Google Adweek 2010 - Future of Media Forum


Uploaded by FastForward on 29.09.2010

Transcript:

JOE: Thank you, Ken.
Thank you all for being here.
Just a real quick few remarks, just to give you
some context for this.
If you haven't been here before, this is I think our
third or fourth year of doing this particular forum.
And it started about three or four years ago when we started
bringing in some guest editors to edit Media Magazine because
we're just journalists.
We're not practitioners.
And we thought it would be fun to tap some of the intellect
and mind sets in the industry to tell us where
the future is going.
And it started with Bob Guccione Jr, who was a
professional editor at the time, he kind
of gave us a vision.
And every year since, we've brought in a new guest editor.
We had Alex Bogusky last year.
This year, we have David [? Scoffner ?] from Huge.
If you don't know about them, you should read this issue.
And the important thing is that they all bring a vision
of where the industry's going.
And when we put this particular forum together, we
tried to bring an eclectic mix of personalities from digital
media, traditional media, but also, really importantly, from
Madison Avenue.
Because the one thing that the marketing industry and
agencies bring is a real perspective on consumers.
Remember, there are really only three ways that media
content gets funded.
I pay, you pay, or someone else pays.
So either consumers paying directly with premium
subscriptions, or some kind of commerce is taking place.
And in the old model, it was advertising.
And a new model, we're still trying to work through it.
So we're going to have some very influential folks here
explaining how they see those models progressing.
One thing I do want to say is, we do cover the future of
media every day, almost every second, at Media Post, but
we're looking very near term.
We're looking at the trees.
So it's really fun to step back and look at the broad
perspective of where we're going, not the long, long
distant future, but things that are going to change in
the next 18 months that are going to
transform our media economy.
So the group we brought together is very eclectic.
I'll go through them really quickly.
Really importantly, we have people from Madison Avenue who
understand where the consumer purchasing perspective is
going, because that's still an
important part of the equation.
So we have Trevor Kaufman, who's CEO of Schematic,
leading design agency and interactive agency owned by
WPP Group doing very futuristic things with how
people engage with media.
Laura Lang, the CEO of Digatas, the flagship digital
enterprise within Publicis Group, really far, far future
thinkers in terms of how consumers are engaging with
digital media and traditional media.
John Ross, who's president of the Interpublic
Emerging Media Lab.
Actually, he's now president of Shopper Science, which is a
new division of Interpublic that's really focused on
understanding when the consumer gets into the store
and starts grabbing those things off the shelf, what led
to that decision, and what influences happened that kind
of made them want to grab that product versus another?
Something important to consider.
We have Paul Rossi, who's Managing Director and
Executive Vice President of the Economist Group, a leading
content publisher.
Hilary Schneider, who's Executive Vice President
America's region for Yahoo, a leading digital
publisher and portal.
Evan Williams, co-founder and CEO of Twitter.
I don't think I need to explain that, but I don't have
140 characters worth saying.
Fred Wilson, co-founder of Union Square Ventures, one of
the leading VCs in Silicon Valley, and you see all the
activity going on this week, I hope he talks a little bit
about that.
I'm kind of curious.
We have Michael Wolff, founder of Newser, columnist for
Vanity Fair, one of the great antagonists in our industry
who really kind of pushes the discussion.
I'm glad he's on the panel today.
And Lauren Zalaznick, who's the President of NBC
Universal's Women and Lifestyle Entertainment Group.
So with that context and background, I'd like to
introduce Andrew Heyward, who is one of the preeminent
advisers of media companies big and small, right now
helping them steer the way through this.
Of course, he's the former president of CBS News, and a
great moderator.
So I'd really like to introduce Andrew.
They're all going to come out now.
Thank you.

ANDREW HEYWARD: Hi, everybody.
We'll let everybody get set up.
You hear me OK?
Let everybody sit down.
Welcome.
Joe made easy by introducing everybody.
So for those of you keeping score at home, we're in
alphabetical order here.
So we have Trevor, Laura, John, Paul, Hillary, Evan,
Fred, Michael, and Lauren.
And it's a large panel for a large topic, the future of
media, so what we thought we would do is have
a very simple format.
Everybody will do 10 minutes of opening remarks, I'll do
closing remarks, and then we'll stop
for your coffee break.
No, that's not what we're going to do.
I asked everybody to just think about opening remarks,
somewhere between 140 characters and two minutes.
And I gave them a choice of six things, and they can take
any combination of them to talk about.
One would be a trend that presents a great opportunity
to their current business model, or the reverse, a trend
that represents a great threat.
Another would be a company that is very hot now that is
going to be yesterday's news in two years, or the reverse,
a company that we haven't even heard about now that's going
to be, let's say, the Twitter of tomorrow.
And my favorite is a cliche or piece of conventional wisdom,
something like, content is king, that a lot of people
subscribe to now, that's going to no longer be applicable in
a couple of yours.
Or the reverse of that, something that will be
conventional wisdom in a couple of years that we're not
even thinking about now.
So with that in mind, what we're going to do is go right
down the row.
We're going to hear from our panelists.
And after that, we hope to have a lively, interactive,
fast-paced discussion.
And with about 20 to 30 minutes to go, we're going to
bring you into it.
So please think about your questions as we go along.
We want to include the group in our discussion of the
future of media.
So Trevor, let's start with you.
TREVOR KAUFMAN: OK, does this work?
How do I do this?
ANDREW HEYWARD: Yes, pull it a little bit towards you.
TREVOR KAUFMAN: These threats to my business model.
I've never had my last name be the first in the alphabet
starting with K. This is a twist for me.
ANDREW HEYWARD: By the way, the only reason I'm the
moderator is I'm the first in the alphabet here.
Paul Allen couldn't do it.
TREVOR KAUFMAN: I don't know really what category what I
think about a lot falls in.
In I think 1994, Nicholas Negroponte said, everything
that can be digital will be.
And that seems so obvious to us now, but what's never
obvious is when that's really going to happen.
As we've seen one medium after another become more digital--
book retailing becomes digital, and then the books
themselves become digital--
TV really strikes me as the medium that has not yet really
gotten there in terms of digital distribution, even
though it is there in terms of digital production.
And when I think about conventional wisdom, I think
about everybody pooh-poohing interactive television and on
demand television.
Right now, the TV market and the cable companies are
actually doing very well.
But when I see Comcast now, to me--
and a lot of cable companies are our clients at Schematic--
I see a business model so much like the way AOL was, where
you're paying one company who manages the content, the
advertising, the access, et cetera.
And I think that at some point when we least expect it,
that's going to become disaggregated, whether it's
through an Apple TV, or a Google TV, or some kind of
in-device chip.
So I don't know exactly what question that's answering, but
that's the thing I think is most ripe to occur.

LAURA LANG: Well, in the spirit of what I think about a
lot, the answer is consumer behavior, because I believe
consumer behavior is way out ahead of the way the media and
marketers are acting and where they're
spending their money today.
I think it's a dislocation that is going
to have to be changed.
And I believe that we, as a marketing and media community,
are completely underestimating the role that mobile and
social are going to play.
The one thing that never changes, no matter what
happens, is the way people feel about
the need to be social.
It's like the air we breathe.
It's a connection that has to happen.
What changes is the technology underneath it.
And the technology that is coming in terms
of our mobile devices--
everything from those things we hold our hands that today
we call phones, all the way to the next generation of iPad
and tablet devices--
are going to change the way that we engage and interact
with entertainment, news, content.
So what will be profoundly different for all of us,
sooner than I think we even understand, is that we will no
longer talk about social as a channel, we will no longer
talk about mobile as this thing we
should think about later.
Mobile and social are inextricably intertwined, and
it's going to be the way that we engage, that we
communicate, and it will redefine the nature of
engagement with consumers.

JOHN ROSS: So I run something called Shopper Sciences for
Interpublic, and the Emerging Media Lab, which is a think
tank, a research center, it's actually a
physical working lab.
It's about the size of a regular suburban home filled
with the latest kinds of technologies you can imagine,
everything from 3D to mobile to advanced technology we
can't show you because it's hidden in a secret room, and
everything in between.
So of course, representing that, the topic I want to
address today is coupons.

