• by Joe Mandese  @mp_joemandese, March 26, 2004

On Thursday, Publicis' Optimedia unit unveiled a new Emerging Technologies Division and named veteran TV buyer Bob Flood to run it. Unlike similar units at other media shops, Flood's team isn't just about R&D. It controls hundreds of millions in national TV advertising budgets that can be used to make many of the most conceptual new TV advertising applications real from an advertising marketplace point of view. Flood, who already carried the title of executive vice president-director of national electronic media, previously worked on a number of pioneering electronic media ad platforms, including BMW Films, a case study in cross-media platform deals utilizing the Web and offline media, as well as a variety of video-on-demand projects. He also formed the first ever "virtual channel" on DirecTV, carving a new national advertising opportunity out of a footprint others had ignored. In the following Q&A with MediaPost editor Joe Mandese, Flood lays out some of his vision for the new new of emerging media technologies.

MediaDailyNews: Other media shops have created emerging media units. What's different about Optimedia's?

Bob Flood: Our approach is about gaining access to the peripheral assets of the big media conglomerates to develop a deeper and more meaningful way of connecting to our clients' contacts. The idea is to leverage our media commitments and the creativity we bring to the table to build new partnerships with the media. We can also be a lever to promote their programming or platforms. But a lot of the things we will be doing haven't been done and haven't even been conceived of yet. The whole premise of this division is to explore new ad applications that haven't been done before. We'll actually be exploring and defining what the future of advertising communications will be.

MDN: One the things that is unique about your department, is that it is part of your national broadcast buying department, which means that unlike a lot of other emerging media units, your's has real advertising budgets to work with. So, in a way, you have the ability to make some of these theoretical media things real.

Flood: That is a definite distinction that we have. We have direct access to clients and we help control their budget directly. And because we cover the whole spectrum of television, I have the luxury of seeing how all the pieces connect together. I'm not just having conversations with one network at a time. We're talking to everyone simultaneously. We're talking with the ABC Unlimited individuals, the Viacom Plus people and the like and we're exploring how they can extend our presence on all of their platforms, whether it is online or interactive TV.

MDN: Structurally, do you have control of online, as well?

Flood: Not exclusively, but I have under my purview the online assets of traditional media. If we're doing a deal with ESPN, we have the conversations about ESPN.com. The same thing for Weather.com, CNN.com, etc. We think this is a better approach, because it's part of an integrated view of these company's media assets. To not have that dialogue throughout the entire circle of communications means you're missing an opportunity. If you're sponsoring an event, it should live on all the platforms a network has to offer. It's the most effective way to negotiate with a network. The more vested they are with our clients, the more amenable they are with our clients and put all their resources against it. The vendors also have a vested interest in making sure these deals work, because if they do, well now they have a case study they can use to sell others.

MDN: Earlier, you said that you're leveraging your clients to help promote the content or platforms of your media partners. Can you give an example of how that might work?

Flood: Take VOD (video-on-demand) as an example. VOD still has a relatively low awareness among many cable subscribers. If we're sponsoring a VOD event and our clients can help promote the technology and the content that's on it in a way that makes cable subscriber more familiar with it, then that's a benefit to the cable operators. These are uncharted waters, but basically we would expect some reciprocal value in terms of having the MSO in their local avails promoting the event say something like, T-Mobile, in association with Comcast or Time Warner, presents this event. The advertiser is going to benefit because they're getting impressions and exposure. The operator is going to benefit because we'll be promoting their content and their platform. And all the parts are contributing to the overall presence of the event itself.

MDN: Where do you think this is going?

Flood: If we continue to see the kind of media inflation we've been seeing on network, I can see a point where, from a national perspective, people may begin to approach MSOs individually. If you look at the footprint of a Comcast with 21 million subscribers and a Time Warner with 11 million subscribers, and you put together your own network, if you will, you can start to generate some significant critical mass and in a much shorter time frame than going to them individually.

MDN: But what about the relatively higher CPMs of local cable advertising?

Flood: That all needs to be explored in terms of the CPMs, but I would challenge that argument. What is more effective: Having someone spend 30 seconds with your creative, or having someone spend five to 10 minutes with your client's content where there is a mechanism built in to request information or interact in some other way. It's also a friendly and more receptive consumer environment, because it's elective. The consumer is asking to see your content, rather than having it pushed at them.

