Convergence? The Media Debate
- by June 14, 2002
Karim Sanjabi, president and CEO, Freestyle Interactive: When you say “convergence,” are you talking about online/offline advertising convergence, or are you talking about convergence of different Internet-connected devices? That’s two different topics. If you’re talking about how you’re going to do advertising on Internet-connected devices—which not a lot of experience has gone into; the industry is very young there—versus integration/convergence of online and offline, which we have five or six years of experience behind us now. Michele Madansky, executive director, MediaCom Digital, division of Grey Advertising: I don’t think it’s so much about the technology as it is about being able to communicate with consumers in whatever media vehicle they happen to be using—whether it’s radio, their cell phone, a Palm Pilot, the Internet. There are a lot of media companies, and when you talk about convergence, to me it’s “How do you work with these media companies in reaching people at these touch points?” We do a lot of sophisticated media modeling and we work across not just Internet but also television and radio—all the traditional media platforms. And what we find is that when web advertising is working in conjunction with the more traditional media, it tends to work better.
Bill McCloskey, CEO, Emerging Interest: When you talk about convergence, I see two aspects to it. There’s the back end—when you talk about that digital flow of information, that’s quite true. And you look at the back end of what’s happening and you see various media—television, radio, wireless, etc.—being deployed over an Internet-like connection. And then there’s the front end, which is the interface—how do you actually access that information. And both of them are very different in terms of which ones make sense. For instance, we have the technology available for a person to deliver, theoretically, a commercial across a WebTV or television and being able to target that particular individual, and then also serve that same or sequential messages across a wireless device, an Internet radio—so that you can flow the messages across various types of devices. Well, the real question is: What is the interface like that people are receiving it on? Are people receptive to receiving things on their television, or would they rather receive it on their computer, or on something like a wireless device? And how are all those elements going to be put together?
Sanjabi: And each of the devices is very different. So in a sense you’re taking the same messages and putting it on all the different devices, but that would be like putting the exact same ad on TV, radio, and in print. The actual creative executions are very different. You’re trying to get something onto an Internet-enabled cell phone versus marketing maybe an Instant Messaging ad on AOL-TV while the X-Files are being shown. You can get the same brand tone across the different devices, but the actual messaging is very different, because people use their phone a lot differently than their TV or business computer.
Media: Whether the convergence is on the back end or the front end, people question whether anything significant has happened at all yet. Is it all hype, or do the pieces move closer and closer to snapping together every day? In terms of convergence, or cross-media, or whatever you want to call it, has something powerful already emerged or is it just slowly evolving and will take many years to be realized?
McCloskey: I think it’s evolving; I don’t think you can really point to any particular successes in the area. People are interested in it because it seems to be moving in that direction. But it’s difficult to point to any concrete examples of how it’s really working well. Most people assumed it would be convergence of television and the Internet, and I, for one, have great doubts that that’s going to exist. What you see when the Internet and television do coincide is that it plays mostly to the lowest common denominator—the WebTVs.
I think the more interesting thing on the television side is the idea of time shifting, where the TiVo-like devices are going to be a lot more interesting. But where I do see some interesting things happening with convergence is on the wireless side and the ability of, for instance, a GPS device, to pinpoint me and get me information that I want at that particular time—the Vindigo and AvantGo services. That type of information that can then be combined with advertising is going to be tremendously interesting and powerful as it progresses.
Media: The last time Media magazine ran a debate on convergence, in August, we ended the discussion imagining a future in which you’d point your PDA or cell phone at a billboard or bus stop and get information beamed to it—now there’s Streetbeat.
Madansky: It’s a kiosk and you can put your Palm Pilot up, and it will beam you the specials for this week.
Media: Is that a legitimate example of the convergence of outdoor or out-of-home advertising and the Internet or wireless.
Madansky: There’s a fine line between what is just emerging technology and what is convergence. What we’ve seen over the past year or so is that our clients have stopped thinking of the wireless and emerging media as “Here’s a little bit of money to play with” to spending some real dollars. Because they do see that that’s the future and there is enough of a critical mass of people with Palm Pilots with AvantGo and Vindigo on them that they can see some real results. And from the wireless efforts and an AvantGo effort that we did recently, the click-through rates and conversions are much higher than traditional online advertising. So I see clients continuing to invest there. I don’t know that you would classify Vindigo or AvantGo as convergence versus just emerging technology.
McCloskey: I think what’s converging in those particular technologies is really the people converging with their communications sources. People are wearing their communication devices now. The more people can wrap around communication “mobile-ly,” so that they have the information that they’re used to having on their computer on themselves at all times—I think that’s where things are moving. People like to have the freedom of mobility, and they want to have that information that they’re used to available anyplace and anytime.