The world's largest marketers come to the lab, and they come
and stand in the midst of all this technology, and they want
to have access to the data that we have. We do thousands
and thousands of shopper interviews every week.
And we say, what keeps you up at night?
What are you worried about?
What are you trying to do?
And the number one answer is, can't I just dis-intermediate
that mean retailer and get straight down to the consumer?
How do I do a digital coupon?
How can I get a coupon on a phone?
And we say, well, really?
Is that it?
I mean, we're talking about one of the world's most
sophisticated devices.
This is incredibly powerful technology that literally is
on my body, literally physically can go inside my
body in a way that other technologies can't, and all
you want to do is do $0.30 off?
And then the retailers come to us, or the auto dealer
associations, or the pharmacies, or whatever, and
they come and they do the same tour and they go through the
same kind of data.
And we say, what are you trying to do?
And we get a list of what they're trying to do.
Often marketers, what's written at the top of the
[INAUDIBLE] is what I'm trying to accomplish,
what I want to do.
I want to manipulate this consumer to
behave the way I want.
Laura asked me before we walked up, what's one of the
things that surprised me in my full 14 months with the lab.
And I tell you, one of the biggest aha's has been how
humble I feel in the face of the shopper themselves.
It's an incredibly powerful consumer, who knows more about
the products and services than the associate in the store or
the gentleman at the auto dealership, or in some cases,
the pharmacist. Their need to understand and feel empowered,
and whether they did that with search before they showed up,
in the midst of the transaction, or whether they
bring a device along that allows them to do it in the
moment, this voracious demand for information in the absence
of the brands and the retailers delivering that
information to them, they're seeking out each other
increasingly.
Do a lot conversation about the growth of technology.
Technologies, in fact, social media, for example--
I think while the technology's been the facilitator, the real
issue there is, in the absence of serving those shoppers'
needs, they're going to each other.
The number one topic for moms talking to each other isn't
how to get your kid to go to bed at night, or how to deal
with a smart mouth teenager, or any of the kind of things
you would think parents would want to talk about.
70% of the conversation is about products and
acquisition, how to spend your money efficiently.
Being humbled in the face of this changing technology, we
could so easily go out and embrace in terms of what we're
trying to accomplish, and yet we live in
this incredible world.
The trend I see is a flip around for marketing, for push
marketing, to this kind of listening marketing, letting
the shoppers educate us, and flipping around.
And in a world where it may be incredibly easy, in fact, to
be successful, harnessing that in order to help us make those
shoppers feel smarter.
ANDREW HEYWARD: Paul?

PAUL ROSSI: So I come at this as a media owner, in terms of
having a magazine and a website, and the two things
that I look at, which are both, I think, long term and
short term, whether you think of mobile as devices, but
principally mobile and devices bundled up together.
And if I look at the data, what you're seeing at the
moment for the first time is the substitution of people
giving up one form of reading, The Economist as an example,
or magazines in general, and reading it on another product
via digital.
So there was a piece of research done recently amongst
business travelers by Business Traveler Magazine, and they
asked them simply, do you have an iPad?
And this is in the UK, where it's a
little bit later adoption.
Do you have an iPad?
Are you thinking of buying one?
So 16% said I have one, and 13% said, I'm thinking of
buying one.
So that's 30% are already owning these devices.
You see it with Kindle.
I think the Kindle pricing will come down again, before
the holidays, potentially.
And that will suddenly become the gift that every dad gets
on Father's Day, because you don't know what to buy him, or
every Uncle George gets on his birthday because you don't
know what to buy him.
So I think you have to accept that these
devices are taking off.
So the change in behavior of consumers in terms of reading
magazines is a definite issue for us.
And the other thing I think is, you look at mobile and we
see it in the US.
But I'll just give you a couple of interesting numbers.
If you look at BRIC, Brazil, India, China, Russia, if you
add Indonesia on there, which becomes BRICKI, which isn't
very exciting, but just imagine that gets added on the
end there--
there are over three billion people there in those
communities, of which today only 450 million are online
with a PC, but there's 1.2 million cellphones.
And India takes off, 3G takes off in India this year.
So I think you're going to see this incredible explosion of
online media consumption in various forms. And I think it
is text, not just web, But I think certainly for us as a
global media company, the geography of the world is very
much changing.
And you're seeing mobile devices as being a leapfrog
for people to consume media in a different way.
So those are the two things.

HILARY SCHNEIDER: Well, in thinking about it in honor of
Ad Week, I think the adage that I would get to is the
traditional adage of marketers, which is, I know
that only 50% of my marketing works, but I
don't know which 50%.
And I think that was kind of a funny thing people
said 20 years ago.
I think today, marketers don't find that amusing.
And I think that a year or two from now, it will absolutely
not be true.
I think you're already starting to see that today.
And I think as you think about that ability for marketers to
really understand how they can reach their target audience,
it will have huge impacts in terms of how media and media
consumption happens and gets funded.

EVAN WILLIAMS: So in terms of trends, I would pile onto what
Laura said about mobile specifically.
It's an easy one.
Everyone knows that mobile is the future of everything.
But I think the implications aren't fully appreciated, and
we don't know what all those implications are.
But a couple that come to mind for us, and mobile is, to
answer your question, what's exciting for our business.
Twitter started on mobile.
It's all about conciseness and immediacy, so that's one of
the reasons we're excited about it.
But I also think it's going to lead to a lot more media
consumption, even more than we're seeing now.
The iPad and other devices are interesting, but I think
they'll be dwarfed by smartphones, which are still
growing like crazy.
It's not the iPhone that's going to take over the world,
but Android phones are going to be selling for $50, and
everybody's going to have those, which is going to drive
tons and tons of online web usage.
But the web is not really prepared for mobile, either
from a user experience standpoint, or monetization
standpoint.
So there's going to be lots of changes, and what people
consume over mobile will not be the same as they
consume on the web.
B, the advertising models on mobile, I think there's
actually an opportunity to do a lot better
for a bunch of reasons.
One is people will be more likely to be logged in on a
mobile device, and you'll know more about
them, such as location.
But I think what it's going to force is advertising models
that are actually helpful and respectful to users, so
advertising is designed with the same consciousness of
product and content design, and that's what will make it
work, because people don't have the patience
for anything else.
FRED WILSON: Well, I'm thinking about all the same
things that everybody else is thinking about up here.
ANDREW HEYWARD: That's the problem with having W. It's
hard for you, Michael, let alone Lauren, with Z.
FRED WILSON: Exactly.
Lauren's not going to be happy.
So one thing that I think a lot about as relates to media
is the way that media is infiltrating every business.
And what I mean by that, I'm going to use
myself as an example.
I'm an investor.
The way I make money is that I invest in companies like
Twitter, they become successful, our stock
appreciates, and that's how we make money.
And what I've been doing as an investor for almost the past
decade is using technology that Ev invented, blogging,
and pretending that I'm Michael.
And I write a column every single day at abc.com, and
about 150,000 people a month come to abc.com and read that.
These are people who I may want to invest in.
It makes it easier for me to invest in them.
But that's my issue, that relates to my business.
But as it relates to media, this is also
media that I'm creating.
It may be bad media, it may be good media, it may be mediocre
media, but the reality is that as more and more people who
have businesses that aren't traditionally seen as media
use media to do their business, we have an
explosion of media.
And I think a lot of media is getting created today that
never existed before that is actually very good, and it
doesn't need to have a business model, at least it
doesn't have a traditional business model, and I think
that's new, and different, and important.
ANDREW HEYWARD: Fred, just explain that for another 30
seconds, when you say it doesn't need to have a
traditional business model?
FRED WILSON: Well, I don't need to run advertising on it.
I don't need to do any of the things that a traditional
publisher would need to do.
I don't need to monetize it.
I produce it myself, and--
ANDREW HEYWARD: And it serves another function.
FRED WILSON: It serves another function for me, but it is
media, and I think there are thousands, maybe tens of
thousands, maybe even hundreds of thousands of people who are
doing this now, and there's a lot of really great media
that's getting created.
And it's being surfaced up in places like Twitter, and
Facebook, and Google Reader, and other aggregators that
increasingly are going to filter that down.
And I think it's very challenging for traditional
media companies to compete with that.
I think that places like finance, and technology, and
maybe a few other areas, are where we're seeing that
happening the most right now, but I don't think any sector
is going to be spared from this.

MICHAEL WOLFF: I think one of the things that's consistently
most interesting to me is our collective inability to grasp
the kind of change that we're experiencing.

We sit in this building, which is mostly occupied by a
company that can't fathom the fact that it probably won't be
here in the form that it's in within a relatively short
time, and most of us here can't fathom that fact.
ANDREW HEYWARD: Should be OK until the end of the
panel, by the way.
Don't worry about that.
MICHAEL WOLFF: --that these institutions which we've grown
up with and have dominated our business no longer will
dominate our business.
That's simple but transformative.
We're in the midst of something nothing less than
industrial transformation in which everything will change,
not only everything will change, but all the faces will
change, and that's a key point.
The people in charge now will not be in charge.

But it's not only a shift in who's in control.
It's a shift in where that power flows from.
So the most elemental thing that's happened over the last
decade, or last 12 years, is the fact that power has passed
to the consumer.
It's the greatest time in the world for a consumer of media.
It happens to be the worst time in the world for the
providers, the producers, and distributors of media.

We are in this moment in which we've seen a sort of coming
apart of the historic partnership between
marketing and media.
And that's not so much the detriment of marketers, which
are finding enormous other ways to find an audience,
although obviously they have their issues and their
problems too, but it's devastating
to the media business.

One of the interesting things, I think, that's happening now
is the war for control of video.
It would be impossible to say who's going to be running the
video business, who's going to be getting the biggest piece
of the video dollar, who's going to be bringing that
video into your home or into your laptop.
Actually it would be impossible to say on what
screen that video is going to come.
But he who controls the video--

used to be Dick Tracy, and when I was a kid, it said, he
who controls gravity controls the universe.
He who controls video controls the universe.
But then it's not only the traditional media business
which is in a state of radical transformation.
The new media business is also in a state of radical
transformation.
So the idea which would have been prevalent probably a year
ago, that Google was unassailable is not an idea
that anyone would subscribe to anymore.
We have certainly seen the new media business in a moment
where all of these fiefdoms, or dukedoms, or new imperial
states are rising, from Facebook, to Apple, to
Netflix, to Twitter, to a company that I was actually
just at a dinner the other night, this company Spotify,
which will shortly come to the US and be potentially an
iTunes killer.

