• by Tim McHale , May 1, 2003

The third in a 3-part interview with 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: One of the things the IAB and all of the online media properties are frustrated with is that we have essentially 1% of the advertising budgets being allocated for interactive, and the goal is to double that to 2%, and that's going to take some doing. In light of the amount of time that people use interactive media, it's not like there is a communication or quality issue that is comparable to make television and interactive media on the same level.

Elliott: But interactive is still young and there are lots and lots of questions... Is the banner the right thing to do? Is rich media the right thing to do? Are people at home or are they at work? If they're at work, can they play streaming video? I mean, my computer is set up so that I can't do a darn thing on it, ever... Or I'll get 7 spams a day. Or 'thank you for your inquiry of PayPal' when I've never inquired. So, there are still all of these issues about interactive media and I think, given all that, 1% is a lot. Plus, again, the baggage it carries around -- a lot of people personally invested in dot-com stock and they all got wiped out, and I think it gives everyone a negative perception about the whole interactive field. I don't think you can go before some marketing director and say to him "the interactive market will really help sell your widget," while all he can think about is that dot-com stock that he bought 3 years ago that he is wallpapering the den with now. I mean, it's not fair that personal issues will intercede, but I think that's something that you guys have to think about. Saying the word dot-com to people, brings that up.

McHale: I keep thinking that the fear economy is keeping interactive media on a very short leash.

Elliott: But on the flip side, the fear may lead people to try things that they wouldn't have tried when things are good, and they can just sort of coast on what they're doing now. If you make the case, that what they're doing now doesn't work, then they'll be more willing to try other things. The Hail Mary pass - that's always a choice then the clock is down to a few seconds and nothing else has worked, so you can flip that coin over and give interactive media more of any opportunity, by just the fact that people have to try new things now, because there's just so much pressure. Now you can say, because they're desperate they're going to go with the tried and true, which is one reason commercial time is so strong right now, but that's something that no one could have predicted. All the trade magazines have predicted the death of the 30-second commercial, meanwhile, everyone's going out and buying 30 second commercials like they're going out of style. Who would have thought that would be a development of the post 9/11 American media economy?

McHale: I think that's the irony...

Elliott: At that same time, I think that you've got plenty of people doing lots of innovative, different, unconventional, non-traditional things in traditional and untraditional media, I mean we've come a long way. I think the trend is toward more of that. Again, demographically, kids growing up now are completely comfortable with that. They don't read the paper except online, they buy things online, they do everything online. They date online, they hook up online. So, they're probably willing to look at ads online also. We just have to wait until they get to be over the age of 9, that's all. Past the point where they have to ask their parents to use their charge card. So I know it's hard to tell you to wait 9 more years, but...

McHale: I don't think it's going to be nine more years but I do think it's going to be another 2-3 years before we see that tipping point where interactive isn't a dirty word.

Elliott: It's not a dirty word for anybody!

McHale: But you said when people hear the word dot.com...

Elliott: Look I'm just exaggerating for effect to make a point. Again, part of it has to do with the idea that you had a brief shining moment. You had a Camelot where you thought that interactive was going to be 60% of the media spend, because it was racing ahead so fast. Remember those Jupiter numbers? 1% this year, 2% next year, 4%, 8%, 16%. Everyone thought the numbers would get bigger, progressively bigger, always double and triple and... That's part of it too, the frustration that interactive was going to be "The New Frontier," and it turns out to be it's one state and not the entire golden West. It's like Utah. It's Wyoming. It's one out of 50 states. Maybe that's better than not being a state at all I suppose, but...

McHale: No, you're right. It's just that the average usage of the web media is in excess of 10%...

Elliott: That's true, but so if they go on CNN.com and they look up some sports scores, does that make it an effective medium for advertising? Maybe yes and maybe no. I mean, just because people are using the medium, doesn't necessarily mean that A) you should advertise on it, B) that its right and C) that its going to work. It's like you're connecting a lot of dots, and I don't know if you can draw a straight line between them or not.

McHale: Well, again, I just keep going back to the percent, because when you see Gen Y... I see it as a generational thing.