Media: What about the CueCats and Digimarcs in print, where you can scan a barcode on a page and go to a website? Is that a legitimate example of convergence, and is it getting anywhere?
Sanjabi: Those things may have some good initial results, but there’s a novelty factor, and whether it’s going to stay around, I’m not sure it’s a good example of convergence; it’s a better example of experimentation. Taking a step back again from the wireless and the set-top box and the still somewhat experimental, where the client is still reluctant to put large dollar amounts into those areas… If you asked the same question a few years back, you would have gotten similar answers, in that right now, if you’re offline advertising, you expect when you go to the website to have the same tone and messaging.
We’ve done a lot in the last couple of years of integration with print media, with outdoor, with TV, carrying over the experience into online—making sure the email and the banners and the buttons and the sponsorships all have an integration with the rest of the branding effort or direct-response effort that the company is doing. That’s almost kind of like an “oh yeah, everybody should be doing that now.” So my point is that we’re hitting a convergence between offline and online media every day.
Then you cross over into the experimental section—which is becoming very mainstream—we run all sorts of ads on AvantGo and Vindigo, the places where you can run ads right now. And yeah, the click-through rates have been great, but how much of that is novelty and is the interest rate still going to be high in twelve months?
Media: If CueCat isn’t an example of convergence between print and online, what about all the print publications going online with web versions of themselves?
Madansky: You can say that about any print publication, network, radio station—they all have their own websites. It’s only convergence if they’re really doing something to extend the brand online. If you’re watching PBS and there’s more information online or you can get the transcripts or interviews… There’s a reason for being as opposed to just having a version of the New York Times online.
Media: I’ve had two experiences in the past few months that I took to be convergence thrills: One was being able to listen to the audio of live CNN coverage of the Presidential election on my laptop, and the other was finally tapping into my AOL email on my cell phone. I really wanted to have access to these things and when I could finally get to them with the devices at hand, it was empowering.
Madansky: Have you seen the Feed Room? They are working with various television networks to stream news feeds. You can create your own news program. You can say, “I’m interested in weather, in sports, I really don’t care about the cat that was stuck on the roof.” So basically you can watch a condensed version of your own news program online.
McCloskey: I think you’ve really hit on it. I think what all of these things end up doing is giving people more control over the types of media that they already enjoy. I think in the past when people have talked about convergence, they’ve talked about putting two items together that were fairly different and making something brand new—for instance, putting the Internet with the television so that you can interact, move the camera, or something along those lines where you’re actually doing something completely different than you could do before. But the examples that you’ve both just demonstrated are really: It’s the same old media—it’s still television, it’s still radio, it’s still your email.
I listen to the Internet radio almost 24 hours, and I listen to the local New York stations, because I get better reception coming through my Internet radio. The difference is, it’s no different than me turning on the radio but now I can also tune in stations around the world and it comes in just as clear. The difference is not the experience—I’m still listening to the radio through my home stereo system—I now have more control over that, the quality is better. But for the advertiser and for the marketer, they know who I am now; they know directly who I am now, because of the way it’s connected, because of the back-end infrastructure. Which means you can start changing the way that advertising appears in that medium that I already love. So I’m listening to the radio and I hear Internet ads that could be—they aren’t right now, but they could be—targeted directly to my interests.
Madansky: The Feed Room is a great example. If you’re interested in targeting only people watching the weather, you can say, “I only want to stream my ad right before someone’s going to watch the weather segment of the news.” And that’s something that’s been very difficult to do. Or automotive: “I only want to stream ads when the topic is automotive.”
Media: So, is this an example of true convergence? Yes, it’s the old media, but because you can slice and dice it any way you want, doesn’t it yield a totally new experience? It’s not only that you get better reception, you can say, “I want to scan constantly and pick up every station playing something by the Doors?” Or time-shift All Things Considered to when I’d like to hear it, but get an alert if CNN has a breaking story.
McCloskey: I think you’re seeing that now. You’ve just described how I listen to the radio. And also how I watch TV. I do almost everything now through the computer. In New York there are no blues stations. I’m a big blues lover. But I have 32 channels of pure blues through my Sonic Box on my computer that runs through my home stereo system. So the ability to give people choice and control is really where you’ve hit it. It’s really not the change of the medium itself; it’s the control of that medium.