Anyway, it's the most extraordinary and exciting
period that I could ever imagine, and I'm grateful to
be able to make $1 off of telling everybody that they're
going be out of a job.
ANDREW HEYWARD: Lauren?
LAUREN ZALAZNICK: You know, instead of death by 1,000
paper cuts, this is like a firing squad by nine people,
smarty pants.
So first of all, traditional news guy, traditional media
gal have these analog retardo microphones, and cool kids
have their [INAUDIBLE].
So I think that's a statement, not that alphabetical order.
The nine bullets out of the assassination team.
I will let Comcast know that their business model is faulty
as soon as I get the legal chance to do so.
I'm glad you're going to make all my content for me, and I'm
glad I won't ever get any money for it again and have
the wrong feeling about who controls video.
That aside, I would say two things.
I think the thing about trends, I'm also a
longstanding teacher's pet, so I'm going to answer the
teacher's favorite question.
The phrases of today and the language that drives these
kinds of discussion, I'm going to go to a really resilient
one that people insist on saying now that's really not
relevant today, that will be even less relevant, which is,
when's it on?
And another one that kind of plagues these kinds of panels,
and I hope we don't get diverted by the question
today, how do you define your company, as a media company or
a content company?
As a media company or a technology company?
Not so relevant.
It seems like a new question, it never was.
So I think both of those--
old school question, new school question--
not too relevant today, much less relevant later.
And most of all, I think that the conversation is so
exciting about trying to predict the future.
It's such an unusual time for so many people at so many
different levels to be trying to get out in front of what's
happening to them today.
And I kind of have this fundamental belief that if you
can just look back maybe 100 years ago, when most people
took trains or horses somewhere, and some people had
these clunky things with four wheels and a
crank on the front.
And people who made all of that had to decide in advance,
am I in the horse and carriage business?
Am I in the train business?
Or am I in the business of getting people to the place
they want to go, when they want to go--
not on my train schedule--
easier--
don't have to feed the horse--
and faster--
car goes faster than horse, not as fast as train, but on
my schedule.
So I've got to decide, I've got to convince my current
owners and my new soon-to-be owners, what kind of business
are they in?
Are they in the square box on a console business?
Are they in the storytelling business?
Are they in the most expedient delivery of exciting and
dynamic and compelling content business?
And that's the story of the future.
And my last thing is, I'm going to offer you up a
drinking game, just for this morning, water, coffee, or
booze if you have it.
Anyone who begins their answer with the
word so, take a drink.
I'm not in that digital club yet, and there's a clear line
of who's cool and who's not.
I'm not yet cool.
Anyone who starts their sentence.
You would have four shots down the hatch if you did that game
by this answer.
MICHAEL WOLFF: Can I make a point here, because I think
that's an interesting metaphor.
In terms of industrial transformation, which business
are you in?
And what we know largely from the history of industrial
transformation is that you can't make that decision, is
that the business you are in is the business that you are
fated to, and somebody else--
because they have different skill sets and different
temperaments--
gets to be the guy who runs the auto business instead of
the buggy business.
TREVOR KAUFMAN: But don't we make a little
too much out of fate?
I think we're always saying, things are changing, there's
this crazy change, we're underestimating
the degree of change.
And all of that is true, but the web was around for 10
years before Evan and [INAUDIBLE] started Twitter,
before there was a Facebook, or before--
I think there's a lot of--
Amazon is a e-commerce platform.
Is it the perfect e-commerce platform?
Is it exactly the right one that has now created the
paradigm for every other e-commerce site, or was there
some degree of authorship that made that change?
I think one of the things that is exciting is we're not
purely fated to--
while the consumer is tremendously powerful, they
also still are in the position of getting, even if it starts
in a garage, they're the recipients of what's invented.
So there still is a certain amount of--
it's not a predestined, predetermined
world that we're in.
ANDREW HEYWARD: So to the degree that leadership is
going to be influential-- certainly the people on the
stage are going to play a role in that--
there does seem to be a tension between traditional
models, which are still remarkably resilient, and
these emerging models for content distribution and
marketing that we've been talking about.
We're just past the beginning of the television season.
It strikes me that those tropes really haven't
changed very much.
The same kind of programming, same kind of promotion, same
kind of adoption by marketers.
There's still the need for scale, for common culture, for
products we've been consuming for a long time.
So listening to this set of opening remarks, I think well,
all of that, forget about it.
But in fact, managing the tension between what works now
and has worked and what's going to emerge strikes me as
an important role for these leaders.
What would you say--
Laura, starting with you, do you feel marketers have moved
quickly enough to this new world?
Are they leading or following?
LAUREN ZALAZNICK: I won't to use the word, so.
ANDREW HEYWARD: We all weren't going to until you said it.
Now we're terribly self conscious.
LAURA LANG: I wasn't going to, but now I want to.
TREVOR KAUFMAN: I'm going to say so, just so that the
people can drink.
LAURA LANG: I agree.
They missed four shots.
What is happening now that I believe we're missing is that
I think we now need a return to really good marketing.
In the early days of marketing, it was about, what
does a consumer want?
What is a consumer doing?
How do we best fill that need?
Today, we get so excited about a new piece of technology or
some new behaviors.
Really this should be the most exciting time for marketing,
because what needs to happen is to go back to, where is a
customer or a consumer on their journey?
What is a mom doing all day?
What is someone who is leading in the B2B space whose job it
is to actually get new leads or new
customers for a company?
Where are they?
What do they need?
What content do they want to consume, whether it's for fun
or for entertainment.
And we make a lot about this tension, when really what
should happen is we should go back and say, there are great
roles for broadcast media in sharing a mass message, in
building brands, in tapping into culture.
But there are also incredibly important new ways for us to
get inside that journey and understand where someone is as
they walk down the street.
A phone, a smartphone, is an extension of your body.
This is with you all the time.
It's a part of where you are, it's a part of how you
communicate, it's part of how you consume.
We need to rewrite the customer journeys and say,
where are people, and how do we create experiences as
marketers that will grab them where they are?
It's not one thing.
It's not that simple.
MICHAEL WOLFF: Yeah, but aren't
you essentially saying--
I mean that's the old way of looking at this.
There's the customer, the consumer there, and the
marketer just has to find a way to give the message.
LAURA LANG: Oh, absolutely not.
MICHAEL WOLFF: --without acknowledging the fact that
one of the messages that has been sent is that the consumer
doesn't really want your messages, and the consumer is
more skilled at avoiding your messages than ever before, and
is in a state of not just rebellion but greater
savviness than you.
LAURA LANG: The mistake is thinking
marketing is messages.
Marketing no longer equals messages at all.
Marketing is about inspiring people to engage in whatever
way it works for them.
[INTERPOSING VOICES]
MICHAEL WOLFF: That's what we in my business would call a
message, by the way.
ANDREW HEYWARD: Lauren, and then [INAUDIBLE].
LAUREN ZALAZNICK: I would say that the whole medium of
communication through content going in front of consumers is
relatively new.
Films are about 100 years old.
Very new, at most, 80 years old, 90 years old.
TV is really new.
It's not like we're busting down Euripides, and plays
aren't going to work anymore.
It's brand new.
So advertising's even newer, and I would argue that the
onset of digital, the rise of Web 1.0, set advertising back
and set the markets back to the beginning, because
idiotically, we insisted, the digital world insisted, the
market that got created, went back to the basest form of
advertising, direct marketing, as its paradigm.
So a long time ago, people valued 1-800-MATTRESS because
it's late at night.
That's what you run in late night.
It's cheap, it's easy, people are in bed, they're like, oh,
my mattress is uncomfortable.
I'm going to call right now, and I don't have the money,
it's $5 down, and I get a paring knife with it.
OK.
That's ridiculous, but that was the metric of success for
a banner ad, click-through rates.
I feel like I'm searching sleep problems. If I don't
feel like buying a new mattress right now, that ad
didn't work and I'm not going to pay you for it, and that's
direct marketing, long time worst advertising on TV. That
was the paradigm of digital.
So we set back the thing called, you can put bad names
on it, you can put good names on it, it's the same words,
branding, brand loyalty, marketing, not advertising--
but we are all talking about people loving products.
And new people are going to love new products, some people
are going to be loyal to old products, and that was a
relationship, a long time relationship.
Coke, Pepsi, with your thing that you remember, when you
were eight years at your ball game with your dad, or with
your first boyfriend, took a sip, had your first kiss,
whatever their thing was to evoke, that was a
relationship.
So I would argue that the rise of digital set us back in
terms of what the market that was created, at the price it
was created, for the basest and least effective form of
advertising, and now we have to rebuild this relationship.
And it's not going to happen overnight because the
iterations of it are argued about, and a market is created
every year in the upfront.
Digital has still not entered the upfront market, so no one
will bet on future, right?
It's all about futures.
It's all scattered, it's all in the quarter-- forget about
in the quarter, for the quarter--
in the week, for the week, in a granular, low-end form of
engagement with consumers.
And I think we've got to get way beyond that.
ANDREW HEYWARD: Hilary?
[INTERPOSING VOICES]
ANDREW HEYWARD: One second, John.
Sorry.
Hilary, go ahead.
HILARY SCHNEIDER: I would respectfully disagree.
I would say that the whole internet is
15 or 16 years old.
That's phenomenal, it's absolutely phenomenal.
And the rate at which marketers are embracing this
is really a lean forward attitude.
And the analogy I would draw is that marketers have
historical tradition of really creating the programming
that's going to matter most. If you think about Procter and
Gamble, Procter and Gamble created the soap opera,
because when TV came about, they didn't have the medium to
really have context that they wanted their message in that
would make that emotional connection.
And if you look at what the top brands are doing right
now, and Laura can talk to this, and I'm sure many others
could, is they're really trying to understand the idea
that they don't have to reach all the consumers, they can
reach their consumers.
And they know a boatload about their consumers, and so they
can begin to think about, how do they create the content
that is the context that they want to
put their brand against?
LAUREN ZALAZNICK: I totally agree.
To me, that's a different issue.
I think it's about life stage, about finding the right people
to be advocates for your brand, and your product, and
your content.
HILARY SCHNEIDER: And they're creating that program.
LAUREN ZALAZNICK: I agree.
I'm just about deployment and what the expectation is, and
the value placed on it in the market called advertising.
It's advertising week, it's not content week.
MICHAEL WOLFF: I mean, the fundamental point that you
just made here, that this is a medium that's 15 or 16 years
old, and I guess your point was that it's grown so fast,
but that's not true.
That in fact, consumers it's grown.
Consumers have used this medium, but marketers have
been very wary of it.
I mean, marketers rushed into television at
a much faster rate.

