• by Mark Glaser , August 30, 2005

Culture Chasm

Madison Avenue and academia have rarely understood each other, but there's never been a better time for them to fix their dysfunctional relationship.

In the late '80s, a group of executives at McCann-Erickson was worried about new technologies and how consumers were gaining more control of media content. After reading The Media Lab by Stewart Brand, they were convinced that becoming a sponsor of the Massachusetts Institute of Technology (MIT)'s groundbreaking Media Lab would help give them an edge over agency rivals.

While McCann found the Lab continually ahead of the curve on technologies such as Internet advertising and personalization, the agency was never able to fully exploit the futuristic vision of the Lab and turn it into a business bonanza. The problems between the Media Lab and McCann are indicative of the stubborn gulf between academia and advertising agencies  two groups with a different language, culture, and relationship to money.

The Media Lab worked closely with McCann on its "News in the Future," digital TV, and personalization initiatives, according to Walter Bender, executive director of the Lab. Art Tauder, former vice chairman of McCann, who helped forge the relationship with the Lab, recalls that there just wasn't enough buy-in from agency executives.

"We knew about these things but we were unable to apply them," Tauder says. "One of the reasons is that you could have a small group within an agency that is turned on to academia for research, but unless the whole organization is mobilized, you can't really change it with just a small group of people. You have to have it come from the top of the organization."

Now, perhaps more than ever, Madison Avenue media and creative agencies must wake up to the need for more research and connections to academia. What was once the prophesizing of technogeeks in labs has evolved into mainstream activity that threatens traditional forms of mass media - time-shifted content delivered via multiple platforms and emerging micro-niches. Any agency that doesn't see these changes is destined for Chapter 11.

"The Internet has fundamentally altered the balance of power between media producers and consumers," says Henry Jenkins, co-director of the Comparative Media Studies (CMS) program at MIT, which is not connected to the Lab. "Consumers have more power than ever before to talk back to companies and inflict real damage to those who refuse to listen to them. Ad agencies need to better understand this new dynamic because old-style advertising simply will not work in this climate."

Jenkins' program, situated within the humanities department, takes a more practical approach than the Lab. He says there are plans for a Convergence Cultures Consortium, a corporate-academic think tank to help companies decipher the shifting media landscape. While the Media Lab doesn't conduct directed research, other schools such as Ball State University, Northwestern University, and the University of Florida are working more closely with the advertising and media industries.

Despite their differences, agencies and academia both need each other. The academics need real-world input from agencies, while agencies are hungry for research that can help them understand the seismic changes taking place around them. By looking at previous collaborations, we can start to piece together ways that academia and Madison Avenue might still find a way to connect.

Media Lab Conundrum

Agencies traditionally fulfilled their research needs with help from dedicated research firms, associations, and in-house research and development. But when it came to understanding technological change, the MIT Media Lab promised a new kind of partnership. Corporate sponsorship made up the lion's share of the Lab's income, and companies received access to the Lab's research on a non-exclusive basis.

For an ad agency looking to understand new technologies, the Media Lab seemed like the perfect partnership. The Lab built an analog version of a personal video recorder in the '80s, and helped develop cascading style sheets and mpeg compression. Entrepreneurs sniffed around the Lab in the late '90s as dotcom startups exploded.

"Many people [at McCann] first met the Internet directly or indirectly through the Media Lab," says Nicholas Negroponte, the Lab's co-founder, who also helped start Wired magazine. "I was a regular keynote speaker for the Direct Marketing Association conference and other such events. Ask [entertainment mogul] Barry Diller where he first learned about [the Web]. It [was] more [keyed into developing] awareness than specific projects executed at agencies."

But awareness can only go so far. While the Lab boomed during the dotcom era, it has lost its luster during the post-boom years. In 2003, Wired ran a story about the Lab's troubles. A new building was never fully funded, and the Lab was having trouble attracting sponsors. The story pegged corporate sponsors at 125, a number that has dwindled to about 75 now. Today, a spokeswoman says that fundraising actively continues for the new building.

