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Ad agencies are trying to find traction in new media

In Christopher Locke's ode to branding, "Gonzo Marketing: Winning Through Worst Practices," (2001) he states that "markets are changing faster than marketing."

He was understating the case a bit.

For every new media branding campaign these days, there are three new products coming out on six different formats. To be able to push not just advertising, but effective advertising onto these new media could end up being the best trick since Mark Cuban - the Dallas Mavericks' madcap owner - convinced Yahoo! to buy his online streaming service Broadcast.com for an astronomical $5 billion in July 1999.

That being said, new media advertising executives still have to convince clients to advertise in these new formats. And the big four of advertising - Publicis Groupe, based in Paris, the New York-based Omnicom Group, London's WPP Group and the Interpublic Group - all have formed new media groups searching out the right vehicle for their client's message. While saturation remains low - there are no reliable market research numbers available yet - inroads are being made, say executives.

They add a large number of these media will remain and go mainstream. "The bottom line is that the Internet, music sites and MP3 files are here to stay," says Alan Schulman, global executive director of media and entertainment at FutureBrand, part of the Interpublic Group.


Video-on-demand, it seems, is becoming the next big thing, says Schulman, who launches creative brand-building initatives for such broadcast and cable networks as Disney, AOL Time Warner and VIACOM. "We see VOD as the next big opportunity for television advertisers because cable providers can see the incremental revenue stream," says Schulman. Schulman points to a lively ad for the spring 2002 movie, The Scorpion King, in which advertising for other movies was superimposed onto a VOD ad.


Inside Interpublic's vast network of ad agencies also resides Universal McCann's Futures group and its senior vice president of media futures, Mitch Oscar. He believes that electronic program guides (EPGs) are a killer application. Currently in 8 to 12 million homes through market leader TV Guide Interactive (part of Gemstar), it's a way to put ads on the first thing customers see when they try and search their local TV cable guides. "It is not about critical mass, it's about learning about a category," says Oscar. "What kind of things can we learn that will let our clients make money? That's what we are trying to find out for them every day."

Another promising cable television initiative is called addressibility, where companies such as ACTV can place a different commercial in a different home, thereby customizing the ad process. "That way you can see if a commercial has a value, and how one can measure it," relates Oscar.

An additional form of interactive advertising that has been gaining ground is enhanced television, which engages customers into clicking onto a coupon or emblem that is transparently overlaid onto a particular commercial. The leading player in this field is Wink Communications, a four-year-old firm that specializes in the gradually developing technology of interactive television. Just two months ago Wink integrated its solution with EPG leader TV Guide Interactive, according to Melinda White, executive vice president of national accounts at Wink Communications. "This combined product solution is ideal for leading-edge cable operators like Charter Communications who want to deploy high-performance digital set-tops."


Advertising on wireless networks, including Palm devices, may be a little further away from mainstreaming, but Schulman says the scope could again be large because of how far the U.S. is behind the curve, even in 2002. In Thailand, for example, wireless customers can get coupons over the phone, while we in the U.S. are not even close to that. Of course, the buying power of the average U.S. consumer is dozens of times greater than with your average wireless in Bangkok.


Another issue slowing down this process is that clients aren't putting as much money into research and development due to the economic slowdown over the past year-and-a-half, says Oscar. The idea then is to keep the business model inexpensive, get in slowly and learn, he says, "because you don't want to turn consumers and clients off."

Bottom line? Cable and wireless-related technologies remind one of the broadband technology gluts that occurred in the late 1990s. While broadband is now in 11 million U.S. homes, it's still not mainstream - and that's three years after it was supposed to be. New media advertising, therefore, will have to wait for the standard glut in cable and wireless to evaporate. And that's going to take longer than current expectations.


Eric Moskowitz, Multichannel News International. June 2002

Copyright © 2002 Reed Business Information. All rights reserved.