• by Joe Mandese , March 5, 2009

Thank you, Nancy, for your kind introduction.  And[EF1]  welcome, everyone, to New Orleans and the 2009 American Association of Advertising Agencies Media Conference and Trade Show.

As[EF2]  you know, the theme of this year’s conference focuses on the consumer. As the title states, the consumer is watching[EF3] , listening, clicking and connecting.  And as we would all acknowledge, the consumer has more control than ever before. Technology has made sure of that.  DVRs[EF4] , online programming, mobile applications, video-on-demand, iPods, podcasts, gaming and all the other new channels of communications have given the consumerâ€"and by the way, let’s not forget that’s us tooâ€"the ability to watch what we want, when we want, either with or without commercial interruption.

So[EF5] , as I said, the consumer is in control and as a result “we are not.”

I[EF6]  also think something else is going on with consumers.  They are doing all those things mentioned in the conference’s titleâ€"watching[EF7] , listening, clicking and connecting.  But I believe there is another word ending in I[EF8] -N-G that should be included on that list.

The consumer is EXPECTING[EF9]  something, and I believe they are expecting something from us.  I believe they’re expecting us to be more innovative,  creative and imaginativethan we’ve ever been in our careers.  I[EF10]  think they want us to give them things they’ve never seen before, and to inform them of the things they need to know in ways they’ve never experienced before.  I think they’re expecting us to respect the way they receive and process information while still informing and entertaining them.  I think they’re expecting a lot from us.  And my friends, I’m here to tell you that we better deliver.

But how?  We[EF11]  all know the economic and business climate out there has been more than difficult.  I don’t have to tell you about the kind of year we’ve had and are now looking at.The headlines tell the story better than I can.  Bankruptcies[EF12] .  Bailouts.  Cutbacks. Layoffs.  Buyouts.  To hear some tell it, it’s the worst time since the Great Depression.  Maybe it is, I don’t know for sure.  I’m not an economist and I won’t pretend to understand the intricacies and complexities of market forces and political considerations that have gotten us to where we are today.  All I know is what all of you know.  It ain’t pretty out there.

So what are we to do?  Well ladies and gentlemen, at the risk of being labeled a Pollyanna, I think it’s time we start thinking seriously about how we can change lemons[EF13]  into lemonade.  We have to stop looking at what we can’t[EF14]  do and start thinking very seriously about what we CAN do.  We have to not only look for opportunity[EF15]  but we have to create opportunity.  And as far as I’m concerned the first thing we have to do is adjust[EF16]  our attitude.

Let me ask all of you a question.  I’m sure many if not most of you watched some or all of the inauguration of Barack[EF17]  Obama last January 20.  What I’d like to know is how you felt when you watched it.  It doesn’t matter if you voted for the man or not, or whether you’re a Republican or a Democrat.  I’m just wondering if you felt that amid all the bleak and dire economic news and all the reports about continued unemployment and hard times if you felt just a little ray of hope.  Did you feel just a smallâ€"or perhaps a significantâ€"jolt of optimism after Obama took the oath because you felt that at the very least, here was someone with new ideas, a new team, and that maybe, just maybe, we’re off to a fresh start and headed toward better times?

I know I felt that way and many people I know felt the same way.

Our[EF18]  industry doesn’t have a Barack Obama who can provide us with that kind of example or inspiration, at least not that I know of.  Who knows, perhaps some gifted, charismatic leader will materialize in the near future and help us out of this morass.  But I wouldn’t count on it, and that’s OK.  Why?  Because I think we can do it ourselves.

As[EF19]  I said, we need to get creative, we need to innovate, we need to use our imagination to address some of the sacred cows in our industry, and we need to provide strong leadership for our people.  We’ve been doing all these things to a degree, but now we need to step up our efforts.

We[EF20]  all know how media agencies and departments have changed over the past decade, since the dawn of unbundling.  We’ve tackled a lot of tough issues before and we’ve managed, somehow, to come up with some pretty innovative solutions. Let’s not forget, we started out as basically planners and buyers, but is there anyone out there who would call us by those names today?  Certainly we still practice those disciplines, and we do it very, very well.  But we are so very, very much more.  Over the years we’ve greatly expanded our portfolio of services to include everything from econometric modeling and analytics to mobile solutions and viral marketing, among many other cutting-edge offerings.And how did we get there?  By being smart and meeting challenges head-on, and by using our creativity and imaginations to create innovative solutions.