Madansky: And also, I would add, that having the two-way communication and being able to enhance the experience that you’re able to do offline. With television, it’s one-way communication. When you start being able to ask questions of the producers online, you’re having a two-way communication. Media: How does this translate into real opportunities for media buyers and planners—targeting people listening to blues programs or splitting the message so you reach just those people when they’re consuming things of real interest? Do we think these are real opportunities or just theory and hype? How do media buyers get into this now and make the most of the opportunities coming?
Sanjabi: The most interesting stuff is still coming. Right now we can track Bill and send him blues ads, because we know he listens to blues, and we can go buy that.
McCloskey: Now I’m going to be bombarded with blues ads. [laughs]
Media: You’re going to know whenever B.B. King is anywhere within a 100-mile radius.
Sanjabi: But what would be the next step is being able to say, “Yeah, Bill’s a blues fan, but he doesn’t really like these 10 artists, because every time we put them on he switches the channel.” So you can take the profiling down another notch and get even more-targeted ads to Bill.
I strongly believe that people enjoy advertising as long as it’s relevant to them. But if you’re a Ford lover and a Chevy ad comes up, it doesn’t matter what Chevy does, you’re going to switch it off. Chevy’s wasting money sending that ad to you over whatever medium it is. Whereas you may be very interested in the next Ford model that’s coming out and you want to get information about it.
But we’re several years away from doing that, beyond collaborative filtering systems, which you can do now on a very limited number of books and music on a limited number of sites that have their act together. Companies like Net Perceptions or E.piphany—the basic idea is Amazon: You’ve bought these books, can I also recommend these books to you.
Sanjabi: A great company that’s using this is called Netflix, a DVD-rental service. They have a permission-based email newsletter.
Madansky: They aggregate the data across all the users and see if there are any correlations. Firefly was the original of this. Media: Does Amazon then sit at the center of the whole convergence experience or are there other sources?
Madansky: They’re using this for their own site’s benefit. To the best of my knowledge, they’re not using it for advertisers on their site.
Sanjabi: That’s the next step. I would love to give Amazon permission to extend collaborative filtering or to let other people market to me, but let me click on the ads that I don’t like—don’t show me Chevy ads; I only want to see Ford ads—and let me control my own ad viewing to a very fine level.
Media: Who else will be in a position to do that? What about the elephant in the room: AOL-Time Warner?
McCloskey: They’re certainly tying up the delivery mechanism very nicely, so the ability to deliver media across various delivery platforms is something that is key to all of this. The person who controls the delivery of the media, controls the media. The whole idea of collaborative filtering, however, is really a process that is applied to e-commerce as opposed to advertising. The question is: Can you apply that to advertising?
Sanjabi: It hasn’t been implemented in anything other than e-commerce yet, but I don’t think there’s any difference between which books I like and which ads I like, in a sense.
McCloskey: The difference being that it’s easier and faster to get the database of knowledge that you need when it’s e-commerce.
Madansky: I think a DoubleClick or an Engage would be a better company to be able to handle this than an AOL-Time Warner, because they have the database; they’re building these databases. I do see that down the road.
Media: Will they be in the position to link together your radio choices, your television choices, and everything else?
Madansky: More just the online—what sites you’re visiting, what you’re purchasing online, etc. There are some privacy issues, but in terms of being able to target, they have the data on the back end, at least online.
Media: But if everything happens online anyway—you watch your TV and listen to radio online—if it’s all digital, isn’t everything online then? Something is registering all these choices and the content that you’re consuming. All that can be collected and, assuming Bill wants it to, can go to marketers who can offer him the types of things he’s interested in.
Madansky: Yeah.
Sanjabi: Sure, we already have enormous information on Bill. And when the Internet goes to radio and other media, we’ll have more. I always predict that when TV becomes really trackable, we’re going to lose…the advertisers are going to have a huge push on the agencies to say, “I want direct-response campaigns, because it’s trackable now.” And a lot of the amazing branding work that you see on TV is going to be… we’re going to be thrown like five years into the Stone Age, as people say, “My ‘Wassup?’ TV spot didn’t get as high click-throughs as my Ginsu knife commercial.”
Media: So, Bill, if all of your consuming is being done through your computer and it’s trackable, and some entity is able to aggregate all of that, what entity is that likely to be and how would you like them to serve you advertising messages?