Elliott: Part of that also is, are they [Gen Y] not using the other media? Are they ignoring it more, or are they going to TV, or are they using them all together? You know a certain percent of people watch the Super Bowl online during the game - whether they were looking at the plays, details, versions of camera angles, or they were emailing their friends - or whatever they were doing. I mean, you have a certain percent of people doing that, so maybe usage figures will explode in conjunction with another media, in which case, where do you put your ad? You know, if people are going to be online while they are watching TV, maybe you should just run a TV commercial, you know, with a semi-interactive TV spot, in which case, who counts that? Do the TV people pick that up in their numbers or do you?

McHale: Right. Well, you know, my beef with media [planning] is more of a personal beef with this industry, in that I got into the advertising business, specifically on the media planning side of the equation, because I saw it sort of as a meritocracy in that if you...

Elliott: Oh, you impetuous idealistic youth, you...

McHale: And so, of course, I moved on from traditional media into interactive because I saw that was the next element to me to stay contemporary, to be on the cutting edge, to help myself and to help my clients, and now what I see is an industry has become extremely lethargic, and that the vested interests are working very closely to keep innovation at an all time low...

Elliott: You know, I don't know if I necessarily agree with that. I don't think that's the case. I think there's a couple of steps forward and a couple of steps backward, but that's true of everybody. You know, people in TV are still miserable and complaining that they can't measure it right. Every new week there's a study from ESPN or somebody like that trying to prove that so much of the audience is still unmeasured, and that running a spot on ESPN you get millions of additional viewers that you can't count! We can't figure out a way to count... I mean, here they are still ringing their hands about TV 50 years later.

McHale: I think they have a legitimate beef.

Elliott: Okay, well, you may have a legitimate beef, too, but that doesn't mean it's going to be easy. There may never be a way to figure that out.

McHale: Except that, I see this huge consolidation of agencies and media companies who say, 'hey listen, why rock the boat, we all have to justify our numbers, why change the media plan?'

Elliott: I don't think that's true at all. Certainly in some cases, that's possibly true, but I don't think you can generalize and say that there's an industry-wide consensus to do things the old way and never look at anything new.

McHale: Well I don't think it's industry-wide, but...

Elliott: ...And stomp on industry innovators until they go away or pass out or whatever.

McHale: I'm holding my breath (laughing)...

Elliott: I don't think you can say that. Interactive has come a long way, considering, in the short time it's been here. And again, I think the frustration has been built in, because A.) how fast it was growing, and B.) how much potential it seemed to have during those wacky times. It's like bootleggers, retired bootleggers sitting around in the 30's and saying, 'Boy, you know, every year during the roaring 20's our business went up 50%, every single year. Wow, those were the days; that was wonderful.' Well, you know, its legal again, alcohol, you can't boot leg it anymore. They had to do other things.

McHale: Let's talk about the next big medium, the telephone. We now have telemarketing going...customer service...

Elliott: You mean the guys who interrupt your dinner? That's quite a medium. I know I'd certainly want to be associated with that (laughing)...

McHale: You know, you have interactive media flowing through it, you have mobile communications, and of course you have CSR galore where you have people doing either telemarketing or companies growing their customer service banks, in anticipation of being able to satisfy consumer complaints or queries in a more de-personalized way and a more efficient way. How does a marketer stay above the fray of depersonalization?

Elliott: I don't think its depersonalization; I think it's more personalization. I mean you're targeting people on their telephone, that's more personalized than... isn't it, am I misunderstanding?

McHale: Well, that's true absolutely in that regard, but you're getting calls from all these people that you don't know, I mean...

Elliott: Yeah, but you can get caller ID and block them out. I have a friend who, when he gets those calls, he says, "Oh yes, just hold on one minute." Then he takes the phone into the bathroom and gives them the Big Flush! and then he listens in on the other phone to hear how long it takes until they realize that they're getting the Big Flush. Sometimes they have to be flushed a second time before they realize they've been had. Any medium that does that... I don't know what to tell you. It's probably the medium that is in its own realm, at the moment.

McHale: Do you see it as a...

Elliott: I don't have any idea! Just look at everyone in Europe and Asia running around, using their thumbs on those little phones, to do stuff, to get messages and... wasn't it Coca Cola that launched some product in Singapore or something, some kind of a beverage that was done completely by text messaging? So, I don't know, it's a fascinating thing, it's going to be interesting to watch, but I don't have a clue as to whether it's going to take off or not. If I knew the answers to this stuff, I wouldn't be doing what I'm doing now. I'd be somewhere where I'd be making this happen. That's what they say about journalists....