How[EF21]  about network integration fees?  They were a millstone around our necks and our clients’ necks, but we are finally well on the way to eliminating them. How did we do it? We tackled the problem and found a way to eliminate these obsolete fees.

What[EF22]  about all the changes we’ve weathered in upfront negotiations and ratings?  DVRs[EF23]  and the whole time-shifted viewing issue were major game changers that set the whole industry on our collective ear.  But[EF24]  we figured it out and emerged stronger with C3 ratings as our standardized currency of choice.

And there’s more being done so that we can be smarter[EF25] , more efficient, more effective, and deliver a better product to our clients.  For example, there are major efforts underway such as Project Reinvention that is first focusing on local broadcast and digital TV.

The goal of Project Reinventionâ€"which is being spearheaded by the Four A’sâ€"is[EF26]  to create a common language and set of common business practices across all media to achieve a degree of uniformity in how to buy and sell media. How will our buying teams deal with digital transition at the local level, with WNBC 4.1, 4.2, 4.3, etc. and the WNBC website all being sold together.  The focus should be on how the media business must reinvent itself to improve business practices that support handling of media transactions now and in the near future.

Media[EF27]  agencies and departments of all stripes are working in conjunction with the 4A’s to standardize business rules to set the stage for developing media platforms such as video[EF28] -on-demand, wireless, and mobile.  It’s a huge challenge, but we’re making progress because our efforts are fueled by innovation, creativity and imagination.

We’ve also established the CRC[EF29] â€"the Commercial Ratings Commissionâ€"under the auspices of the CAB and incorporating representatives of every single major organization, broadcaster, agency, trade organization, ratings company and service provider.  We hope it will do for the television industry what C-3 ratings did for the network TV business.  In both cases, the goal has been to establish a credible, accurate, and standardized commercial ratings system, a language, a set of definitionsand stakeholder processes that will serve as a standard going forward.

Let[EF30]  me take you back a few years.  Remember when we first started dabbling in content creation?  We took careful steps into this new arena and we ended up being pretty good at it.  We’ve moved steadily from cautious and careful product integration to bold and brassy branded entertainment, all being created by media agencies. How did we get there?  We had help, of course, from our collaboratorsâ€"the program producers and media companies’ sales organizations.  But mostly we did it through our owncreativity, innovation and imagination.

And it’s not just the media agencies who have displayed ingenuity and creativity in the face of adversity.  I think all of you will agree that our media partners continue to show remarkable creativity in offering us new programs and ideas.

On[EF31]  the television front, as all of you know NBC recently took the unusual and stunningly innovative step of announcing that Jay Leno would be given a show in the coveted 10 p.m. slot five nights a week, a slot usually reserved for scripted dramas.  Critics contend that the move was prompted by falling ratings and network TV economics.  And while that might be partially true, it remains an original and potentially game-changing move.  Here[EF32]  is what The New York Times said about the move:

“With one sweeping shift this week, the ailing NBCnetwork reordered the playing field of prime-time television… As a result, the very definition of prime time may be changing.”

Think about what that means.  Considering that $9 billion dollars was spent in the prime time upfront last year, I would venture to say that if the definition of that market is changing then it’s something we all better sit up and take notice of and make sure we are prepared to deal with accordingly.

In any event, creating change and developing innovation isn’t easy, to be sure.  And we might stumble sometimes along the way.  If we do, we can’t let that let that slow us down. We need to be prepared for all possible contingencies.

We also need resources to do it, and let’s face it; some[EF33]  of the resources we used to have just aren’t there anymore.

Clients[EF34]  are cutting budgets and money is tight, so we can’t count on getting too much help in that regard.  We have to use our own brains and we have to start putting square pegs into round holes.

The[EF35]  logical question, then, is where should we focus our energies?  It’s all well and good to say we need to be more innovative and creative, and do more with less, etcetera, etcetera, but how?  And where?  Here are a few ideas of how we might get started.

There[EF36]  are several issues facing our industry that I think are just waiting for solutions and innovations and are ripe for the taking.  Some of them we are already working on, but our level of involvement in others is minimal at best.  It’s time to step it up.