Negroponte says four agencies initially sponsored the Lab - McCann, Dentsu, Hakuhodo, and WPP Group, the big ad agency holding company - but they all dropped out in '01 and '02 at the nadir of the dotcom bust. Bender predicts that agencies will return at the price of $200,000 per year (affiliate sponsorship is available at $100,000). But they'll have to think hard not just about spending the money, but about managing the relationship with the Lab to leverage intelligence about future technologies for today's marketplace.

"The Media Lab doesn't do directed research," Tauder notes. "You could get some advice from a professor, but you can't say, 'Hey, I want you to put professors and students on a project like newspaper ink.' They have their own agendas on what research should be.

"They don't do directed research, but others do. On that spectrum, there's a role for both," adds Tauder. "You have to look at the philosophy of the university and how much direction they're willing to take, and the balance between their mission to educate and their mission to get applied experience." So Media Lab research could be just one piece of the puzzle for agencies looking to understand the future and apply its lessons today.

Negroponte is predictably bullish on the changes coming to Madison Avenue.

"With the exception of sporting events and outdoor advertising, mass media will no longer exist," he says. "Even those are in question, as each viewer can see something different. This means that personalization is the key to the future. It is not just a narrower demographic, but a veritable understanding that comes from trust."

And ad industry people have woken up to the need for intelligence to guide them through a time of uncertainty. Jim Spaeth is a former president of the Advertising Research Foundation (ARF) and a founder of Sequent Partners, a consulting firm focused on marketing metrics. Sequent is working with Ball State's Center for Media Design and its unique way of measuring media usage - merely observing people.

"Given that the entire media world is changing in very fundamental ways, and online and other technologies such as IPTV and wireless within the home are driving this transformation, the agencies must be as well-informed as they can be, otherwise they are not serving their clients' interests or their own," Spaeth says. The growth of the online medium took them by surprise and they lost a lot of business to new, online agencies. This time the changes will not be so isolated and will impact traditional media - the heart of their business, he says.

What Went Wrong

Because the Media Lab gave faculty and students so much freedom to design their studies, at times their work succeeded within academia but was too complex for application in the real world. Gabe Samuels was in the advertising business since the mid-'60s, and retired two years ago. He was formerly a senior vice president at the Advertising Research Foundation.

Samuels recalls a forecasting project he pursued at the Media Lab through the ARF four years ago that ended up being too complicated for practical use. Samuels says the ARF bypassed agencies and got 20 advertisers to invest in the project. They ended up needing a consultant just to make it work.

"[The project] takes too much of an egghead type to work with it," Samuels says. "If you want to predict certain things, it uses fairly sophisticated formulas to project what will happen. You can play 'what if' games. But in order to play with it, it's like somebody invented a car that has 75 gears, and 15 ways of inflating the tires, and 27 ways of steering. ...It points to the fact that with academics, you have to invest more than just money - you have to invest time, and manpower, and intellect to work with them because they speak a different language, they're more theoretical."

While Tauder believed McCann could gain all sorts of benefits from being associated with the Media Lab - ranging from creative expression in graphic design to introducing clients to emerging technologies - the relationship was difficult because of the culture clash between the agency and academia.

"For the first four or five years, it was a real struggle because the orientation of academia and the advertising practitioners was so different," Tauder recalls. "The language is different. The career paths are different. Our time pressures and time cycles for business were different. It took a number of years before we could communicate well together, understand each other. Today, the projects are far more expensive, and I think getting involved in a major project at a university is a major investment. It's not just pocket change anymore."

Samuels agrees, and says money is a stumbling block. Agencies don't want to part with the cash, and academic institutions always need cash infusions. Samuels doesn't think the mindset of agencies has changed much in the past four decades, and that there remains a reluctance to fund research.

"Advertisers don't really want to pay for anything," Samuels says. "Academics always want somebody to sponsor something, they're always looking for some money. They're used to government money and foundation money coming in. That's how they operate. The other problem is that people in the industry don't think that academics have their feet on the ground, they're just doing blue-sky stuff and don't understand our business."

