• by Dana Blankenhorn , March 6, 2003

AAAA Day One – Keeping advertising on top of technology was a major focus of the AAAA conference in New Orleans, Louisiana yesterday.

Internet technologies like AdID and adXML will both be closely studied this year by the AAAA’s new task force on media verification, said Renetta McCann, chair of the AAAA media policy committee and CEO of Starcom Worldwide in Chicago.

But the bigger challenge will be getting on top of technologies, from Web broadband to TiVo to the telephone, where consumers are now resisting advertising.

“Never underestimate the fury of the American public when they get interrupted at dinner,” warned Dr. Robert Pepper, chief of plans and policy for the FCC. Consumers are embracing “do not call” lists and legislation against email spam. Regulators “will address what the average American household is upset about.”

Consumer behavior is changing rapidly, added Michael Turner, founder of the Information Policy Institute in New York, a technology think tank, who spoke alongside Pepper. Telephony is moving from the wired network to wireless, with copper seen mainly as a “last mile” solution for Internet broadband.

Between cable, telephone, cellular, and Internet broadband, consumers are now paying up to $3,000 per year for communications services they see as basic, said members of a panel following Pepper and Turner moderated by publisher Steve Forbes. Cutting that cost and extracting that value through advertising will be key issues.

“We’re where TV was in 1954,” said Forbes, and panelists agreed that means opportunity.

The problem is that in a world where consumers pay for access, they resist both advertising and specific charges for content, said Mark McLaughlin, president of FCBi in New York.

As a result, “The Internet is maturing as a consumer product, but it’s just being born as a marketing tool. Television is well understood as a marketing tool, but is on the cusp of outrageous change as a consumer product, with the 30 second TV ad heading toward a crisis of confidence.”

Tom Miller, managing director for RoperASW in New York, put this in perspective. “It’s going to be very difficult to make a lot of money on content, because we’ve educated consumers into believing content is free. And consumers’ sense of being annoyed at advertising on the Web is rising rapidly. It’s the leading source of annoyance across all media.”

The breakthroughs will come in compelling, interactive content and advertising, Miller added. Broadband gaming may be “the next killer app,” he said, and advertisers are succeeding with ads that deliver content, not just a pitch.

“Those doing the best job are creating value, after the click,” said G.M. O’Donnell, chairman and co-founder of Modem Media, such as “people distributing recipes to moms. Lexus is doing good stuff with distributed functionality, a mini-showroom. That’s how relationships start – you have to give value to get it.”

So despite the collapse of the dot-coms relationship marketing will be the key to breaking through consumer resistance, concluded McLaughlin. “Advertising becomes more powerful when those who respond are pulled into a long term relationship to maximize lifetime value.” That may sound very 1990s, but that’s still where the future of advertising is headed.