Aiming to streamline its ad sales, Microsoft Corp. is launching a new division, Microsoft Digital Advertising Solutions, that will allow marketers to purchase ad inventory across all of the company's various properties--including MSN, the adCenter paid search platform, PCs, Xbox Live, and Web-enabled mobile phones--from one sales rep. The company is aiming to help advertisers save time and effort when buying across multiple media in an increasingly fragmented marketplace, according to Joanne Bradford, corporate vice president of global sales and marketing. "We're addressing the reality of media fragmentation and enabling advertisers to get back to what they do best: creating engaging and creative ads," she said in a statement. The group also will handle sales into Windows Live, Office Online, and Windows Mobile, as well as through Massive Incorporated, a video game ad network that Microsoft purchased in April. Microsoft says its MSN properties garner 465 million visitors worldwide. The consolidation should make it easier for media planners to make their buys across any Microsoft property, a spokesman for the software giant said. "It's pulling all the assets together, so that instead of having one account executive that sells Massive, and one that sells MSN and one that sells adCenter, you'll have a single AE [account executive] that sells everything," he said.
Yahoo last week stunned Wall Street with the announcement that it was seeing softness in auto and financial services ad sales--yet overall, the Internet is poised to claim 6 percent of all ad dollars this year, according to a new online ad forecast by eMarketer. That's one of the key findings that eMarketer CEO Geoff Ramsey will present today at MediaPost's OMMA Conference & Expo in New York City. Ramsey, who serves as emcee of the conference, intends to delve into several emerging trends, ranging from the growing interest in online video to the use--and possible overuse--of blogs for marketing purposes. He also will unveil eMarketer's recent online ad spending projections, revised last week in light of Yahoo's report of slowing ad growth. This morning's opening keynote speaker, Rishad Tobaccowala, CEO of Publicis Groupe's Denuo, intends to address the dizzying pace at which the Web continues to evolve. While most interactive media planners today have Google, YouTube, and MySpace on the radar, "two of them didn't even exist three years ago and one of them hadn't appeared in its current role," says Tobaccowala. "What sort of plan would we have had three years ago?" he asks. Ross Levinsohn, president of Fox Interactive Media, will deliver a second morning keynote address, titled "So, the New Content Models Have Taken Over. What Happens Next?" Immediately following his speech, Levinsohn and Tobaccowala will participate in a panel discussion addressing whether the speed of change spurred by the Web makes media planning a futile exercise. Joining them will be Joe Marchese, head of the Online Media Practice Group at Bainbridge, Inc., a research and management strategy consultancy, and Carl Fremont, executive vice president and global media director, Digitas. MediaPost Editor-in-Chief Joe Mandese will moderate. Can media companies evolve fast enough? This afternoon, Beth Comstock, president, Digital Media and Market Development at NBC Universal; Jim Bankoff, executive vice president, product and programming at AOL; Patrick Keane, head of sales strategy at Google; Larry Kramer, president, CBS Digital Media; and Jeff Karish, head of strategy at Yahoo Media Group will discuss whether media companies can embrace digital disciplines and emerging business models quickly enough to appeal to consumers. Vanity Fair media columnist Michael Wolff will moderate. "We may be talking about a transformation in which one industry is going into a twilight period of obsolescence and a new industry is replacing it. They will transform or deconstruct," Wolff says. He adds that the declining quality of media might be propelling consumers to explore and experiment with new platforms and content. "It all sucks," says Wolff. "Movies suck, TV sucks, books suck. That's enabled a new kind of anti-content context to be created." Emerging online models threaten ad business Tuesday morning, Tim Kopp, vice president of worldwide interactive marketing for Coca-Cola, and Rex Briggs, founder and CEO of Marketing Evolution, will share a keynote address titled "Can the Marriage of Advertising and Marketing be Saved?" Kopp and Briggs will then take part in a panel discussion addressing ways in which online content models are threatening to destroy the ad business. Joining them on the panel are Stephanie Bittner, director of brand advertising and communications, Starbucks, and James Mahoney, director of media and brand advertising, Capital One. Lydia Loizides, vice president and Director, Media and Technology Experience Analytics for The Consumer Experience Practice at Interpublic Media, will moderate. Tuesday afternoon, Crispin Porter + Bogusky chairman Chuck Porter will deliver the keynote address, "Creative: It Ain't What it Used to Be." Porter will address key challenges facing advertising creatives--among them, the emergence of consumer control over media. Ads once lauded for their ability to interrupt and compel consumers are now panned as intrusive, rude, even unacceptable. How then can advertisers hope to engage consumers who shun content that strikes them as inauthentic? Porter will be joined by Ty Montague, chief creative officer and co-president, JWT New York; Simon Needham, co-founder and group creative director, Attik; and Tony Granger, chief creative officer, Saatchi & Saatchi. Gregory Wilson, CEO, Red Ball Tiger, will moderate the creative panel.
