A quartet of media veterans discuss the technologies, trends and challenges of the new century
Last month, the nation's media elite gathered at the Disney Contemporary Resort in Orlando to attend the American Association of Advertising Agencies' annual Media Conference. The focus was on the future. Underneath the bright Florida sun, the assembled media executives, bundled and unbundled, wrestled with the remarkable changes transforming their industry. Old media, new media, bold innovations and conventional concerns were just some of the issues preoccupying the executives. Adweek media editor Jack Feuer sat down with four of the best and brightest to talk about their craft and some of the most impactful trends and issues affecting it. The panel represented the spectrum of the media business today: an agency head, strategic leaders and the media director of a $1 billion agency. Together, they talked about the tools of their trade, today and tomorrow. The panel included Cheryl Idell, executive vice president, director of Initiative Media Technologies for Initiative Media North America; Helen Katz, senior vice president, director of strategic resources at Zenith Media Services; Kal Liebowitz, president of KSL Media; and Fred Sattler, executive media director at Doner Advertising.
ADWEEK: Let's play a phrase association to start, to get a sense of some general perspectives. What's the first thing the four of you think of when you hear the question, "What are the most dramatic changes in your business?"
SATTLER: I'll say dot.coms.
ADWEEK: Maybe I should have excluded dot.coms. Anything else?
LIEBOWITZ: It's not only the dot.coms. It's the Internet. It's current clients trying to expand their capabilities or their product. They want to expand their horizons. Everybody wants to take advantage of the opportunities to expand the marketplace and the efficiencies of doing business on the Web. I mean all of the car businessess that have sprung up, or all the health businesses. These guys live in an Internet world on Internet time, and they put tremendous pressure on us from a planning, buying and implementing standpoint.
KATZ: For me, it's what used to be the media buying shops turning into full-service media agencies and coming up more [in media-only reviews] against the full-service agencies. That seems to be one of the biggest changes.
IDELL: How can you expand the definition of media to really [mean] total communication at any time with a customer. Anytime a consumer interacts with a brand message in any way, it's now considered media, which expands our role much more strategically [in general] and it expands our role with clients.
SATTLER: I guess I might be the contrarian in that as traditional ad agencies and media departments trip over themselves to unbundle and silo their operations, it's one of the biggest exercises I've seen in a long time. At Doner, I work in an environment where I share the same roof with the people who write the ads and that is the way we define total communications planning.
ADWEEK: What about changes in your staffs? How are you coping with the steady exodus of people to the dot.coms?
IDELL: We're not just looking for people who were planners at agencies. We're looking for people who were econometricians, who were anthropologists.
IDELL: Whatever it might be.
ADWEEK: Do you have an anthropologist on staff?
IDELL: No, but I'm looking for one. We want people [at Initiative] who understand consumers, we want people who understand marketing, we don't want people who just understand media. We really need people from a wide, wide range of backgrounds. The other challenge in staffing right now is keeping junior people excited and motivated and trained.
KATZ: Keeping them.
IDELL: Yes. And it's really challenging to do that.
ADWEEK: When you started talking, Cheryl, the other three immediately started nodding their heads. So this is a button for everyone. Another topic is interactivity. It's been talked about in media agencies for a long time. Now it appears to be almost here. How will it change media planning, strategizing and buying?
SATTLER: As digital delivery of cable signals and digital delivery of advertising messages progress, it will allow us to have true one-to-one communication. The possibilities on the Internet are certainly here and they're expanding beyond banners to rich media. But frankly, I'm more excited about us being able to do something more quickly with television.
KATZ: I'm excited too, but I don't think we're quite there yet. I think it's going to depend on digital cable rolling out and getting into more homes. Right now, it's really baby steps with a few tests.
IDELL: There are exciting parts and then there are parts that are going to be very, very challenging and scary to our business. The exciting parts are being able to address targeted ads, being able to get consumers to respond directly to ads, which we've always had with direct-response television but now we can do it in a bigger way. When we get interactive television in a bigger way, the scary part will be that people who interact with ads are not there for the next ad [that appears]. And it will be a whole new set of challenges to get people to stay around for the ad that isn't interactive or for the ad [that runs] after the ad they choose to interact with.
ADWEEK: Speaking of next steps, let's talk about optimizers, the computerized media plannning systems that originally came from Europe. Now that optimizers have invaded and conquered, does everybody use optimizers all of the time now and when can we expect all-media optimization?