I mean, let's get to the nut graph here, which is that
we've built a medium which is fundamentally supported by
marketing but that's not such a good marketing medium.
It doesn't really work, or doesn't work as well as other
mediums have worked, or we haven't found the key to
unlock what makes it work, and we're all sitting here, both
marketers and media people, kind of stymied.
We don't know how to really make a big buck here.
FRED WILSON: That's because we haven't tried, right?
We're using old fashioned monetization
models in a new medium.
When LeBron James writes a tweet that he liked the new
Universal Studios movie, and Universal Studios goes into
Twitter and sponsors that tweet and amplifies it, that's
a new way to advertise.
That's not an old way to advertise.
When we start doing that in this medium at scale, we will
find that it works.
Putting a banner ad in front of somebody, or running an
interruption video preroll, that's dumb.
We shouldn't be doing that.
LAUREN ZALAZNICK: But you know what?
LeBron is like television.

When he gives up his NBA salary, that's when you can
tell me there's a new market created by his
paid tweet for a movie.
FRED WILSON: No, no.
He's not getting paid for that.
He watched the movie, he liked the movie, he told his fans he
liked the movie.
LAUREN ZALAZNICK: Someone might have slipped him a DVD
is all I'm saying.
FRED WILSON: Maybe, but I write about stuff every day
because I want to connect to my audience.
He's doing it because he wants to connect to his audience.
He's not doing it because he's getting paid.
LAUREN ZALAZNICK: And by connecting to his audience, he
gets a buck on the jersey that's sold at the NBA store.
The guy doesn't like movies that much.
[INTERPOSING VOICES]

ANDREW HEYWARD: One at a time.
Michael, hold on one second.
Go ahead, Lauren.
LAURA LANG: Respectfully two things have been said that I
would like to disagree with.
One is that content is not advertising, and I would like
to actually put forward a point of view that we have the
wrong definition of advertising, and that we
actually live in a post advertising world, and it's a
world where we have to go to market in different ways.
Example, one of the things that Digitas does, we talk to
our clients.
We say, we have to build active brands, not brands.
Why is that?
Because we don't believe that the world where we could craft
a message, or even pay someone to do content,
is the right world.
It's a world where the way I consume my content is going to
give me a path to feel differently about a brand.
And I would argue that the development of content and the
way we use content, whether you write it, or whether we
pay someone to write it, the way as a brand we connect to
it, co-opt to it, and share it, becomes part of our
post-advertising world, I think the challenge,
admittedly, is in the monetization of that, for
those people who provide content, but as a marketer,
since that's not what I think about, I think about, how do
we do this better for brands.
Content is very much a part of a post-advertising world.
And the fact that we really cannot say it doesn't work.
We have brand after brand that has shifted their dollars into
new spaces, who is creating new awareness, creating new
connections.
We have brands right now that are launching with 100% of
their marketing budgets in media that this panel would
call new media.
I find new media an ironic term.
I think it's the media that we are using today.
And I believe that as leaders, we are going to have to
understand that there's a different definition of
engagement and communication that goes
into building brands.
And that's just what I'd like to add.
LAUREN ZALAZNICK: I just want to say, don't forget I run a
huge digital business, and my whole world is about
innovating inside all media and causing people to
seamlessly, without even knowing it, knowing that
they're consuming something that I don't call new media.
I think that it's kind of a beautiful vision to be in this
post advertising world.
I think we're actually not there yet.
I think you run a digital agency.
So until you run an agency, not a digital agency, and
whatever the other agencies are called have the same name,
we're still working towards it,
And the other thing I just want to say, there's news
people and very creative people on this panel.
There is something to be said, actually, to not seek to blend
all messaging and marketing, advertising, with things that
were born creatively and for entertainment purposes or for
news purposes.
So many other panels are really talking about, I guess,
the social danger, political danger, moral danger, of the
total blend of messaging and creative content, or news
content, or information content.
And I would just always seek to balance a complete embrace
of the new and innovative and the seamless with the creative
forces that are separated from the economic forces of what
many of us do.

ANDREW HEYWARD: Let's stay on that for a second.
Michael wrote an influential piece, along with Chris
Anderson writing a parallel piece a couple of issues ago
in Wired about this trend towards companies that, again,
want to control the experience.
I don't want to characterize it for you, Michael, but to
what extent is traditional content going to remain really
important in this new world that we're talking about?
Because I agree, I don't think it can all become advertising
or even overly blend with advertising.
Maybe that's a journalist's perspective.
But there does seem to me--
maybe backlash is too strong a word, but a trend back towards
the opposite of the vision that Fred just shared with us,
which is that ABC, of course it's a piece of media, but
that everything is going to be like that.
You weren't really implying that everything would be, but
that there'll be all this media, and there'll be
filtering devices like Twitter.
It seems to me that the traditional media players are
kind of starting to rise again and sort of
reassert their influence.
MICHAEL WOLFF: Well, they're trying.
Will that be successful?
We've seen no indication yet of anyone who's waved their
fist and has gotten something for it.
Rupert has decided that he's going to make people pay, and
he's tried that, and you know what?
No one is paying.
So Conde Nast, the company that I work for, is now
pursuing with some intent and enthusiasm this idea that
people will take to reading their magazines in essentially
the same as they've always been, but now suddenly
available in tablet form.
Will that work?
It's totally unclear.
My personal bet would be that it won't work, that the
fundamental experience, that the idea that we are now
doing, what we're engaged in, is essentially filming theater
for a video experience, and that was a failure as a video
experience.
ANDREW HEYWARD: Paul, can speak to this?
You surely have to wrestle with this issue, because you
have a very successful business that is now--
PAUL ROSSI: I mean, I'll just touch on a couple of things.
We are still in a world where 30% of the average person's
time is spent online, and 13% of
marketing dollars are online.
So that gap is going to narrow.
Whether you like it or not, it's going to narrow.
MICHAEL WOLFF: Well, how come it hasn't
narrowed so far, though?
PAUL ROSSI: Well, it has.
The graph is growing.
MICHAEL WOLFF: It happened much quicker in the television
business, and those numbers have been pretty stable now
for several years.
There is a point of resistance here which we haven't
adequately analyzed, and certainly
have not yet overcome.
PAUL ROSSI: Well, I'll leave that to the agency world to
answer that one, marketers to answer that.
But my view would be that actually, it's about how you
scale up lots of small ideas around tweeting, and blogging
and everything else.
So we do a lot of experimenting online, and you
get seven people who buy something.
Well, that's not going to change your business when I
can send out 20 million bits of direct mail and get 7,000.
So I think there's a challenge about how you scale up some of
these small things.
But to me, it fundamentally comes back to brand, and
whether you are a blogger on ABC, you still have a brand.
You have a personal brand, and you have a brand that's giving
you permission to talk to an audience.
So I think this idea of content, it's about brand.
If I deliver an Economist video, or an Economist audio,
or an Economist iPad app--
and it's coming, before anyone asks me, in November--
if I deliver that, it has to be as good as The Economist.
There's no difference to me, but what people are buying is
the brand, and they have to pay to engage with the brand.
So I think brands are important.
And then lastly, we don't go and sell advertising anymore.
We don't sell advertising.
We sit down and talk about taking marketing budget share.
So we have conversations.
If 100% of our advertising pitches two years ago were
about print, now 50% are about print, and everything else is
about a combination of eight other things, events, social
media, Facebook, all these things are part of every
conversation we're having.
So the world is changing, because we have to compete for
marketing dollars as a media brand--
I think of ourselves as a media company--
and not just advertising dollars, which a year ago, we
were absolutely doing that.
ANDREW HEYWARD: Go ahead, Trevor.
TREVOR KAUFMAN: Well I was just going to say, it's a
strange assumption to say that the amount of time somebody
spends in a given medium and the amount of advertising
dollars we allocate to that medium should be exactly
parallel, right?
Certain media are good for doing certain stuff.
So TV is great, and TV commercials can be really
entertaining, and there's nothing
really wrong with that.
And that's a much better place-- it would to be really
responsible as an advisor to my clients if I said, you know
really, a Coca Cola style brand, a fast-moving consumer
product should really spend a ton of money online.
Because in some cases, they can come up with very clever
tactics, we can do a lot on their behalf to do things
often farther down the purchase funnel, when you're
interested in consideration, and sampling, and retention,
and all the things that we do later on in that customer
journey or the customer relationship that
Laura talked about.
But to say, some of the branded content models people
talk about, or to really move too much money into that too
soon, it's not necessarily a good idea.
Because when we're doing marketing for Dell, I was just
saying over breakfast, if we can run an add on CNET that
says, somebody who's in market for a PC, you can buy an
Inspiron right now $499, that's enormously effective.
It doesn't mean that I think they shouldn't do other forms
of traditional advertising that have also worked for them
the past, or overweight one just because people are
spending more time there.
Moreover, as a consumer, I don't necessarily want
advertising in every part of my life.
So for example, Facebook I think was not designed to be a
particularly effective advertising medium.
I don't think advertising was in Mark Zuckerberg and
everybody else's head when they made that up.
I think we have to live with that.
I think that's OK.
ANDREW HEYWARD: Evan, you've been listening thoughtfully.

