• by Wayne Friedman , June 13, 2007

SANTA MONICA, CALIF. -- For contextual advertising to work in new digital media, many tools need to work together. And some elements need to be dropped, according to panelists at a Digital Hollywood conference.

"We do a lot of buying for pre-rolls," said Jeremy Lockhorn, director of emerging media and video innovation for digital-media agency, Avenue A|Razorfish, who spoke at a contextual media and advertising panel. "And consumers are annoyed by them. Maybe there are alternatives, like running banners at the bottom of a video. If you get past this need to interrupt, you can get better response from them."

Yet even with the technical innovations of the Internet, there are creative challenges to master when it comes to targeting the right consumers. "I don't doubt the technology will get us where we need to be," said Tim Hanlon, senior vice president of content at Denuo, a unit of Publicis Groupe. But he noted that it assumes there is ample creative material to fill it.

NBC might have some of those answers. It is focusing its strategy on content.

"Our programming strategy is our advertising strategy," said Kevin McGurn, vice president of advertising for NBC Universal's nbc.com. "I think video is the next and best frontier. You are starting to see some scale. We're part of a News Corp.-NBC venture."

The panelist noted that issues surrounding user-generated content are tougher to solve when trying to monetize it with contextual advertising.

Keith Tomatore, vice president of sales development and operations at Washingtonpost.Newsweek Interactive, said user-generated content isn't new for the company. But it is crucial to get the right editorial staff involved. He said a former, older editor was slow to move into the new digital space, but a new younger editor has adjusted more quickly.

Another problem area is devising contextual advertising in a user-generated environment in which products and brands can be talked about negatively. That situation spells "complete uncertainty for advertisers and programmers," said Hanlon. "It is a very difficult thing for marketers to deal with. But the reality is, you have to deal with it."

Hanlon noted that some efforts are being made to weed through content for marketers. Feedburner.com, a media distribution and audience engagement services for blogs and RSS feeds, puts in "word" filters. If certain words pop up, advertisers aren't placed in that content.

As for advertising on mobile devices, the panel agreed this nascent business hasn't found its legs. "The advertising experience on mobile is pretty bad," said Tomatore. "It ends up being a small piece of the deal."

Added NBC's McGurn: "Mobile inherently has the best opportunity to local advertising. [Right now], it's incredibly difficult to get scale." Denuo's Hanlon agreed. He said the mobile phone could be "a conduit to other media. It's a virtual post-it note."