Stacey Lynn Koerner is executive vice president at Initiative Media and director of global research integration. She has worked closely with the MIT Comparative Media Studies group on engagement metrics and how viewers of "American Idol" became engaged or resisted brand integration with content. Koerner raved about the collaboration with cms, but was fairly open about the problems she encountered in the academic world.

"The drawbacks are that you as an agency work in the corporate world, and academics are in the academic world, don't have the deadlines and pressures of the corporate world, and want the highest quality dataset that they can get," Koerner says. "And testing that dataset over a long period of time when you're trying to make decisions during market cycles, you don't have the luxury to be 100 percent accurate. [Academics] have a different way of dealing with deliverables than you do. It's not like the business world, where you can say, 'I know I told you I needed it next week, but I really need it this week,' because that will rock their world."

Spaeth also stressed the deadline issue with the academic world, where pressures to deliver are not as great unless one is undergoing a dissertation defense. Academics are accustomed to having research papers go through a peer-review process that can take up to two years, Spaeth notes. So, there's rarely a rush, while business folks needed the research yesterday. The exceptions to the rule come with academics who do consulting work. Spaeth says that Ball State's program is chartered to address near-term business issues, while also serving academics and students.

If agencies complain about the snail's pace of academia, it's not surprising that academics are frustrated that agencies are too focused on today to bother with that vision thing. Some academics say Madison Avenue is so self-absorbed and myopic that it doesn't even care to see an analysis of data.

Dan Ariely, a professor of management science at the Media Lab, has studied online auctions, online dating, and the effects of deception in advertising. He says that agencies are driven by creatives who almost resent the scientific/research side.

"It's striking how much money goes into advertising and how little examination there is of the value of it," Ariely observes. "You could talk to any company you want, and they will say they can't really quantify it. It's funny that companies are becoming more and more obsessed with return on investment, but the same company can spend $1 billion in advertising without really evaluating it."

Moreover, Ariely thinks the problem is that agencies are unlikely to go against their gut instincts on whether an ad worked or not. He compares it to people who go out on first dates that don't work out, and rarely will give the person another chance. "If they have a gut intuition that something's not going to work out, it would be very hard to say, 'Why don't you invest in three more dates with a person you thought was an asshole to determine whether you're a good judge of character.' It's against human nature to doubt your ability and invest energy in the possibility that you might be wrong."

Laurence Minsky is on the marketing communications faculty at Columbia College in Chicago and has also spent 18 years working in the advertising business. Minsky says that the audience for most academics is other academics, while the audience for agencies is clients. Still, he thinks there's a lot of potential for crossover. The problem on the agency side, he says, is the focus on putting out today's fires.

"There's a lot of research that goes on in the agencies themselves, but it doesn't get used," Minsky says. "There's a lot of firefighting in this industry, and so you forget the big picture, so it doesn't get applied. People tend to focus on the most immediate [issues]."

And that's where academics could play a vital role, as a partner to agencies to keep them apprised of the bigger picture. Initiative's Koerner agrees that agencies often don't have the bandwidth to focus on larger issues because they're serving the day-to-day needs of clients. "It makes it hard to find the time to sit around and think about bigger issues, about the changing technologies and [consumer] behaviors." she says, adding, "It's great to have that resource always at your disposal in an academic relationship."

What's Right

Though it doesn't take much prodding to hear all the things that have soured between Madison Avenue and academia, there are some successful exceptions. For example, Tauder points out that the Media Lab did forewarn McCann that high-definition television wasn't going to require an immediate, expensive conversion of equipment.

"The Lab pointed out that it wasn't the high-resolution, high-definition screen that's significant, it's the digital delivery of the content," Tauder says. "It's a small point, but at the time everyone was touting that we should convert to HDTV standards to produce commercials, and HDTV cameras and studios. [The Media Lab] said, 'Hold on!' Based on what they were saying at that time, we started to focus on advanced television, rather than HDTV, and that was a big money-saver for us."