Your company is sometimes described as a social network
or as a media company.
What are your thoughts about this as certainly marketers
are eyeing Twitter with great interest, and Fred cited a
dramatic example of LeBron James, one of many more to
come, I'm sure.
EVAN WILLIAMS: So Twitter wasn't designed as an
advertising medium, but it's not a social network.
Commercial messages fit very well on Twitter because we
design it as a one to many publishing system.
And from the beginning, there have been companies on there
who have recognized it's a very useful way to get a
message to their constituents.
So we feel very good about the position we're in because
people are opting in to essentially advertisements in
mass numbers on Twitter because it relates to what I
was saying earlier about the advertising actually being
helpful and respectful.
They're about delivering useful information in a
concise and immediate way that helps
people make better choices.
And so Dell is on Twitter, and a million people opted in to
get their special outlet deals because it's useful
information.
But lots of other people signed up for stuff that's
less direct response and much more branding, like because
they care about Starbucks, and Starbucks can send these
little branding messages to them on a daily basis,
multiple times a day basis, that just make them feel
something about Starbucks or remind them of Starbucks, and
ask them questions about Starbucks, and get them to
engage and maybe retweet and tell their friends about it.
That is a new and compelling thing.
Most of that, we're making no money off of, so that's a
thing we're figuring out.
The promoted tweets, when people want a little lift for
these messages, is useful, and that's how we're making money.
But there's a tremendous amount of marketing and
advertising going on in a medium that is opt-in and
helpful to consumers, and sits alongside--
the use model is exactly the same as the content, the
entertainment, the friend messages, and everything else.
And I don't know if that's possible in other mediums, but
that blend is there and it works.
JOHN ROSS: Can we talk about mattresses again?
ANDREW HEYWARD: Please.
JOHN ROSS: So it's easy as a marketer, as a client, to be
enamored with the characteristics of high level
advertising and to talk about branding as if
it's an into itself.
But when you sit down with shoppers and you talk about
their needs and what they're trying to accomplish, the
infomercial serves a lot of really important needs, as
does something as particular as letting me know that the
local Starbucks is doing some special, or they have an
entertainment in a local [INAUDIBLE].
This idea that somehow direct marketing is a low form of
advertising that should be discounted in the face of
brands, I guess shoppers reject.
And as an ex-retailer who did a lot of really low form of
advertising, I'm embarrassed to say, I think we've got to
step back and look at what the consumer is saying.
So the needs that I have today as a shopper, when I'm making
a decision, I've got to give up my money, certainly
compounded by the economy, but it's also more than that.
A shopper walks in today with a laundry list of guilt-ridden
angst-ridden behaviors they bring with them.
Is this product environmentally responsible?
What are the economic implications of this?
Am my employing some underage child in India?
Is that a good thing, or the fact that they're working in
this factory, is that a bad thing?
What about the environmental issues with the product, and
how do I dispose of it?
And certainly, the health and safety issues, when I put this
product onto the dinner table or hand it off to my children?
And so you've got this incredibly lonely decision
that's driven with so much more information, that's
driven by so much more paranoia about
making a great choice.
And if a 30-minute infomercial at night helps me learn more
about the bed, or that tweet gives me an indication of
what's going on in my local marketplace, I'm going to
subscribe to that because it made me shop
smarter in the moment.
[INTERPOSING VOICES]
JOHN ROSS: One more comment.
Just one more comment.
So if I step back and look at the utility, there's so much
going on with utility in terms of new technology.
If I look at the utility and the value that it drives in
the moment, and it's very easy to point to some sort of
iPhone application and say, that's utility, that's giving
me information in the moment.
If I step back and look at the shopper's journey in the end
as just shopping--
it's not like we think of it, like preshopping, and then
there's direct mail, and then there's the low form of
advertising like the packaging, and the store, and
the hideous wobbler on the retailer's shelf--
but if I look at that as an end-to-end gestalt, an
experience the shopper goes as they go, I don't know what I
need to do, and at the end of this, I've made a decision.
To the extent that new media can help empower and inform
and wrap that experience, we've got a winner.
MICHAEL WOLFF: From the media point of
view, this is the problem.
Direct marketing is low margin.
It has never given us, essentially, enough profit to
create content.
So direct marketing only pays for marketing.
Brand marketing pays for something much larger, and we
get to make great television shows, and good magazines, and
the environments that ultimately lead to higher
margin marketing.
So what we've done by this, by creating this direct medium,
is we've lowered everybody's opportunities.
HILARY SCHNEIDER: One thing consumers have is
they're time starved.
And all of a sudden, you have this ability with services
like Twitter and mobile devices--
when I'm driving home and my son informs me he needs a new
lacrosse stick, and I have no idea where to get a lacrosse
stick, to real time understand how do I find a
store that has it?
How do I get there?
It knows my location.
And I feel empowered.
EVAN WILLIAMS: You shouldn't be using your
phone while you drive.
HILARY SCHNEIDER: It's illegal in the state of California, so
of course, I'm not doing it.
I'm asking my son to do it.
But what I would say is that I feel like it's so freaking
empowering.
I mean, I feel like the ability to really take so much
of the agony, and the reality is you get so much more done.
And for marketers to be thinking about how to take
advantage of that real time.
And I think this is kind of this Faustian debate of it is
performance, or is it brand, or do I want to drive traffic
to the stores--
most marketers that are out there that have major budgets,
it's yes and yes and yes.
They want to build a brand, they want to drive performance
because they have some metrics, and most of them want
to drive some kind of an action.
So it's all of it.
ANDREW HEYWARD: Lauren?
LAUREN ZALAZNICK: I was just going to add another way of
looking at the shopper marketing thing, which by the
way, is absolutely a fascinating new world of
consumer insights and behaviors that go way beyond
this thing called the demographic, which is over and
really takes the newer form of that, which you guys referred
to before, the life stage approach, which is right on.
But as people become better shoppers, because
there's more choice--
I run this group at NBCU called the Women and Lifestyle
Entertainment Group, and we do a tremendous amount of
insights work on women in particular.
And the stunning set of facts that I'm sure you guys all
know is 85% of all consumer purchasing power, absolute
dollars, in the United States today are driven by women.
And it's clearly not just in the grocery aisle, you can't
get to that number with that.
It's technology, auto purchasing, financial
services, financial planning, et cetera.
And the best thing about the overwhelmed woman--
mother, taking care of a sick parent, working, almost
outnumbering men in the workforce, everybody's
working, recession--
is that most women are willing to do a lot of homework, and
they like to be informed.
And again, you can't blame or credit the technology.
If the care circle, the sewing circle, whatever it's been for
a long time, that circle just got a lot bigger in a hurry,
and they're not afraid to ask for advice, and when they get
their opinion, that stat of the 85% stat is when women
decide, at the moment they decide they like that product,
the first thing they do is not decide to buy it.
96% of those women who can identify the time that they
decide to like the product want to tell quote, unquote,
"everyone they know" that they like the product.
And that's such an open way, that I would just say that
direct marketing now works both ways, and that work--
JOHN ROSS: We're in violent agreement, absolutely.
LAUREN ZALAZNICK: Right?
So it's just it's an evolution, and I just wouldn't
get stuck on the thing.