If people find social sites like MySpace and online role-playing games engrossing now, just wait. By 2020, people will spend more time online in connected, virtual worlds that will boost productivity but may lead to addiction problems. That's among the findings of a new study by the Pew Internet & American Life Project that asked Internet leaders, futurists and others how the Internet would affect life by the year 2020. Overall, the survey found that technological advances will make the Internet a universal benefit for most--but not without creating some major problems along the way. While the report doesn't directly address the digital media landscape in 2020, it does suggest that a more immersive media experience lies ahead. More than half the respondents surveyed believe those with the means will indulge in "increasingly sophisticated, networked synthetic worlds for work and entertainment." That could lead to addiction problems for some who lose themselves in alternate realities. Some respondents expressed the view that immersion in virtual reality had already begun with today's massively multi-player games online, synthetic worlds like Second Life, and even online chats. "I'm not sure if 'addiction' is the right word, but the shift of people's attention to online information, media, entertainment and communities will erode culture and bring into being a colder if more efficient world," wrote panelist and independent writer and consultant Nick Carr. Others were more optimistic, drawing comparisons to earlier media innovations that initially raised concerns. Futurist Paul Saffo noted that fears that kids could spend too much time with paperbacks, TV and movies have now been transferred to the Web and video games. "I will bet that in 2020, parents will be lecturing their children that they can't go out and play until they finish their VR-based simulation games," he wrote in the study. The Pew study also found there will be little expectation of personal privacy online by 2020 as government and corporations increasingly "own" access to information. A number of Internet media and technology leaders were skeptical about the benefits of more private and public information being available online. Panelist Esther Dyson, editor-at-large of CNET, for instance, noted: "The world is not average, and the benefits and costs will not be evenly distributed." The Pew survey was conducted online in late 2005 and early 2006, and included the views of 742 respondents from prominent figures in science, technology, business and politics. Among the group were venture investor and analyst Stewart Alsop; Michael Botein of New York Law School's Media Center; Boing Boing blogger Cory Doctorow; "Smart Mobs" author Howard Rheingold; and University of California-Berkeley professor and Google consultant Hal Varian.
Aiming to boost its online properties, Viacom's MTV Networks has agreed to purchase Harmonix, the video game development house responsible for the popular "Guitar Hero," for $175 million. MTV intends to incorporate features of Harmonix's break-out hit "Guitar Hero," as well as the popular game "Karaoke Revolution," into MTV Web sites--which will, for the first time, allow users to play online versions of these games. "Guitar Hero" lets gamers play out their rock star fantasies, even providing a full-sized guitar-shaped controller, while "Karaoke Revolution" transforms a gaming console into a karaoke machine. MTV also will develop game content based on classic songs. "Guitar Hero," which appeals to a wide range of demographic groups, is a significant acquisition for MTV, said eMarketer analyst James Belcher. "'Guitar Hero' has been a big deal and is growing," he said. "It's not just for one age group; you can get songs that would appeal to a range of people." While Harmonix is a relatively niche publisher, focused entirely on music-based games, its acquisition by Viacom signals that the company is focused on participating in the video game market, Belcher said. "It's not just this one-off property," he said. "This says they want to stay serious about games." Last month, MTV Networks said it had agreed to pay $200 million for Atom Entertainment, which owns four major units, including gaming sites Shockwave.com and AddictingGames.com.
