For media agencies, the big challenges in 2006

For media agencies, the big challenges in 2006 will include showing clients how to capture consumers’ attention while advances in technology lead to changing media-consumption habits and increasing client ROI demands. But those two trends will often be at odds with each other, said Charles Courtier, executive chairman, WPP’s Mediaedge:cia. “On the one hand we have this pressure to deliver better value overall, and on the other side there is strategic change going on in the marketplace, which requires getting into new areas at the taking of some risk. Clients aren’t wrong to require both, but sometimes you have to accept that the two things pull in different directions.”

The digital video recorder is on the minds of many media execs as the industry braces for a tripling in DVR penetration over the next two years to at least 25 percent, per Forrester Research. The rapidly escalating cost for net TV was already a hot-button issue for the media world and one that will be exacerbated in the coming year, as Nielsen Media Research starts to measure DVR playback and to identify more precisely the extent to which viewers skip through ads. “It may change the pricing and supply-and-demand dynamics” for TV ads, said Joe Uva, CEO of Omnicom’s OMD Worldwide. “Time-shifted viewing clearly needs to be factored into the price an advertiser pays.”

It’s not just time-shifting that the industry has to deal with—it’s “place-shifting” as well. Alec Gerster, CEO, Interpublic Group’s Initiative Worldwide, said the video iPod phenomenon is a part of a “sea change” in distribution that will continue in 2006. “You’re beginning to see content, particularly some of the off-network stuff, find its way onto some of these new digital platforms that were thought to be years away,” he said. “The consumer interaction with these technologies is forcing decisions regarding content. And the content owners aren’t doing it because they think it’s the greatest idea … they know there is risk in doing it. They’re just hoping the upside, which may not be totally apparent now, will be there as well.”

Laura Desmond, CEO, Publicis’ MediaVest USA, said all this change raises questions about ad spend and what forms of contact go well together. “We have to think more broadly about how we use these new forms of communication, and it’s not going to be as standard or scalable a decision as buying a 30-second spot,” she said.

And media execs say no platform today better matches consumers to messages than Google. Gerster noted that the industry needs to figure out how best to apply search technology to other platforms. “I’ll be looking out for the Google effect,” he said.