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Media Conference Recap: Friday, March 7, 2008 

According to Alexia Quadrani, of Bear, Stearns & Company, the 2008 advertising outlook is "cautiously optimistic." Local ad spending is anemic, while the advertising holding companies are well diversified geographically and with the marketing services they offer.

Ad growth was robust in the past recessions: up 6% in 1973-75; up 10% in 1980 and up 10% in 1982. However, in 1991, there was a mild recession resulting in slightly negative ad spending, and in 2001, the decline in ad spending was more the "bubble bursting." In 2008, Bear Stearns expects a more modest growth in ad spending, rather than a negative year.

The US will expect a material economic slowdown in the beginning of 2008 and will improve in the latter half of the year. Increased spending and the quadrennial ad events (Olympics & Presidential elections) will provide a boost to the economy.

Local ad markets are driven by secular and cyclical pressures. Local businesses tend to cut budgets quickly in weaker economies. While national advertising historically lagged economic weakness, budgets are usually cut only during prolonged economic slowdowns.

Alexia also believes that Google is "more of a friend than a frenemy" to the agency business. There is little incentive for Google to "bite off the hand that feeds them." She also sees Google as a technology company and doesn't see them entering the creative side of the business.

"How Digital Media Affected the World of Entertainment" highlighted the following trends: the democratization of digital distribution and the removal of the gatekeepers, younger consumers are being empowered to make their own choices, and there will always be a need for content creators to reach various niche target audiences. Advertisers need to create compelling content that forges an emotional connection with consumers and they need to be accountable to the marketing objectives and metrics they set.

While brands are taking some risks in social communities (like the Dove commercial), they are being more cautious with messaging on cell phones. Consumers want to be entertained; they don't want to be interrupted, and they prefer to be "invited in" to the experience. Couponing works well on cell phones.

So, what does the agency business look like 10 years from now? Jim Cooper, Mediaweek, moderated a great panel discussion with the title, "It's 10 Years Later:  Have Agencies Survived Digital Convergence?" The viewpoints were varied, but several themes became apparent. Agencies must invest heavily in technology, grow their analytics departments, and the biggest challenge is talent management. Agencies must create exciting work environments in order to attract and retain young talent that will help to grow the business. The best ideas usually come from those under 30.

The other key challenge for agencies is to create relevant content that won't put off the consumer. Advertisers must manage the consumer touch points with ever changing and morphing messages as consumer behavior changes. Social networks may become over-commercialized and may eventually turn consumers off.

Mobile advertising will also change dramatically. One must be cautious, however, not to "tamper with the integrity of that space, or you may damage your brand image." 60% of consumers believe cell phones are an entertainment device.

And finally, "Communications Planning" is the real skill agencies can bring to their clients. The "Communications Planner" (different from the media planner) will be a generalist and more of a collaborator within the agency, the architect of the consumer experience, combining the creative strategy with the media strategy.

And the end to another successful Media Conference!

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