AOL is replacing its main business units with smaller groups, giving greater autonomy to product managers as the Internet company shifts to an advertising-based business model. In changes outlined in an internal memo last week by CEO Jonathan Miller, AOL will reorganize its four existing business units, including ones for access, AOL Europe and audience. "Starting last month our whole company became an 'audience business," wrote Miller. Last month, AOL decided to abandon its subscription service in favor of a mostly free ad-supported business to better compete with big Internet media players such as Yahoo and MSN. AOL's reorganization, which will take effect in January, is the first significant restructuring the company has undertaken since November 2004, when it began making some content available for free. Last week, Ted Leonsis, who heads the audience unit, announced his plans to give up day-to-day management responsibilities in January but remain as AOL vice chairman. At least three key executives who reported to Leonsis will now report to Miller, including Kevin Conroy, Jim Bankoff and Mike Kelly. Joe Redling, who heads the access unit, will instead oversee AOL's international business, mobile services and relationships with free and paying customers. Miller called mobile a platform that "over time, will be as important as the PC." He also said that mobile product development would be centralized within AOL for now to make more rapid progress. AOL will also announce its first chief privacy officer after recently disclosing the Internet searches of more than 650,000 subscribers. It will also name a new general counsel this week.
There was widespread rioting across the Middle East following the Fox announcement that it would produce as many as a dozen films a year aimed at Christian audiences under a banner called Fox Faith. But, it was difficult for observers to determine if the Fox riots were simply a continuation of the papal riots, which were preceded by the No-Bunkers-Around-Baghdad riots. "I'm exhausted," said one holy warrior. "These days of anger seem to go on forever. I've been rioting, shooting up the neighborhood for months. Seems like every week somebody pisses off the defenders of the faith, and we have to make up new placards and banners and head back out into that 105-degree heat to burn somebody else's effigy until the Western media gets some footage for the evening news. Sometime we have to riot for hours before they get off their satanic butts and take our pictures." "I don't know what we'd do if we didn't have those anti-Western riots on a regular basis," said a producer for CNN who wished to remain anonymous because she isn't a cute blonde like the rest of the staff. "Television is all about pictures, and without them we have no story. Once in a while, the weather's bad or they run out of excuses to riot and we don't have our daily footage. That's when we report, 'There was no rioting in the Middle East today--unlike last week,' and then we show last week's riot footage." The persistent rioting has provided a new business opportunity for Ali Mohammed of Najaf, who launched Rioters-R-Us, which employs hundreds of former high school and college students to stage disturbances across Iraq. "The average guy simply doesn't have the time to paint his face and beat himself with a whip. He's got to make car bombs or prep for nighttime attacks on the oil pipelines. He's too busy to stay current on what we're supposed to be outraged by on any given day, so we take the pressure off by providing turnkey riot solutions," says Mr. Ali (or Mr. Mohammed, whichever). "Just tell us what the West has done wrong today, and in less than four hours our men can be on the street with the correct signage and chants. We have a staff writer who does nothing but come up with slogans and chants that rhyme with 'hate America'!" Business for Rioters-R-Us was up 175 percent in the third quarter, and bookings are strong through the end of the year. "You can just feel the tension, the pent-up demand for street violence," says Mr. Ali (or Mr. Mohammed, whichever). "Even though they can't predict it, our customers are certain that somebody, somewhere in the West will do or say or write something that requires a riot. These days it doesn't take much of a spark to start a conflagration around here. I mean who really cares what Fox runs? Clearly they don't, what with "Nip/Tuck," "Temptation Island" and "The Simpsons." But, throw Jesus in the mix and now we're talkin' holy war." "Face it, we have the West hogtied," said Suhrgay RachMan eNoff, assistant vice president, Barricades and Flag Burnings at Rioters-R-Us. "They are so paralyzed with fear that we have been able to shut down all debate and productive dialogue about Islam. To be able to intimidate people with backyard swimming pools, plasmas TVs, SUVs and dental plans, is an aphrodisiac to people with nothing but time on their hands. "Besides, it's good for business."