I'm actually getting a lot of research from iVillage, which
has this passionate, 30+ million
unique audience a month.
That's a lot of women.
20,000 brand mentions a month on iVillage.
We went and found out all about that.
But our best and most innovative partnerships as
big, old soon-to-be-dead moribund media has been with
Twitter, the groundbreaking first to the tape, first media
brand on Twitter, first media brand on Foursquare.
So I'm just saying, don't blame or credit the technology
at that moment.
Do what you're supposed to do.
Whatever you like you've been put on the face of the earth
for, go serve it wherever it is.
So I just think that the whole shopper marketing thing and
the technology is so fantastic, but maybe not the
beginning and the end.
LAURA LANG: I think one of the things we've all touched on
without being explicit is the notion of digital data.
We've talked a lot about how we want to market in this new
age, or what the role media plays, but one of the most
interesting things we now have in front of us is an
extraordinary amount of digital data.
We're not online anymore, we're digital.
Whether that digital is the way we use our phones or
ultimately interactive television, it's going to be
very difficult to distinguish digital and non-digital as we
go forward.
It's more a question of how we want to use that information
to make our efforts more meaningful, or create value in
that digital data chain.
Example, we talk about a customer journey.
It's not really a sequential, I become aware,
I consider, I buy.
It's more like the term in mathematics, a random walk,
where I might hear about something, I might go talk to
my friends, I might go have some fun.
Later on, I might actually buy it without even
thinking about it.
How do we as marketers and as media understand that new
random walk?
How do we use the data that all of us collectively have
about everything from what people are searching on, all
the way to what people are tweeting, to what people are
reading, to what people are writing?
Because the next generation of how we create value is going
to be to take that data, wherever it comes from, and
use it to inform the way we spend our time and the way we
create experiences in virtual real time.
And I don't believe this distinction of old and new
media is going to remain relevant.
It's going to be the way we take all of our channels and
take our digital insight and data, and ultimately make that
connection.
It's not direct marketing, necessarily.
It could be building my brand because I've identified who's
really interested in that product somewhere else.
EVAN WILLIAMS: I think one thing that Lauren said that
really rang true to me was this notion that the
lifestyles we're living today are so hectic and so full that
the knitting circle and the book club and the coffee time
among women are not happening as much, and those
conversations have moved online.
And those conversations are public now, so it gets back to
the comment about more data.
So those conversations actually exist. They exist in
the forums in iVillage.
How many brand mentions?
LAUREN ZALAZNICK: Over 20,000 a month.
EVAN WILLIAMS: Think about it.
20,000 a month.
And I don't know if you're doing this yet, I hope you
are, is if you could turn those brand mentions into
marketing opportunities for those brands.
Even if they're negative brand mentions, just to be part of
those conversations.
Could never do that before.
A brand could never show up at the knitting circle and say,
I'm here now.
Let's be part of this conversation.
I think that's huge, and that's native to the medium.
That's not running a banner ad, that's
not running a preroll.
And that, I think is where the action is.
LAUREN ZALAZNICK: I will say that yesterday we announced
this thing called the Women at NBCU Brand Power Index.
And it's probably very clumsy, and we were overwhelmed by
this incredible and unique set of data that is the first time
we've experienced it.
So we sought to make an index, just a market mover index, of
the old thing called word of mouth.
One data stream is person to person, actual word of mouth,
that we can capture.

Online mentions, straight-up Web 2.0 mentions.
And the third data stream is social media mentions.
So these are the three newish ways, outside of the book
club, knitting circle, care circle, that we found were the
most consistent and high-powered data streams, and
we indexed them and just made a list of the most mentioned
and the quickest movers up or down, because we want to know
why, all of a sudden, something is going up or down.
And first of all, we announced it, and the top 20 brands
called, and said, why am I number x, and am I up or down,
and what are they saying?
And the greatest piece that Fred points to is that a
couple years ago, people were loath to enter this space
because of the fear of lack of control, right?
What if they say something bad?
What if I plunk this new can of whatever product into the
online knitting circle and they hate it?
And the thing that I think marketers and product people
and human beings have gotten to a point of is saying, I can
have a dialogue with this hateful product, and if you
can convert me back even a little bit, then you don't
even have a fast mover up the index.
You have a brand proselytizer who will be like a virus, in
the positive way, to then tell that whole
circle how they feel.
MICHAEL WOLFF: This is all great.
I mean, this is a great vision, and relationships are
a great vision.
All this sounds great.
How come nobody's paying for it?
I mean, let's get to the bottom here, and the real
issue is that we can define the hell out of this, and
define the advantages of it, but in the marketplace, the
market is saying, this is not really worth-- this is
certainly not worth what it used to be worth.
[INTERPOSING VOICES]
ANDREW HEYWARD: So let's stay on that.
Fred, I was actually going to point to you.
FRED WILSON: I don't think that that's exactly
what's going on.
You don't have to pay for it.
The truth is that so much of this opportunity is free if
you just participate in the mediums, what Ev said.
Most of the advertising that happens on Twitter is free,
because the marketers don't have to pay for it.
Think about Craigslist. Craigslist is a $100 million
business, wildly profitable, and it has basically collapsed
the $16 billion classified ad industry.
Why?
Because most of what's on Craigslist is free, you don't
need to pay for it.
[INTERPOSING VOICES]

PAUL ROSSI: It's not free, because I don't think that
marketing budgets are going up.
CEOs aren't giving CMOs more money.
And as a CMO, you're sitting there saying, I now have to do
this stuff, but I'm not necessarily writing a check,
but I need people, I'm employing agencies.
So this idea that it's free, there is
opportunity cost in that.
So I don't think it's a completely--
FRED WILSON: I think you're right.
I think what's happened is we moved from media
buys to media execution.
So the dollars are flowing to a different place, and we're
seeing it as the dollars aren't flowing.
But they're flowing, they're just flowing differently.
MICHAEL WOLFF: Even if this is true, that it works at a much
lower cost, we still have an economic conundrum here of a
business that used to be this big and is now this big, which
sort of says, we all ought to get out of it,
because it's shrinking.
And also, I mean, it says something really profound
about the future, which is that we don't
have a growing business.
We don't have something that is going to replace what was,
that we're involved in a transformation, certainly for
the media business, to nowhere.
TREVOR KAUFMAN: But Michael, didn't the media business at a
certain point say, when the first banner ad ran in Wired
Magazine, wasn't that the media business to an extent
saying, this is all about the content, and content is king,
to Andrew's point, right?
And we're going to have this big page of text and this
little banner ad at the top.
And then now fast forward to several years later.
We're saying gee, the web isn't a great advertising
medium in the way we'd ideally like.
The dollars aren't flowing.
Well, if I look at a print copy of Wired, it's a really
good advertising medium, there are big, full-color ads.
But there's no equivalent in the experience, the web
experience, of reading Wired.
MICHAEL WOLFF: Well, OK.
So in other words, what you're saying is that the people who
have created this new medium have for some reason not been
able to respond to marketing exigencies, to create
something that really works.
I mean, in that regard, it's true.
All other media has been created by marketers.
Suddenly, this media is created by technologists, to
your point about Facebook, not set up as an advertising--
HILARY SCHNEIDER: I think we should just
get some facts straight.
We talk about digital media isn't growing,
it's just not true.
It's not true.
So if you just look at the facts of the situation, all
other media, if you go back and you look at the last
several years, I'm talking about the US, probably is true
on a global basis, is percentage of eyeballs going
to other media is going down, percentage of eyeballs going
to digital is going up.
If you look at how they're spending their ad budgets,
their ad budgets are going down in other media, they're
going up in digital.
So we can talk about the fact that share isn't shifting, but
it is shifting--
FRED WILSON: They're going up, but per eyeball, they're
spending less.
That's the crucial metric there.
LAUREN ZALAZNICK: And total media consumption is going up.
So I wouldn't parse it like there's--
the thing that is so transformational is that
people think that these 24 hours in a day is one pie
chart driven by sleeping and media.
That's always how we break up on PowerPoint slides, there's
sleeping, and then there's media consumption.
And so you need Venn diagrams now in my boardroom charts.
And so total media consumption is going--
I went to the Yankee game on Saturday, they
lost, it was terrible.
But in the new Yankee stadium, there is awesome, national,
decades-old beautiful brand advertising, and there's Joe's
Hardware Store, Frank's Bank.
and 1-800-MATTRESS.
It's just the perfect, like you get 55,000 people, many of
them are the same every game, and you have the biggest and
the most local.
And I think that that balance has just--
our television advertising hasn't
changed too much either.
Very few people ever thought, I won't have four commercial
pods an hour.
I'm just going to do one big one.
No one ever did that.
JOHN ROSS: This is why the only place media people can
really go on vacation is Cuba.

