New Technologies Will Disrupt Mass Media, Mass Marketing, Says Forecast 2005 Panel

During a session at yesterday's Forecast 2005 entitled "Disruptive Technologies," a group of panelists debated the impact of various technologies such as DVRs and targeting software on the media business.

The resolve presented to the group was: "Emerging technologies will completely break down the last vestiges of mass media and mass marketing." Panelists were not completely sold on this notion, but they universally agreed that the TV business in particular was set to undergo tremendous change.

The topic of "addressability" in TV advertising--the continually buzzed-about concept of individually tailoring advertising messages to viewers--was top of mind.

"Addressability turns a mass model to a targetable model," said Adam Gerber, director of media strategy at MediaVest.

Yet it was Gerber who played the role of skeptic in the group, adding that business realities often prohibit change. "It's difficult to change existing businesses," he said. "The vision is brilliant. The problem is that the networks control the inventory."



Dave Smith, president and media director of Mediasmith, who served as moderator, pointed out the inherent side effect of selling highly targeted TV inventory. "Who's going to pay for what's left?"

Gerber agreed. "Waste makes the TV business work."

Of course, those with a vested interest were positive in their assessment. "We are big fans of disruption," said David Downey, CEO and president of Invidi, which aggregates television viewership across multiple cable channels for sale against specific demographic targets. "[Our technology] enables media buyers to aggregate audience across a spectrum with the selectivity of direct mail."

Paul Donato, Nielsen's senior vice president and chief research officer, cautioned that massive changes in the TV business had been promised before, particularly in the realm of interactive TV--and little change was delivered. "Everything in the early 1990s was going to be revolutionized," he said. "It didn't happen."

DVRs, like the popular TiVo, were also discussed at length, with most acknowledging that their continued adoption has the potential to dramatically alter the role of the 30-second spot.

Neil Strow, advertising and research sales manager at TiVo, encouraged advertisers to "work with us while we are still young." He added: "It's not a question of when this becomes rampant. It's going to happen. Once it's in the house, it never leaves."

Gerber said that when DVRs like TiVo reach significant penetration--in the neighborhood of 30 million TV homes--"that's a threat to me as a buyer. That kills my ad model." Again, he pointed to the networks as not being cooperative in addressing this issue in terms of advertising: "Three quarters of the industry is not working with us."

Panelists also pointed to the growth of product placement in TV shows as a means to combat DVR users' propensity to skip commercials. Yet most saw this tactic as being limited. "A lot of what we are seeing now is experimental," said Donato. "It's risk aversion."

"You can't squeeze a 60 billion dollar marketplace into product placement," Gerber said. "People will turn their sets off."

Beyond TV, the group offered predictions on other technological advances that are likely to affect the media business significantly, including wireless applications and home networking.

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