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Media Conference Recap: Thursday, March 6, 2008 

Nancy Hill, our new President and CEO, welcomed the audience to the AAAA 15th annual Media Conference and Tradeshow. She discussed the evolution and widespread adoption of technology and the impact it has on our lives and how we consume media.  However, it is the consumer who ultimately makes the choice and thereby drives the adoption or rejection of media technology.

Using the Farnsworth/Sarnoff (the technologist vs. the visionary) metaphor from "The Farnsworth Invention," Nancy compared the new technology to the marketing communications industry of today. Some in our industry can "imagine a future in our present," and can "harness this digital for the sake of moving society forward, for commerce and culture, and of course media and advertising." At the end of "The Farnsworth Invention," Sarnoff, head of NBC, allowed advertising on radio. He stated, "I had no idea it would be such a success at connecting consumers to advertisers. Once that happened, it changes everything."

Nancy concluded her presentation with, "Television changes everything, Internet changes everything, Digital changes everything. And who knows what else in the future will change everything. But this much we know for sure: everyone and everything changes digital."

Hill's speech set the tone for the rest of the day. Marc Goldstein, CEO of GroupM North America, continued with the theme of how modern technology is changing the way we do things in our every day lives. The consumer "has changed what they do and how they do it--control seems to be the operative word-and the role technology has played is enabling these actions."

However, this new digital arena poses challenges to the advertising business. Writers want to share in the revenues from downloading, VOD and other digital viewing platforms on an ongoing basis, the annual upfront negotiations using "forward buying" and C-3 ratings. The digitization process is resulting in numerous measurements of commercial performance as well as the issue of addressability. And even the measurement of click –through rates on the web permits more tracking of consumer's actions: the ability to profile, project and target ads based on what you have been doing and where you’ve been going. This raises the issue of privacy and we may already be living in the "era of 1984," with Big Brother looking over our shoulder.

The shift of broadcast signals from analog to digital by February 17, 2009 will have a tremendous impact on the local broadcast scene, creating proliferation of new signals and further media fragmentation and viewer confusion. And in the past six to twelve months we've seen the rise of social networks and UGC (user-generated content).   This phenomenon not only permits advertisers to reach a greater niche audience but also allows the consumers themselves to control what ad messages they choose to see via their friends' lists and widgets.

"Great content draws great audiences." Ann Sweeney, Disney Media Networks/Disney-ABC Television Group, stressed the importance of great content and how it is connecting consumers in new ways. Ann gave a slick presentation of the various content they create to reach every demographic via the Disney Channel, ABC, ABC Family, Soapnet, Lifetime, and ESPN. And with great content, advertisers can target more consumers with better targeted messages.

The Millennial Generation prefers texting, watching TV and messaging. Kids like to watch online videos repeatedly, and adults just want to catch missed TV programs. Consumers can now follow their favorite programs with content posted on the Internet, VOD, online communities, or the emerging mobile media. Each new digital platform has its own unique content and ad formats. Many advertisers are experimenting with embedded product placement or creating content like gaming to engage consumers to these new digital platforms. Ann Sweeney encouraged a growing partnership between content providers and advertisers to "put consumers first and create high quality content" together.

The "elephant" in the room is whether Google is getting into the advertising agency business. Tim Armstrong of Google assured the audience they are not a threat to the agencies. Rather, Google is investing heavily to build "tools" so consumers can get to the "cloud of new technologies," and offering a "dashboard of information and data" for advertising agencies, like systems that will accurately track the performance of each campaign by various metrics. Google is organizing its services around the agency business (local, national and international) and is putting a lot of resources into training and making its apps easier for agencies to use.

In "Navigating the Blur," David Kenny said that the media agencies need to become the navigators to help the consumer accomplish the "personal experience" he or she is seeking on the Internet with all of the countless choices in content and delivery systems. Effective navigation can be divided into: "Media Creative," "Media Distribution," and "Media Optimization." To help people have personal experiences and enable them to solve their problems, media agencies need to create engaging creative across numerous platforms, delivered in the channel of their choice.

Currently, as a rule, political campaigns spend about 1% of their budget on Internet advertising/marketing. In "The Impact of Media on Super Tuesday Results," the panelists talked about how the Internet allows a candidate to direct messages to micro targets, e.g., political districts, zip codes, etc. One problem arising from using the Internet is that high hit ratios drive up the cost of advertising, which can create a budget problem.  Mobile is the future and will increase in popularity as candidates learn how to use it effectively. One drawback is text messaging lacks emotion as compared to visual media like TV or the PC.

A recurring theme in the conference is reducing the complexity of the back office operation and reducing costs. In "How to take the Friction Out of Implementing Services in the New Digital World," some of the problems agencies have with the new digital media were identified:  change inventory management, the need for better metrics, insufficient ability to measure effectiveness, the perceived risk with consumer generated content, and the complexity and cost of creating an online campaign. The new platforms require electronic invoicing and an active bill (no lag time in bill payment). Hopefully, Microsoft/Google/Yahoo will partner with agencies to streamline these processes for the new digital platforms.

"The average person takes 11 minutes to find what they want via a Search Engine."  In "Why Search is Not Just About Algorithms," the major search engines are revolutionizing the search experience by using more behavioral targeting and using a consumer’s past searches in order to forecast and anticipate what they want.   To create a more personalized consumer experience, the search engines are giving the consumer more control by creating a "My Yahoo" page.  The endgame is "advertisers are no longer buying the property, but buying the right customer at the right time, in the right place, always being mindful of privacy issues."

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