ANDREW HEYWARD: How are you going to finance great content
in this model that we're talking about?
Let's just shift a little bit here.
FRED WILSON: Well, I think what I see my kids doing is
buying a lot of television.
And I'm not suggesting that television is going to become
the totally paid product, because I don't
think that's true.
I think as many people have said, television advertising
is fantastic.
You can tell a message in television that you can't tell
in any other medium.
But I also see my kids just going and buying shows on
iTunes or watching movies on Netflix, and they're paying
for that experience.
And I really believe that we're going to see more and
more of that kind of behavior.
I think the subscription models are going to work,
maybe not in newspapers, don't know about magazines, but I
definitely think in video content, expensive, highly
produced, high-quality content, even inexpensive,
high-quality content, people will pay for it.
MICHAEL WOLFF: But even that model, that's going to be a
troubling model, because even if they do pay for it, you're
not going to achieve the revenue levels that we
achieved when these were mass market advertising
opportunities.
FRED WILSON: Depends who you mean when you say we.
LAUREN ZALAZNICK: Right, there's a lot of
components to the we.
I view it as more societal than the dollars to dimes
argument or the social media versus new media, whatever
that means, marketplace.
I view it as, I think a lot of us have kids of varying ages
on this panel, and our kids may not be 100% representative
of the country's kids or the world's kids, but we have this
little sample and we have to engage with them all the time,
and that's why I know as a iVillage runner now that moms
are actually the fastest adopters to media because
they've got to keep track of those kids.
Where are you?
Tell me, show me.
I'm going to pick you up at 3:15.
But the societal element is the phrase back to one of the
set up questions.
I think the phrase for the future is that these kids are
addicted to choice, right?
And if you can capture an addiction in society, you're
the pusher man, right?
And the old adage in the school yard is, you give them
a little taste for free, and then you've got them.
So I think that right now we're testing give them a
little taste for free, but they're addicted to the
Office, so they've got to buy it on Hulu.
There's an argument, is it $1.99 or $0.99 on iTunes?
Whatever the argument is, the fact is that this addiction to
choice is the new market, and everyone will get in line as a
content creator--
MICHAEL WOLFF: Of course, addiction to choice is a
contradiction.
It means you're not addicted.
I mean, this is like--
FRED WILSON: No, no, Michael.
They are addicted.
They're addicted to choice.
They want that show on their laptop so that it's with them
wherever they are when they want to watch it.
They are addicted to the show, I can assure you.
MALE SPEAKER: Control might be a better word, actually.
LAURA LANG: And I think it's also about time
and a sense of time.
It's not just choice.
It's about wanting what I want exactly where I want it and
when I want it.
LAUREN ZALAZNICK: I don't mean choice by what is it.
I mean when, where, what, if, how.
MICHAEL WOLFF: And this is all great, and this is all true,
and this is all one of the great byproducts of
technology.
But it's not good for a business model.
Choice is bad for media in terms of media making as much
money as an possible--
ANDREW HEYWARD: Another way to say that is that, I'm sorry,
there's been a comfortable oligopoly that essentially has
been the working model for content creators and marketers
for decades, and now that oligopoly
is starting to crumble.
TREVOR KAUFMAN: It's like the music business.
The music business has never been better for
bands than right now.
It's terrible for record companies.
But guess what?
They were incredibly inefficient.
I pay for ESPN.
I'm not a sports fan.
I pay for that, and I subsidize everybody else's
watching of ESPN.
How long can that go on?
ANDREW HEYWARD: Evan?
EVAN WILLIAMS: Well the choice--
the question thought about another way.
Is the reason, of course it's not going to work as well
because people didn't have a choice before but to sit back
and watch the TV commercial.
And now they're not only buying content, they're
TiVo-ing it, and given the choice, they'll skip the damn
commercials.
They don't like those as much.
And given that there's infinite media to consume,
they're not going to waste time on stuff they don't want,
and that's the marketing messages.
So that's just the fact.
They're are no longer a captive audience, so yeah,
it's going to make less money.
HILARY SCHNEIDER: But I think when you think about it,
really, we've talked about paid versus not paid, and we
talk about highly produced video and entertainment.
I think consumers have always thought that
they paid for that.
They went to the movie theaters, they
were paying for that.
I think when it comes to news--
MALE SPEAKER: Well, they didn't think that on network
television.
HILARY SCHNEIDER: They didn't on network
television, but I think--
LAUREN ZALAZNICK: Since they don't have cable, though,
they've been paying for network.
HILARY SCHNEIDER: They've been paying in different modes.
I would say there's a big distinction.
I'm trying to make a different distinction, which is between
entertainment content and news and information, where I think
for the most part, consumers have always felt that they
were paying for the delivery to their doorstep, or they
were paying for the magazine to be
delivered to their homes.
And so there's not a consumer mindset that they've been
paying for that.
Now what's interesting about it in terms of to your point,
they want to skip the advertising.
If you look at most of the women's magazines, the most
popular issue is the September magazines.
Why is it the most popular issue?
It has the most advertising, and people are actually buying
those magazines.
My husband will say to me, why?
That's all ads.
And my point is, exactly right.
I want to see those ads.
And so I think as we think about those models and where
it works or it doesn't work is, where will they pay?
Where is the advertising so compelling to me that I'm
actually buying something to get those ads?
LAUREN ZALAZNICK: I have to interrupt.
The September issue of Vogue, the September issue, the
famous September issue, now a beautiful movie, I think that
that is just a classic media chicken and egg thing.
There's more advertising in it because it editorially covers
the trends for the year.
That's what Conde would say.
MICHAEL WOLFF: Also, it has more readers in it, too.
So advertisers are going to the readers, not
the other way around.
HILARY SCHNEIDER: But the consumer likes it.
LAUREN ZALAZNICK: Right.
I'm saying that there's no barrier just because it's
thicker because of ads, and the same number of editorial
pages is no barrier to that.
I would also just say that there's something amazing
about the power of consumers, which is that people don't buy
the cheapest of everything.
Poor people have to,
recession-struck people do more.
But having built many businesses on the absolutely
arbitrary and fungible and sometimes, not often,
manipulate-able vagaries of consumer behavior, nobody
needs a $700 pair of shoes.
Not one person in the whole world needs a
$700 pair of shoes.
You should buy 70 pairs of shoes for $10, obviously.
So I think there's also, like people pay for stuff at
different times in industrial and consumer behavior times,
that don't really make any sense.
Sometimes it's quality, sometimes it's beauty,
sometimes it's advertising, sometimes it's because a big
store carries it.
And so you want to put all these consumers into boxes.
It's when they surprise you and lead you that is often
helpful to look at.
ANDREW HEYWARD: So Laura, one quick second.
We're in the home stretch, and we do want to take some
questions from you.
So we'll let Laura make her point, and then we do have a
couple of microphones.
So if you would be brave enough to raise your hand and
ask a question, you're on deck.
Go ahead.
LAURA LANG: Often now, people talk about paid, owned, and
earned media.
We have not mentioned it yet this morning.
Paid being that which I bought and I could get my reach or my
eyeballs, owned being the places where I as a marketer
could actually connect.
For example, it might be my own website, it might be my
own email list, it might be anything that I could control.
And then earned, which is those things that--
there are many definitions, but whether it's word of
mouth, or social, or things that are shared.
And one of the challenges I believe we all have as
marketers is, how do we think about allocating investment of
people and marketing dollars across these, because they are
no longer discrete.
And as we think about how we are going to connect with
consumer behavior, it's a combination.
The financial models and economic models of the paid
part of the media equation have to change.
But how valuable owned and earned are, and how they work
together is going to be an important part of how that
value is recreated as we go forward.
And I think that all of us are going to be learning how to
bring those together in different ways.
They're no longer discrete.
And I think that's a really important part of how we're
going to be marketing.

ANDREW HEYWARD: OK, wait one second, sir, to get a
microphone, please.
If you wouldn't mind identifying yourself, and if
there's somebody in particular you want to answer the
question, say so.
TOM KURZ: Sure.
Hi, my name's Tom Kurz, and I'm a co-publisher of
TheEscapistMagazine.com.
We're sort of a games and geek culture rag in
the new media space.
So my question, or I guess comment, goes first out to
Michael, who I'm a big fan of, but to the whole panel, I
guess, for comment.
That is, that I think in the past, advertising dollars
spent on television, or on billboards, or on magazines,
have been driven by traffic, really just traffic, like how
many people are tuning in, or how many people are driving by
a billboard, or what have you?
And so you have this internet medium created by
technologists, and all of a sudden, we have technology
companies going out there and saying, well, we're going to
tell you how advertising works.
And so we're judging advertising, in a way, on the
internet in ways that we don't judge advertising for any of
the other mediums. And so people go ahead and they spend
money in the mediums where they don't have to explain why
or show results, and then at the same time, we're looking
for results from internet advertising that really don't
reflect how people use the advertising.
So I think you have a situation where the money
hasn't accelerated into the online space in the same way
that it was with other mediums because we're calling this new
medium to the mat, and asking online ads to behave in a way
that we haven't asked of anybody else.
And so if we accept the adage that 90% or 95% of advertising
blows, and then we go ahead and we say, oh, and we also
have the measure its success online, it just takes a little
longer, I think, for the dollars to go.
And we still haven't figured out what's the best way to
message online.
But it's clear to me, the money has to go there.
I just think we're holding it, and it's the agencies and the
technology companies that I actually think need to take a
look at, what are we really doing to ourselves?
Why are we holding ourselves hostage by this sort of
measurement that we don't use for anything else?
So if anybody wants to comment on that.
MICHAEL WOLFF: One of the interesting things is that
we've also jury-rigged this notion of eyeballs.
I mean, this notion of eyeballs and of measured
audiences comes from old media, and then we've adapted
it into this new media in which we have all of these new
techniques, and I think questionable techniques, of
moving audiences.
So we suddenly have most of our audience visiting, most
brands are there, because they don't know why they're there.
They're there because Google has suddenly put them there.
So they don't know why they're there, they don't know where
they are, they don't know what they're reading, they don't
know what kind of context this is.
The entire experience becomes an atomized one.
So we're delivering these audiences that are, I would
argue, fundamentally low, low, low value audiences.

PAUL ROSSI: I think, why do we do it?
Because we can.
Why do we have this measurement system?
Because we can.
But the challenge for media companies to me, and this goes
back to the economic model, we need content so put that ad
over to get the click.
What you're starting to see, and we've sort of touched on
brand and content, but you're going to see it with news, I
think, is that effectively as media owners, you want the
news that's going to generate the most clicks.
So do you start creating content and going into
different directions because you're driven by
this metric as well?
So I think there's a slightly more dangerous problem in
terms of, as media owners, and thinking of content.
And there's a very interesting company called Demand Media
which absolutely takes this algorithm thought to its end
conclusion, which is, we will only write things that will
give us a higher ranking and a higher click on websites.

