Starcom Mediavest Upfront To Include Online Media

In a keynote presentation to the iMedia summit in Scottsdale, Arizona, Jack Klues yesterday announced that Starcom MediaVest Group (SMG) is going to expand its 2003 television Upfront to include a network of broadband providers, including Atom Shockwave, Yahoo Platinum and Unicast. Across its two core USA companies-Starcom and MediaVest-SMG works with clients include McDonald's, Procter & Gamble, Coca-Cola, Kraft and Kellogg, many of which have recently declared that digital marketing is vital to the success of their brands.

According to Klues, chief executive officer of SMG, "the Upfront is considered an archaic process by many in our industry, but it still sees the greatest amount of media dollars invested. Expanding the process to include online networks brings smart opportunities for clients to distribute their television advertising over the Internet. With consumers spending an average of 60 minutes online every day, we see these providers as critical participants in the Upfront market."

During his presentation, Klues pointed to a number of statistics that support the inclusion of digital participants in the Upfront Market. He stated that nearly 20%t of U.S. homes have broadband and even more consumers have access to broadband connections at work. SMG through its IP unit has been using the Internet in a variety of ways and approaches which Klues showed at the summit. Including broadband video opportunities as part of the Upfront is just another opportunity to leverage the internet.

"Television continues to be the most visually engaging medium at our disposal," said Rishad Tobaccowala, president of SMG IP and member of the SMG board of directors. "And now that Internet technology supports television commercials with absolute creative fidelity, it lets us deliver compelling messages to keenly targeted audiences with unprecedented measurability. What's more, we can reach our key customers with total cost-efficiency."

SMG is defining "broadband network" as a mix of "appropriate sites that provide video streaming opportunities for 15- and 30-second commercials." The networks include, but are not limited to Atom Shockwave, Yahoo Platinum and ESPN. Utilization of these sites and the video streaming provided by traditional networks will enable Starcom and MediaVest to customize a variety of broadband network options for their respective clients. SMG will also be pulling together video streaming inventory from several sites based on our clients targets and creating customized networks and create a network of opportunities.

John Muszynski, chief broadcast investment officer of Starcom, explained his approach to dollar allocation, stating it will be "based on Client Objective, Client Target, R/F impact when combining broadband with other networks, Impact on cost per point and Lower TV Watching Quintiles. "Another vital component will be the ability of a resource to accommodate innovative ideas," he said.

"The Internet is a valuable communication platform where allocation of ad dollars (1-2% of spending) are disproportionately low compared to allocation of consumers' time (4 to 10%)," added Mel Berning, president, U.S. broadcast at MediaVest. "There are several reasons for this including until recently a lack of compelling ad opportunities for clients, very high prices and an inability to tap television budgets. Now compelling opportunities are here, prices for video streaming are relatively low compared to television advertising, and with a tight upfront clients may be open to re-allocate some dollars to compelling alternative."

It is not disclosed how big the digital investment will ultimately be. According to Klues, the opportunities will dictate the investment, and the spends will be very client-specific.

"There is no one-size-fits-all approach to investment," said Klues. "Our clients trust us to maximize their opportunities and generate the greatest return on their investments. We will seek strategically unique solutions for the clients we serve."

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