The recent SES Conference in San Jose included a panel called "Meet the Search Ad Networks." The panelists seemed to have broad ideas about the identity of their ad networks, which is likely why Emily White of Google recommended that the panel simply be called "Meet the Ad Networks," citing the increasing number of media (including radio, print, etc.) and advertisement types distributed by the companies represented on the panel. To the dismay of Danny Sullivan, the panel's moderator, who understandably wanted to keep the conversation search-focused, each of the panelists in turn took the opportunity to briefly address the ability of these ad networks to distribute brand advertisements across publishers/content. Although it is clearly the goal of Microsoft, Yahoo and Google to become one-stop shops for advertisers and it is absolutely the goal of brand advertisers to find new channels to garner some of the consumer attention that is increasingly directed online and to the infamous long tail/user-generated content, it doesn't mean they are the answers to each other's problems... just yet. Brand advertising does not fit into the current ad distribution models, but requires something different. Let's look at why: Relevancy vs. Targeting First and foremost is the issue of targeting versus relevancy. When an audience member asked if Google would continue to provide highly targeted advertising opportunities over the new mediums served, the response was: "Targeting has always been, and will continue to be, a basic tenet for Google." We all know that targeting is important, but the core of what Google provides is relevancy--namely, relevancy of search results and relevancy of advertisements. There are infinite reasons why Google has been successful, but the most basic is that it has always focused first on relevancy. This has allowed the company to capitalize on the concept that ads are actually part of the content, not simply a negative externality. Ads served with search results on Google are in some cases more valuable to the searcher than organic results. Ads served by Google on a publisher's Web page add value to the publisher's content through relevancy. What exactly does relevancy mean? It means that value is added to all members of the advertising ecosystem. The user receives value, the publisher receives value, and ultimately, the advertiser receives value--although none of them have complete control over the process. The question remains; how can you apply this to brand advertisements? The proposed distribution methods for brand advertisements across vast publisher networks revolve mostly around site targeting and demographic targeting. This is because contextual relevancy/distribution does not apply to brand advertisements in the same way that it applies to transactional advertisements. Targeting has a number of problems, including the fact that site targeting isn't scalable. Brand advertisers have a difficult enough time negotiating buys across the current television landscape (hundreds of channels)--let alone across the seemingly infinite spectrum within the long tail of content online. They are now experimenting with eBay to create a more efficient market for buying ads across those hundreds of television channels. Online, we must also consider the motivations of the content creators and how often the content changes. For these reasons (and countless others), let's assume that site targeting isn't the end game. Demographic targeting, which aggregates information about who the content reaches and allows advertisers to target based on desired demographic reach for their brand campaign, isn't the end game either. Why not? Television does it this way, right? Wrong. Ads on television are 30-second spots between content. Ads online are part of the content. Even more so than on television, online page content "bleeds" onto the brand ad, and in turn the content of the brand ad "bleeds" onto the page. Allowing the advertiser to target gives too much and not enough control at the same time. It says "forget if this is going to add to or detract from the user experience.." In short, it is not based on relevancy. This is not how Google has done business, in the past and it would be a mistake for it to do so going forward. On the "not enough control" side, demographic targeting does not say to brand advertisers that the images, sounds, art or even text put together by the site to convey an image will enhance/amplify the brand's image--only that the audience of the page is the audience they would like to enhance/amplify their brand to. Creating one market for distribution of transactional and brand advertisements The idea is that there is one pool of inventory where ads (whether brand or transactional or some other form) can be displayed, so there needs to be one market for bidding on this inventory. The problem is that while the search companies can use their massive amounts of data to estimate an acceptable CPM bid based on what a CPC ad might generate in the same location, the value of the two cannot be measured in the same way, and in many cases would represent very different uses of publisher inventory. What is needed is a separate market for brand advertisers that determines the market value for brand advertisement distribution within image-enhancing content reaching particular demographics. The two markets could then be combined to determine the most efficient combination of distribution/placement of brand and transactional advertisements across publisher networks. There is a lot more to this idea with regard to optimal combinations of CPC and CPM, as well as determining measurability of effectiveness, but we can go into that at another time. Intentions of Long Tail Content Creators The intentions of those who create long tail content, especially social content, are not the same as the intentions of a studio creating content. Studios consider possible audiences and advertisers when creating content, because they know they have to/want to monetize the content. This is very different from the generation of long tail of content, which almost never considers advertisers when deciding what content to publish, at least in a traditional media sense.. So... So what is the missing link between the brand advertiser's needto increase reach online, television's reach/ad value being increasingly compromised, and search ad networks' desire to attract these brand advertisers' online budgets? The link is a whole new system for determining relevancy of brand advertisements--a system that will create a market for brand advertisements and facilitate the rethinking of the advertising ecosystem, taking into account brand advertisement goals as well as the intentions of the ecosystem's participants and their effects on a market for brand advertisements. And what does that look like? I might have some ideas. Stay tuned for further installments.