MICHAEL WOLFF: And we've tricked everyone to come
because we've SEOed the hell out of this, and that's our--
PAUL ROSSI: I'm not sure it's a trick, but if someone's
searching something and that's at the top
for whatever reason--
TREVOR KAUFMAN: Right, but you hire a cheap freelancer who
puts Lindsay Lohan in the headline, and that's your
business model.
HILARY SCHNEIDER: One of the interesting things is, it all
sounds so diabolical to me.
I actually want to just come back to the idea that there's
a lot of goodness in it for the consumer now.
So if you just take the real time information we have at
Yahoo, we can tell during the Olympics what people are
searching on.
So if it's downhill racing and there's a lot of red marks on
the snow, and they're really trying to understand what
that's about, we can see it in the searches.
So all of a sudden, you have an ability to real time be
able to surface the content that people care most about.
We recently acquired a company, Associated Content,
which has 390,000 contributors.
And it's an assignment desk in which we can create the
assignments.
There's both real editors as well as algorithms that help
us understand the quality of what's created.
And so when you think about a consumer who now wants really
relevant experience, they want the most relevant news,
sports, finance, and entertainment, which we can
give them the headlines--
[INTERPOSING VOICES]

MICHAEL WOLFF: You're just debasing the whole experience,
and so what we're doing is creating a medium which is not
going to return for us because everybody's going to
say, this is crap.
HILARY SCHNEIDER: If it's relevant to me and you're
giving me information I care about, and the way brands get
created, so let's just take [INAUDIBLE].
MICHAEL WOLFF: I know how fast those people leave that stuff,
and it's not relevant to them, and they don't want it, and
they're not grateful for it.
ANDREW HEYWARD: Note the last vestiges of civility crumbling
in the waning monents of the [UNINTELLIGIBLE].
Trevor--
TREVOR KAUFMAN: You said in your question something like
90% or 95% of advertising blows, and you
also brought up data.
I would say, some advertising blows more than others, right?
So if you take that as a given, and you actually look
at data about what advertising people like and don't like.
By the way, I would warrant 99% of branded content blows.
LAUREN ZALAZNICK: I would advocate that 90% to 95%
percent of everything blows.
So what?
TREVOR KAUFMAN: Good point.

But I think you have to--
what frustrates me and what I kind of keep throwing at
Michael, and to a lesser extent, Paul, is the idea that
in some media-- the difference between the September issue of
Vogue and everything else we're talking about--
and there's no black market, and copies of Vogue with all
the ads ripped out--
is that Tom Florio, and I presume whoever his successor
is, I don't know, really curates that group of ads.
He actually considers it part of the editorial product.
On television, people spend a fortune on broadcast graphics,
on shows, on branding the network, on advertising the
network, but when the ads come on, too many television
broadcasters throw their hands up and say, well, that's not
part of what we're meant to control or influence.
Same thing happens on the web.
There's sort of a slot there, and whatever the ad serving
company pushes in there is what winds up there, and too
few online publishers say, how do I make advertising with my
advertising partners in here that's going to be
entertaining and have value to my user base?
If that would happen, I think we'd feel a lot
less that it blows.
And if you look at data, consumers actually tend to
like richer, more animated, more interactive, higher
bandwidth advertising.
They hate banner ads.
But we don't really react to that on the publishing side as
much as we should.
ANDREW HEYWARD: Fred?
FRED WILSON: No, I don't have anything to add.
ANDREW HEYWARD: I'm sorry.
I thought I saw you lean forward position.
Over here, yes, go ahead.
You're on.
SAM: I'm not going to mention the company I'm with.
My name's Sam.
Hi everybody.

I have to say that this gentleman over here mentions
that we're being forced to measure online advertising in
a way that's not exactly the way the user responds.
And just as an example, people talking about how everybody
hates these banner ads.
My company gets behind the data and actually looks at
this stuff.
And people don't hate banner ads, and
people actually do respond.
I think the agencies are doing a horrible job
responding to it.
We're actually seeing the data and presenting it to the
companies and their clients.
ANDREW HEYWARD: And the question is, why?
SAM: I guess the question is, what realm maybe Laura from
Digitas can answer it, but what ways are you guys going
to answer with the data and to give these clients a better
understanding of what's going on from
their advertising online?
LAURA LANG: A couple of answers to that question.
There were several things in it.
The first one is, what are we doing with data to make the
entire advertising experience more valuable
and have more impact?
And I hear two lines of discussion.
One is, how do I make it more entertaining?
How do I make it more
interesting for me as a consumer?
And the other is, how do I make it work better for an
advertiser?
Because one of the dirty little secrets everyone in
this room knows is, sometimes advertising does not have to
be entertaining to work.
It just has to be very specific and very direct.
And we may not like it, it may not be creative, it may not
look beautiful, but it works.
And I think for all of us in the industry, our challenge is
as follows.
We still have to make it work.
And we have data that we've now automated.
In fact, one of the things that is possible now and
Digitas is out in the forefront of this is to take
all of this data that's so overwhelming, bring it
together in an automated fashion, and pull out those
things that really matter so you can make a different
marketing decision.
But more interesting is to say, how do I use that same
data to understand what matters to people so that I
can actually create, and often dynamically create, different
kinds of content, some of which I will be paying for
very specifically as branded content that's developed, and
some of which I may have already and I'm just going to
reassemble it in a very dynamic way.
And we are doing that today for many of our clients.
So for example, something we did in the early days with
Yahoo for Delta Airlines.
We knew, based on who was searching or who was visiting
a certain site, where the travel patterns of those
people were, whether they were Delta Sky Miles members, so
that we could actually serve to them information in a
banner ad about a fare sale.
If you lived in the Northeast, a cheap flight from New York
to Orlando, something very relevant, changed the
economics of Delta Airlines and it actually changed the
value that people saw in the advertising.
Because advertising is often a service.
It is not always a push message.
So the short answer is, data is going to unlock a next
generation of creativity.
Data is going to have to be managed, because there's too
much of it.
We won't be able to act, we'll be frozen.
And so we're going to have to say, how are we going to take
that data, automate it, and use it, which is something
that, as you've mentioned, Digitas is in
the forefront of.
And ultimately, how are we going to understand when it's
time to engage with content, and when are we going to use
the opportunities to talk to people to use more traditional
push advertising messages?
We have to get better at all of that.
MITCH SPOLAN: Hi.
my name's Mitch Spolan, I'm the Head of Sales for Yahoo.
I know a lot of you up there.
So I wanted to ask a question.
So I heard a lot of discussion about how in some situations,
it would be irresponsible to recommend
branding on the internet.

Advertising for me is always simple.
Advertising is about influencing people's behavior
at the root of it.
And I agree with a lot of the commentary
about how banners are--
it has such a negative connotation and has such an
association with what advertising on the web is, to
which it really shouldn't.
So as we've redesigned the web and changed the creative
canvas, and allowed for storytelling on the web, we've
seen unbelievable impact.
So my question is pretty simple.
I'd love your to hear your feedback, because last week,
CBS took over Yahoo, in many respects.
Yahoo TV, took over the log-in page of Yahoo, which is a
brand new creative canvas, took over the homepage.
And they owned the week to drive people, tell their
stories, preview their shows, drive them to television to
watch that night.
And when I checked, not only did the day's that these
messages run, that every show spiked in terms of search
behavior, not only show, but the network, not only the
network, but the actors and actresses.
They won every time slot that they were advertising in.
So that influenced people's behavior to
tune in that night.
So if we're using online to drive to an offline vehicle,
clearly, it has to work.
TREVOR KAUFMAN: So your point is that
internet advertising works.
I think we would all agree with you.
MALE SPEAKER: For building brands, specifically.

TREVOR KAUFMAN: We were talking a lot about the post
advertising world.
The only comment I made was, it might be responsible to
say, in all cases, only do internet advertising.
MALE SPEAKER: I would agree with that as well.
ANDREW HEYWARD: Take one more question, then we're going to
wrap up here.
We've got a lot of people that want to ask questions.
Give somebody the microphone, we'll have one more question.
All right, there you go.
What's that?
You want to do a couple more?
Fine.
What's that?
Two?
Really quick question, no speech.
If it's not quick, no gig.
MALE SPEAKER: No speech, but the future of media.
What's the government's role, if there is any role?
LAUREN ZALAZNICK: I didn't hear the question.
ANDREW HEYWARD: What is the government's role in the
future of media if there is any role?
Does somebody want to give a--
MALE SPEAKER: That could be a two-hour topic right there.
ANDREW HEYWARD: I was going to say, is there a 140-character
answer to that?
FRED WILSON: Yeah, I'll give you an answer.
They should simply mandate that no distribution network
can control what content the consumer can
see and cannot see.
Net neutrality, that's all we need.
JOHN ROSS: Some anti-Farmville legislation
would be good, too.

MICHAEL WOLFF: But the real answer, it will be a big role,
probably ever-growing, ever bigger.
PAUL ROSSI: And around privacy.
Privacy is the big thing, particularly with this
administration.
MALE SPEAKER: I think they should stay out of it,
[UNINTELLIGIBLE].
ANDREW HEYWARD: As you can tell from this last exchange,
there are probably many more issues that we didn't get into
than we did or were able to, even though we had a lot of
time and a lot of people.
It's an enormously complex issue.
It will be interesting to come back next year and see--
notice that we didn't hear any hard and fast predictions, but
we did get into some trends.
I think there was consensus around the notion of a vastly
empowered consumer and how her behavior and her desire to
connect in her own networks is going to change the business
of everybody here.
But how that plays out for companies big and small is
still something that's ahead of us.
I want to thank all the panelists for their generosity
and their willingness to engage in this dialog.
Thank you.