MDN: Do you think any of this will be a factor in this year's upfront? Some agencies have already begun talking about shifting some TV dollars into broadband video, or other options.

Flood: We're pretty close into the upfront but that is part and parcel of why I've ventured into this realm, to use it as a potential alternative to combat media price inflation. There's also a lot of learning from this stuff in terms of determining levels of activity or engagement with a particular network. We can actually gauge the time spent with a network in a way that can be extrapolated into greater involvement with that network.

MDN: How?

Flood: Take TiVo for example. There's a lot of insight to be gleaned from the shows people request for a season's pass. What you do with that information is another question. It's not necessarily a home run, but you know that people are compelled enough that they did not want to miss this show. That said, if you believe the statistics that 70% of viewers view their TiVo on a time-shifted basis, that's a real issue for a retail client, or other time-sensitive people. And then if you take a look at the other big data point - that 70 percent of those people skip the commercials, you obviously have to determine the value proposition of having a higher degree of involvement with the programming but greater indifference toward the advertising. So, if you are buying a "West Wing," or a "Friends," or whatever heavily TiVoed show it may be, you have to weigh the relatively high costs of advertising in these shows versus the impact of TiVo behavior.

MDN: Obviously, there's still a lot of smoke out there. What things are real and actionable - things you can take to the bank today?

Flood: TiVo is definitely actionable. That's pretty solid. That can provide you the whole circle of services that one would like to learn from. You can have a search capability. There's creativity that can be built into it and it can house branded content. It can also direct users to specific content that you might have a sponsorship in. And then there's a research component that's pretty solid in terms of its specificity about the ebbs and flows of content.

In terms of VOD, it's all over the place. In some platforms, depending on the MSO there are already applications for advertising, but it's still a frontier.

Right now, I'm keeping an eye on DirecTV with [former MPG executive] Bob Riordan coming in. They're just getting their feet wet in terms of what they can really do with advertising, but they've got one hell of a base to work with. Lots of innovation, new technologies and 11.5 million users makes DirecTV a player you want to stay close to.

In terms of broadband video, I personally think the more the content is tethered to a traditional media brand like ESPN, or Tech TV, where consumers are accustomed to those brand extensions. I think they work most effectively right now, but you've certainly got to watch Yahoo! and FeedRoom and MSN, especially MSN. You know that Microsoft wants to be a big player in this area.

MDN: What's the new new? What is the platform that you're just starting to scratch your head with?

Flood: I think the new new is the prospect of dealing with cable MSOs on a national basis. It could potentially be as big or bigger than network TV. Just look at what Comcast has already pulled together with Comcast Spotlight. That's just the beginning. The cable operators didn't invest $60 billion just to let VOD die on the vine. They're well entrenched and they're investing in sales at the local level. If we can figure out how to monetize this and develop programs that are local in nature, that offer advertisers a unique opportunity, these technologies can be preventative measures against continued audience fragmentation and distractions. The big difference is that these technologies are offering elective advertising possibilities. They're not just the push orientation.

Broadband is definitely a new new. I think more and more you're going to see a TV-like experience on broadband, especially as the applications advance. You're going to see these video engines - Microsoft Media Player and the RealMedia Player - become increasingly more powerful. I think that people are comfortable with video elements and if they can be made more addressable it represents a whole new frontier for advertising.

Lastly, I think the next big thing will be addressability. Addressability and accountability. They go hand in hand. That's the big opportunity for local cable operators and it may be the thing that ends up transforming the advertising marketplace more than anything else.

MDN: So what've you got stacked on your media track at home? What cool toys are you hooked up to?

Flood: I've got five TVs, three of them hooked up to TiVos. I have one hooked up to DirecTV with a DirecTV combo box. I have the Series II TiVo and I still have the first iteration 14-hour TiVo box. I've also got Cablevision's digital IO cable service and I use Cablevision's Optimum Online service as my broadband carrier, hooked up to two PCs. We have two gaming systems: Microsoft's X-Box and Sony's Playstation 2. And we have Sirius digital satellite radio service. Right now, my household entertainment bill is pretty exciting. And I'm in the market to buy an HDTV TV system. That's the latest entry.