KATZ: We're using them for national television, not all the time but where it makes sense. It's become another tool that we use; it's not the be-all and end-all.
ADWEEK: Where does it make sense?
KATZ: It makes sense when you want to verify or validate what you're doing and see if the optimizers give you similar results or something completely different. It makes sense if you've been using a certain number of dayparts, for example, or program types for a long time and you want to see what other options are out there.
IDELL: Really, what optimizers have done is to help us understand how to analyze television better than before because now we have access to data in different ways. You can't continually use optimizers and see huge advantages year after year. You go through a first initial pass, you can see a big change that you can make and then, after that, it's fine-tuning.
LIEBOWITZ: The problem with optimizers is strictly numbers. We place a lot of value on attentiveness. Like early morning, which was an efficient daypart until recently, but no longer. It's [become] background music. That's why shows like the Super Bowl, which may be at a premium price, could command it because there's so much attention [paid] to the product. So a lot of our clients don't care for optimizers. They have to make a splash; they've got to get attention. They need an event that's going to rub off positively on their products.
ADWEEK: Another topic that's getting a lot of attention is performance-based compensation, performance-based measurability. Are you for, against or mixed?
LIEBOWITZ: Almost every one of our clients [want performance-based compensation] because most of our clients are driven to a site, driven to a Web site, so our [performance] is tied to visitation and conversion or direct response. But usually our compensation is a standard compensation with incentives. So if we can drive so much visitation to the sites or so much to their phone numbers, we get compensated based on that.
SATTLER: Incentive-based compensation is something we believe in as well. But for branding clients, for whom you need to move attitudes, we should be held accountable for communications measures. I mean, that's the business we're in. And if we can move those, as well as sales, I think we should monitor both.
IDELL: It used to be "Take all this money and throw it into television for an awareness campaign" and, yeah, you can track awareness if you know how much your advertising contributed to your sales. We're getting much more involved in market mix analysis, media mix analysis, market mix modeling. We've added a department of econometricians. Because what we need to do now is go back to clients and show them the ROI they're getting from different elements of their marketing mix. It's finally becoming more measurable, being able to use a little bit of that black-box science, if you will.
KATZ: I think one thing [performance-based compensation] does is it makes you a partner. If you donate some kind of modeling, you rely heavily on the client to provide you with a lot more data than in the past. And that's always a good thing because you understand their business better and you can help them.
IDELL: Yes, you have to be a business partner, not just a media vendor.
SATTLER: My experience with modeling is that the most valuable part of the exercise is the data collection. That's where you get many good, intuitive insights.
ADWEEK: Speaking of having dialogues with clients, let's talk a bit about recency, the philosophy that how much you advertise isn't as important as how close your ad gets to the moment a consumer actually purchases something. It has become a part of the advertising lexicon. What do you think about this theory? Is it in widespread use at your shops?
KATZ: I think it's been proven more with packaged goods. I think it's made a lot of other clients in other categories think more about the process. They've been kind of forced to go back and look at it again.
LIEBOWITZ: The guy who wrote the book on recency, Walter Reichel, has just joined us. He's committed to it. He believes that he is instilling [the theory] into our whole planning group. But it's just one element. We've become much less tactical and much more strategic in media departments and media services. Recency is just another tool.
KATZ: I think [recency] indirectly pushed the print industry into re-evaluating [the way they report circulation] because it forced them to consider weekly rather than monthly audit measurement, statistics, etc.
ADWEEK: That's one very significant change.
LIEBOWITZ: Recency also controlled television [through] more use of [15-second spots]. You have to be on the air more times during the week, more weeks. We've got one agency, we call it Frank's Famous Fifteens. He only creates :15s because he believes in recency.
SATTLER: Recency has gotten us all to talk about scheduling objectives in a fashion we never did before. So certainly it's raised the level of, and the sophistication of, the dialogue we have with clients. Actually, retailers have been buying into recency forever with weekend sales. On the other hand, if you're an automotive advertiser and you're in the most cluttered category, recency by itself isn't going to be enough because you have to pay attention to the amount of category noise and step up to that.
ADWEEK: Another phrase association, if you will: changes in the media?
IDELL: Digital. We're seeing media brands that, where their content is digital, it can be easily distributed by a wide, wide range of platforms. It's digital technology that's made that happen and it changes the way we look at, plan, buy, sell and think about media brands.
