The first in a 3-part interview of Stuart Elliott, Advertising Columnist at The New York Times, one of the most respected authorities on both online and offline advertising. His coverage of Madison Avenue and the advertising industry as a whole is sought after by major marketers and advertisers the world over. Stuart and I met for breakfast on April 3 (before the end of the war), and because he is normally the interviewer, not the interviewee, this was a rare opportunity to turn the tables on "the pundit's pundit" and ask Stuart for his views on what's happening in the media business. Here's what we talked about.
McHale: I thought we would begin talking about the war, because it's obviously new and the coverage is so different. I actually find it ironic that in the first week or two, the US military was talking about how proud they were, that they were able to connect with the Iraqi generals through their cell phones and email, and that, that was a breakthrough in communication...propaganda trying to convince the Iraqi guard to step down, or to not resist so hard. Clearly, we're using media vehicles in a way they've never been used before, so I wonder if there's going to be any learning from that once this is over and the dust clears. I wonder if you've had any thoughts about this.
Elliott: It's a little outside my purview, but certainly the NASA program gave us TANG, so I'm sure the war in Iraq will give us some fabulous, incredible new device. One of the things that was interesting was that a lot of this stuff is actually adapted from civilian gadgets and gizmos. The stuff actually started first in the general consumer economy and then was adapted for the military, so a lot of this stuff is already available to the people. It's already there, so I don't know whether the fact that it's used in the war is going to make any difference, in that a lot of this stuff is already available to the average person. I think, whatever those uses are, they're being figured out right now, back on the home front, rather than a lag 3 years from now.
McHale: You're right. I don't think it's the technology. What I find interesting though is the clients that we were servicing at my former agency were not using interactive media, so they weren't using mobile, they weren't using email and...
Elliott: But that was then...
McHale: That was a year ago.
Elliott: Well, I think everyone's up to speed now. Go back and visit those companies now. I bet you find a different story. I don't think they're that ignorant anymore, do you? I think there's been a big change. I think that's been accelerating for a while. Obviously, the dot-com bust was a catastrophic setback for interactive media, but I think people are seeing beyond that now, and they're figuring out all these different things, and that the idea is it fits in somewhere. I think, part of the problem was the belief that the interactive world was trying to make everyone do everything interactively, and get rid of every other kind of media they had in their media plan. I don't think that's an accurate perception, but somehow, I think that was the belief that was wide-spread among all these people and they just sort of pushed back. I think, that was the big issue, but I don't think anybody perceives it that way now, I think it's pretty clear that interactive is being offered as part of an overall marketing plan. I think in most cases, people are doing a mix.
McHale: I guess because I've seen so much money going into traditional media...
Elliott: Well, its always going to be that way, you're never going to have television replaced by interactive media.
McHale: No, but an increase in a war economy, or I should say in a fear economy...
Elliott: Right, but I think that's only natural, too. Ever since 9/11, broadcast network television has resurged. People are nervous and concerned, and in times like this they go back to the tried and true. Everybody predicted that the 30-second commercial would disappear and then suddenly, you've got one of the hottest upfront markets in history. That's because in times of uncertainty people go back to what they feel comfortable with. Also, it's more short-term oriented than other media. You put a commercial on Friends Thursday night, and people go see the movie on Friday night. Rightly or wrongly, that's the perception. And again, this idea that the interactive market is fighting for dollars with the other media, I don't know that that's entirely the right way to look at it. On that basis, you're never going to "win" because you'll have to go to the year 2300 before you'll see interactive budgets larger than traditional media, and by then, there will be 93 other media and interactive will be traditional. There's going to be a day when interactive media is going to be part of the traditional media. Because there will be 75 other things that we can't even think about right now that Bill Gates is cooking up, or somebody's cooking up in a lab and interactive media will be lumped in with the old media from the 20th century.
McHale: I wish I was bullish...
Elliott: I'm not bullish. I'm just realistic. I think there's a difference, and part of it is that the younger generation is moving up the ladder and every year several thousand people retire to Boca and several thousand kids replace them. That process will make for more of a comfort factor in the executive suites for the new media.
McHale: I agree, except that a couple of months ago, I did an analysis of a handful of consumer electronics companies, and looked at a number of companies who had just introduced their new campaigns, that they were positioning as integrated, but when you looked deeper into what the marketing program was, it was television, print and a website. So the web site was being perceived as the integrated program. Now surely there are marketing dollars that go into design, but when I look at advertising, I don't look at a website as advertising. I look at email and banners and rich media as advertising and I haven't seen a huge increase in those media. The truth is I feel a huge lag of innovation...
Elliott: Some of that might be appropriate! I mean, if you're trying to sell toothpaste, I don't see what benefit you might see from spending tens of millions of dollars on rich media for it. Most products in this country are still mass marketed. They might be niche to some degree, in that you run one ad in Rolling Stone and another in TV Guide, but they're still mass products. It would be a colossal waste of money and totally inefficient to change the media plan. For a video game, obviously, it's stupid to have the media plan be from the old days, but for a lot of products in this country - interactive media, the new media - is going to be complimentary or supplemental. The idea that suddenly everyone's supposed to throw their TV commercials out and print ads and do 5 billion dollars worth of screaming high tech media is, well, I don't think it's realistic. And you say they 'only had a website' -- in some cases I've seen people do the most incredible stuff on their websites now. You can spend 3 hours on each micro site of the website -- that sounds like enough; what else do you want them to do?
McHale: Right. Here's the thing. In my mind, the research community has never been a driver of innovation.
Elliott: Wasn't there a big thing recently about the [IAB] Cross media study? Well, what does that say? It said that new media ought to be part of your marketing arsenal. It didn't say replace everything you do with new media or interactive media, it didn't say that, it said it could be part of it, and yes, certainly you could make a case that there are a lot of old fogies out there, who are woefully behind the times, and that method will not penetrate their skulls, but 2 things will happen. One - they'll lose in the marketplace because they're not reaching the consumer in the best way possible. That will be figured out one way or another, and somebody will come in and notice that there's something missing from the mix, and that will be figured out as the missing ingredient, and someone will put it in. Or, the guy will get his gold watch and go down to Boca and then have somebody replacing him... I mean, you're going to have all these old, backward people replaced by young people who grew up with this stuff, so it's going to be second nature to them the way big broadcast network television is to some guy whose 60 years old right now. Time is on the side of the people advocating the new media.
McHale: And you see it here already now.
Elliott: Yeah, to some degree. The argument that it's not getting it's fair share, it's not getting it's due, well, magazines have been complaining about that ever since network television was invented. And sometimes they sit there and cry about it, and sometimes they get up off their duffs and do something about it, and sometimes people listen and sometimes they don't.
McHale: Do you see the media holding-companies being innovative as well?
Elliott: Well, all of them have interactive arms of one kind or another. People have different websites for their newspapers; Look at CNN.com. Their viewership is skyrocketing. Millions and millions of visitors every day during the war; people going to the sites to get the news.
McHale: How about the agencies?
Elliott: I think they're continuing to "move forward" but again, you've got a lot of resistance, because people are set in their ways and they're trained to do something in a certain way, and they don't know anything about this new medium, and suddenly everybody is knocking on the door and saying you have to include interactive, you have to replace everything with interactive, and again, human nature just enters the picture. But obviously that's changing. You've got every kind of consumer products company in the country doing something interactively, and maybe it's just a website, but they're doing something! And that's different than it was just very recently. And a lot of people are experimenting with a lot of stuff, like SMS, but how much money can you put into something that the American consumer so far has shown very little interest in? A) it doesn't necessary mean its going to be better and B) it doesn't mean people are going to adopt it.