McHale: Last year we talked about CRM and privacy and the blurring of the line. You know, Minority Report, qualifies it well. Who owns your retina? I think the telemarketing business is the most apparent of "the new intrusion," and then there's the movie theatre frustration. And yet, of course, my job as media planner is to push on and find a new opportunity where there is less clutter and more opportunity to break through.

Elliott: You think that at some point when you get all this pushback from people, you think that people would get the hint and say "maybe this isn't it?" but they're moving ahead with it anyway despite all the negative responses from consumers.

McHale: But the same argument applies with pop-ups, which, of course, have been a frustration for many people in interactive media.

Elliott: If you make consumers angry, you shouldn't be doing it.

McHale: But then the numbers show that it works.

Elliott: Well, it's like people say, they hate those annoying TV commercials, but they bought Charmin to beat the band. What people say and what they do is often two different things. You know, nobody is going to admit they bought something because of an ad. That's still true, it'll probably be true in the 23rd century where your retinas have seen the ads, those Minority Report-type ads: "Hello there, those blue shoes you bought at The Gap are on sale again today, would you like me to order you a pair?" And the customer goes, "oh no, I'm not buying these blue shoes because the little box in my retina told me they're on sale." No, of course not!

McHale: So in light of this war, do you see advertising continuing to be innovative? How would Yankelovich quantify what the advertising messaging look like and what is appealing to consumers in the year 2003 and 2004?

Elliott: I don't have any idea! What ever is happening is still happening. Trends are continuing because consumer attention span is shorter; they're bombarded by more stuff, their lives are busy, there's a war on -- maybe what brand turkey they're buying is not the most important thing on their minds, but it probably never was. I mean, there may have been a time briefly after WWII when all these new products seemed new and wonderful and exciting. But for 20 years before, people didn't have any money, and then there was WWII - and suddenly it's the glory days, cars with tail fins and cake mixes and the suburbs and TV dinners. Maybe that was when people actually stood in the aisle of the supermarket for 5 minutes and decided whether they wanted Tide or Rinso, or a detergent with bleach or a detergent with a scent or whatever, but I think those days are over. That doesn't mean that people are not interested in what products they buy, they still want the product that meets their needs or they think meets their needs. So, there's still an opportunity there for people to sell things. It's just going to be more of a challenge.

McHale: Last question. Are you still having fun? Is the advertising business still fun these days? Or is it unpatriotic to be having fun?

Elliott: Well no, all the surveys say that people say that advertising is a sign of normality and they want to see it. I think that's the difference. You know, the difference between the last Gulf War and this - is September 11th in between. I think, now when people don't see any ads it makes them nervous, because it makes them think of September 11th and also, I think the war's progress... well, we've written about the progress. The way the war has unfolded; the fact that the major TV networks are not doing continuous wall-to-wall coverage has meant, by definition, there is opportunity to run commercials. It might not be the normal commercial load, but there are still commercials, either they cut away to normal programming, or some of them are devoting their news magazine shows to the war, and then there are commercial breaks, or they're running an hour-long version of their nightly news, and there are commercial breaks. And maybe, you know, there are fewer breaks than there would normally be, and 2 spots in each pod and some advertisers don't want to be in there, or they're going to have a clause thing, "I don't want to be the first ad coming out of a break." But even CNN I think is running at half their normal commercial load. I think, people thought, well, "if they're going to be fighting a war, there aren't going to be any commercials until the war is over." That's not the case. I think, again, one of the differences in this survey shows that... I mean, obviously, if there is news to the level that you won't run regular programming, then obviously people would accept that, but short of some major change in the news and if, like Britain... if the fight for Baghdad begins and if you have the ability to show that live on television, you probably will go back to continuous coverage and there won't be any commercials, and rightly so because people want to see the news; they don't want to see the commercials.

McHale: I heard that non-war programming ratings have actually increased.

Elliott: I don't know, the NCAA didn't do as well. The Oscars of course were down to a record low. I think American Idol was up and Survivor was down, but part of that was the fact that Survivor was on Wednesday instead of Thursday. Movie box office was down, but part of that may be a year ago there were certain big movies that were out that skewed the results, so I think generally speaking I think there's a lot more "normal activity" now than people thought there would be, but all this could be out of date by the time this thing runs too based on whether the war was over in a week or not...

McHale: "Normal activity"... something to think about... Thank you Stuart!

If you missed Part I, or Part II, you'll find them here.