McCloskey: It’s such an interesting point. We touched on the privacy issue, there’s this overreaction—or maybe it’s not overreaction; it’s quite well-founded—that people are worried their private lives and their private interests are being collected for nefarious reasons. I think all those concerns are very legitimate. But on the other hand, I am very happy to tell you the brands and things that I love. And if there’s a way of filtering out the stuff that I don’t love—that’ll get rid of 90 percent of the junk I receive every day—and if the mail that came through was just the stuff I was actually interested in, I’d love it. And there’s a good chance I’d buy what they’re selling. As far as who’s going to control it, I think it’s a mistake to think that one entity’s going to control it. It will probably be many people, and hopefully, it will be the advertiser itself who owns the relationship with me.
Sanjabi: I would disagree slightly and say I would hope it’s the individual who controls the information about themselves.
Media: You can always control your own profile by what information you choose to reveal. But on the back end, there’s this entity—you say it’s the advertiser but maybe it’s the ad server.
Madansky: The ad server isn’t having the relationship, it’s just enabling the advertiser to communicate, enabling the targeting.
Media: Who owns the information?
Madansky: The advertiser should own their own specific data.
Sanjabi: And sometimes the network owns data that the advertiser rents. But there’s usually a couple sets of data that’s owned.
Madansky: I want to be a little contrarian here. I agree with what you’re saying in terms of as a consumer being able to control some of the advertising. But beyond the things that people are passionate about, there are things they still have to buy, like diapers and dishwashing liquid. And speaking as Procter’s agency, they need to communicate with people online, and I don’t think there are a lot of people who are necessarily going to opt in to hear about laundry detergent, but everyone buys it.
Media: As soon as my children were born, I started getting the dollar-off coupons for formula. And somehow they switched to first foods just at the right time. I’ll take a dollar off diapers any time. [laughs]
Madansky: The hospital sells those lists. But I wouldn’t opt in for diapers.
McCloskey: Pretty soon you’ll be getting college brochures. [laughs] But as far as convergence is concerned, the interesting thing is the type of advertising, the media that was never open to direct marketing before, which is now available to direct marketers. Direct marketers for the most part were not able to target people other than through print. You can send me something in the mail and perhaps hit me, perhaps not. But now direct marketers can send television commercials that are targeted to me or audio commercials that are targeted to me. And that’s something they weren’t able to do before: they weren’t able to buy a list and send me a TV commercial. Now they can.
Media: Does that mean all advertisers will become direct marketers?
Sanjabi: It’s an unfortunate—and a fortunate—side effect of trackable media. If the Internet came out, and it wasn’t a trackable medium, the ads we’d be seeing now…you wouldn’t go to Yahoo and see a hundred lousy banner ads. You’d see things that were not purely direct response, and you’d see more branding work. Finally, right now, advertisers are warming up and accepting the fact that the Internet, and banners in particular (as well as emails and some of the other formats), are actually a great branding mechanism. And you’re starting to see the dollars being put towards branding and clients saying, “The click-through rates, the direct response, is not important to me,” which they should have done. But it’s been a huge setback to online that it came out as trackable. You had Ginsu knife banners on every site.
Madansky: On the flip side, what we’ve seen with a lot of the dot-coms is that now that their VC money has gone by the wayside, they want their television and radio dollars to be more accountable. And that’s why we’re doing all this marketing mix modeling for them. I agree there has to be a branding component, and you can look at the long-term effects of television and radio—and packaged goods clients have been doing that forever—to see whether there is a discernable impact on awareness and attitudes. But at the end of the day, if you’re an e-commerce site, you need people at your site, you need sales. Otherwise, you’re going to go out of business. And I think gone are the days of these $20-million television budgets for a lot of the dot-coms.
McCloskey: So maybe you can say the real convergence is happening between the brand advertisers and the direct marketers.
Media: Every ad will be a direct-response ad, and those that don’t get an immediate response, they’ll just call branding.
Madansky: The whole delayed response.
Sanjabi: That’s what TV and radio have been doing for years and years.
Media: But you couldn’t click on the radio ad before, and now you can because you’re listening online.
Sanjabi: A few people can.
McCloskey: I can. [laughs] Media: So is convergence mainly hype or is it a reality that media buyers and planners can buy into today?
Sanjabi: They absolutely have options today. We’re very busy at our company making all this stuff happen in a real practical sense. There’s a lot of options open today, and they’re growing every day.
Madansky: There’s a lot of options on a small scale, but some of the bigger advertisers may want to hold off until there’s more of a critical mass that you can reach. Media: Can they afford to sit back and wait?
Madansky: Smart marketers should be experimenting, learning, and building up databases so that when they are able to serve ads dynamically, they’ll be better equipped to do so. But a lot of this depends on the economy over the next year or two, to see whether the companies that have been developing the technology and the infrastructure are going to have enough funding to move forward quickly.