Also, there are examples of an industry pooling data and research. One is the PIMS (Profit Impact of Market Strategy) database, which began at General Electric in the '60s, and eventually accumulated data from hundreds of businesses to study the variation in profitability. Samuels recalls a conclusion that came out of studying those numbers and variables: The larger a product's market share, the more profitable the product is.

"That came out of PIMS, and for a while it shook up the industry," Samuels says. "In this day and age, with the attention to profitability and the bottom line, I don't know if this will happen again."

However, it is happening to some extent at the Marketing Science Institute (MSI) in Cambridge, Mass., set up in 1961 to serve as a bridge between businesses and academia. MSI actually took on the pims project in 1973 under the leadership of MSI executive director Robert Buzzell. Now, MSI initiates and disseminates research from about 100 universities to various member companies who help choose research topics.

Bill Moult was a past president of the msi from 2000 to 2002, and currently is at Sequent Partners. Moult says that advertising research was rarely on the agenda, though that might change. Currently, WPP Group and TNS Media Intelligence are among the MSI's member companies.

Outgoing executive director for the MSI Leigh McAlister told the group's board last April that teams of academics and practitioners were working on six priority topics: Ad response, brands and branding, customer management, the role of marketing, marketing metrics, and innovation. She told the group that the MSI is designed to pool the best marketing minds in academia and business to offer early access to leading-edge ideas, and shape research priorities-setting and the research process in general.

Sequent Partners' Spaeth says the msi has helped bring a fresh focus on return on investment and managing marketing metrics. Spaeth was involved with a MSI program that was sponsored by the American Association of Advertising Agencies (the 4As) on return on investment issues. "Truthfully, it could have delivered much more, but it did enlighten them quite a bit," he notes.

Even at the agency level, there are collaborations with academia that are working well. Russell Booth, chairman of Insight Partners, says that working with leading universities and professors is vital to his work in analytics and econometrics. "I think it's a win-win circumstance, so I don't know what the obstacles are," Booth says. "Academia can be a little sheltered from the real world, but I don't think [that's] that much of an obstacle. The win for us is to get the thoughts of people in academia, and they can gain real-world experience from us, whether it's the data or practice, so we both get something from it."

Another area that has seen advertiser interest is the nascent field of neuromarketing, where researchers study brain scans to understand reactions to advertising. There has been work done in neuromarketing at Emory University as well as the University of Florida. Though consumer groups were upset by the practice, concerned about mind control, academics see it as just another way to study human reaction to media.

Jon Morris is a professor in the advertising department at the University of Florida and also the director of AdSam, a private consulting firm that measures emotional response to advertising. Morris also is doing work with functional magnetic resonance imaging (FMRI) at Florida, though he doesn't see it as a silver bullet to gauging human emotion.

"The fmri project, which is strictly academic in nature, is supported by the 4As, and there was some funding that came out of that," Morris says. "That's a sign that there's interest in the industry to look to academics. I also read that geeks are popular now."

Gauging The Future So what are the potential solutions to the gaps that exist between Madison Avenue and academia? Agencies and their clients could pool their money and subcontract general research to universities that accept directed research. They could also strengthen ties to groups that are already focused on research, such as the 4As, the ARF, the Association of National Advertisers, and the MSI, and make sure that academics have a strong presence in those organizations.

The time is right for agencies to embrace emerging technologies and bring tech-savvy thinkers into their organizations at the highest levels. Agency leadership needs to understand the shifting mediascape so that change can be implemented throughout agency organizations.

"The importance of technology today to this business is very high," says Tauder, the former McCann executive. Agencies need to "think of technology as an enabler and as a means of outreach," and as a means to develop leaders "who have an interest in and aptitude for technology," Tauder adds.

Academics, too, have an opportunity to see their research make a difference in the real world, and could reach out more to industry with specialized conferences. MIT's Jenkins says that he had to work on the attitude in his department, which had a distaste for consumer capitalism. "Media studies has sought to remain largely outside the forces shaping the contemporary media industry," but, "Our own view is that it is better to have a seat at the table and to represent interests which may not normally be heard in conversations within the media industry."