buying and selling advertising time and space. An in the past 36 months, almost 70 of the top 100 global advertising spenders have reviewed their media buying-and-planning account.

These changes matter, he said, because it directly affects how we communicate in an information age.

From the trenches
Mr. Verklin has experienced these transformations from the trenches; in the eight years since he joined Aegis Group's Carat in North America, the company has grown from $1 billion in billings to $5.3 billion. But that doesn't make him an expert on the American media business, he insisted. "Please accept my comments today as coming from the view of a student, not a teacher or consultant."

Despite his self-effacing characterization, Mr. Verklin, 49, is a respected prognosticator. Four years ago, speaking to a panel of industry executives at the Cable Advertising Conference, he predicted that the "30-second commercial as we currently know it will die in the future," to be replaced by less expensive ads in a variety of lengths -- from five minutes to half an hour. This past April, speaking at the Association of National Advertisers' Television Advertising Forum, Mr. Verklin challenged the industry to tackle the thorny issue of the "upfront," the term used to name the commercial buying process for network TV. Later that month, the ANA organized the Network Upfront Discussion Group to discuss changes.

During last week's industry event, Advertising Week in New York, Mr. Verklin returned to the podium to do more of the same, as a featured speaker in the Panasonic Ideas for Life Keynote Lecture Series, entertaining a rapt audience in the Time-Life Building for over an hour.

Here are his latest predictions concerning the continuing transformation of the media and media services in the next three or four years.

  1. Merger of direct and digital marketing. The two marketing services will be combined to create the digital-centric direct-marketing company. "Watch as all of the holding companies merge their direct and digital assets in a new kind of direct-marketing operation where the Web is the center of the universe."

  2. Experimentation with 100% audience composition technology. This technology allows marketers to "herd" consumers with similar purchasing interests into a new audience for marketers to address. An example of how this is already being done can be found in recent TV ad campaigns that drive interested viewers to a Web address. There, they become an audience almost totally composed of people interested in a certain product.

  3. Collision of commerce and cause. A soon-to-launch fund-raising initiative by St. Jude Children's Research Hospital exhibits a pioneering effort in which companies such as Target, American Express, Amazon and others will donate a percentage of sales to the organization. Media campaigns use a combination of paid and donated media.

  4. The Rise of experiential marketing. "You'll see exhibitions be built on the Mall in Washington, D.C.; dealer meetings, trade shows and conferences will evolve into and become brand experiences. Sport and event marketing will also come into a new level of importance and sophistication."

  5. Media planning becomes communications planning. "In traditional media planning, the creative work comes first, and the media buying comes second. With communications planning, that approach changes."

  6. Explosion of gaming media. Gaming is far bigger than imagined. "Did you pay attention to Spike TV's first Video Gaming Awards? In the next 36 months it will be the Oscars for the 11 year olds."

  7. Marketing analytics advances. "The next battleground is real-time analytics. In this vision, brand managers will have a system on their desktop listening to and monitoring all customers, sales and marketing activity ... watching what is and is not working, and making adjustments accordingly.
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