The issues I’m talking about include addressability[EF37]  and attendant functions such a frequency capping, segmentation and versioning, serialization or chaptering, telescoping, and how addressability enables all these capabilities.

Now one potential roadblock to those advancements is an issue I raised at last year’s Media Conference, namely privacy[EF38] .  At that time I said it was one of the issues keeping me up at night and I predicated that it would become an even bigger issue as we moved forward.  Well I got that one right, and if you’re keeping up with the latest, the FCC is totally on top of the issue.

But the good news is that they’ve endorsed the concept of industry[EF39]  self regulation.  They’ve also identified a set of criteria for self-regulation that must be met, and our industry’s organizations are now addressing this challenge.

As a result, the successful development of these agreed upon principles will allow us to move forward and incorporate more effective and efficient targeting into our communications arsenal.

There will come a day in the not too distant future that every form of communication will have addressability.  Every[EF40]  home -- and even every TV in every home â€" will have the ability to display different messages in the same pod.  We have addressability now on the web and we are about to have it in all media.

I believe there are untold opportunities for innovation for us in these arenas.  And the idea of opportunity is central to the message I want to deliver to you today.  We[EF41]  have to view the current crisis as an opportunity.

Earlier I mentioned how far media agencies have come in the area of content development, and specifically branded entertainment.   I believe this is an area in which we have the capability to really shine.  Just look at how far we’ve come in only a few short years.

SHOW VIDEO EXAMPLES FROM VARIOUS MEDIA AGENCIES ON SCREEN[EF42] 

How about that?  Those shining examples of creativity and innovation were brought to you by, in order, Initiative, MPG and Mindshare.  And as you all know, there’s a lot more where those came from.

This is the kind of innovation and creativity I’m talking about.  This is the kind of industry leadership that is needed.  This is the kind of stellar work that helps us demonstrate to our clients that we’re better suited than any of their other business partners to help them overcome the challenges posed by the current recession. And it’s not just in branded entertainment that we are excelling.  We’re also taking the lead in marketing[EF43]  sciences and analytics, consumer insights, tracking, addressability, commercial ratings and minute by minute ratings, communications integration and, oh yes, planning and buying.

Ladies[EF44]  and gentlemen, in the past few months I have attended seminars and lectures, read countless newspapers, and watched hours of television news and public affairs programming.  The overriding message from all these pundits is the dire straits we’re in.  The doom and gloom is pervasive.  I sometimes think that the wisest course of action is to get into bed, pull the covers over my head and wait for some apocalyptic event to right the ship.  But I know that that is the coward’s way out.

We[EF45] can make a difference, not by accepting the status quo, but by taking the lead in our industry and working innovatively, smartly, creatively, and confidently and by constantly moving the ball ahead.  We’ve done it before, and even though this climate is worse than others, I know we can do it again.

To briefly summarize, as I see it there are essentially two[EF46]  parallel roads we need to travel in order to help our own business and that of our clients.

For ourselves, we need to continue working on the initiatives I mentioned previously.  These include Project Reinvention, the Commercial Ratings Commission, addressability and self regulation on privacy.

For our clients we need to focus on bringing new levels of creativity and innovation to content development and other new services that were previously outside the traditional purview of media agencies.  Specifically, I’m talking about the kind of offerings that explore and exploit opportunities afforded by all media channels whether they be traditional, digital or mobile communications.

And on each of these roads we must remember[EF47]  to be bold, to lead, and to be willing to take chances.  In times like these, risk should not be avoidedâ€"it should be embraced.  We need to remember that advertising and media are fundamental and vital components of our economy.  We are an integral part of a marketing engine that can help kick start our national economy, and it’s incumbent upon us to do everything in our power to make that happen.

Finally, as anyone who knows me will readily tell you, poetry is not my strong suit.  Nevertheless[EF48] , I would like to leave you with a short verse from the 19^th-century British poet William Ernest Henley that I think lyrically and accurately describes our current situation.

The poem is entitled “Invictus” and here are its closing lines:

It[EF49]  matters not how straight the gate,

How charged with punishments the scroll,

I am the master of my fate,

I am the captain of my soul.

I[EF50]  believe that says it all.  Or, if you prefer a more succinct wrap-up, let me return again to Barack Obama and the message he delivered to our nation on election night in November.  It rings just as true for our industry as it does for our nation:

YES[EF51] , WE CAN.

Thank you.