ADWEEK: Convergence, in other words?
KATZ: It's consolidation of ownership. Now you have to think about what other properties a media company owns in terms of possibly negotiating a buy that crosses multimedia.
LIEBOWITZ: I would say [it's] scary. Take a look at CBS. That's going to be an empire. With his radio, with his television, with his cable, [CBS head Mel Karmazin] has distribution now and he's got product. [CBS] is a scary player in this environment over the next few years.
ADWEEK: Do you think media consolidation, like the CBS/Viacom merger, is scary because they will be able to dictate to you?
IDELL: Mel's argument, and I think he said it last year at this conference, is [the buyer side] is the same thing. You used to be KSL sitting independently over here and now you're part of True North. We're part of Interpublic. We've got the same thing going on in our end of the business, which is five or six major holding companies that are going to be in control on the buying end and five or six major media companies in control on the selling end.
SATTLER: Well, my unattached take on all of this, if you want me to speak to all of the consolidation of media companies, is that the conflicts and the antitrust issues are happening at a lower profile. I don't think CBS is restricting advertisers for being on [competitors] because CBS owns Marketwatch per se. You do have the Discovery Channel and [its other] networks keeping health sites off their air because they have a health site themselves. And we had the recent episode with Univision where they did not want to allow any Spanish-language or Hispanic-targeted dot.coms to advertise on their air because they had an Internet strategy and they wanted to be the exclusive conduit. So as these issues start to rise to a higher and higher profile, it's going to be a real problem. And we don't even know where we're going to hit some of these speed bumps or potholes ahead.
ADWEEK: Would that have been your answer to the question about changes in media?
SATTLER: I think we're going to get nostalgic for mass media. I think that outdoor [advertising] is going to look very attractive to a lot of advertisers who want to talk to everybody at once. I think that medium has a good future and maybe some less glamorous media like Sunday newspaper supplements, something that gets out there in large numbers and talks to a lot of consumers simultaneously.
ADWEEK: Sunday supplements?
IDELL: You heard it here first.
ADWEEK: That's right, Sunday. Fred says you'll read it on Sunday.
SATTLER: No, but certainly I'd like to underscore the point about outdoor. I think that medium is undergoing a renaissance and as a result, the selling community is trying to sharpen its sophistication.
ADWEEK: How about new media options? Not with a
capital "N" and "M," as in advertising on the Internet, but with new ways of getting your communication to your consumer? What's your prognosis for some of the more promising?
KATZ: I think one--it's not really new, but certainly growing--is sponsorship. I think you're going to see more brand names appearing as sponsor properties. In fact, I was just reading that a theater in Chicago is being renamed for American Airlines. It's out of the sports category and moving into others.
ADWEEK: That's a great example because not too many years ago that might have been considered event marketing.
LIEBOWITZ: We handle a lot of dot.coms that deal in the financial community. And so we're deluged with ideas on golf. The latest idea is at the driving range, the separators [that separate the individual golfers]; they're out there selling now. There are thousands of them that have most of the traffic. They sell you the boards that separate one mat from another. And the way they monitor it is by how many balls are bought.
ADWEEK: Cost per ball.
LIEBOWITZ: Cost per ball, so it's wild out there with all the ideas.
KATZ: I was in the airport coming here and I was looking around in the gate area to see how many people were watching the CNN monitor, and it was zero. I mean, it's just background noise. And they sell you on the basis of traffic but no one's watching.
LIEBOWITZ: Another one is advertising on [baggage] carousels.
IDELL: And there's no time when you're more annoyed.
LIEBOWITZ: They say the average customer [waits] 20 minutes and sees the ad 20 times--it's a 10-foot ad.
IDELL: And you get progressively angrier each time you see it.
SATTLER: I think a medium to watch, if it is a medium yet, is the multiple forms of digital audio. Whether it's Web-based or direct transmission of digital radio, we have those two competing formats now. I think that could be interesting, you know. Advertisers sponsoring an entire channel and customizing program offerings.
IDELL: I think the other interesting thing is, I think it's the Princeton Graphics people ...
SATTLER: The burn-ins.
IDELL: Yeah, where the people in a stadium are seeing the actual backboard, or whatever it might be, and if you're watching at home, they're virtually inserting [another ad].
LIEBOWITZ: The syndicators are doing it now.
IDELL: Yes, you can get it on Baywatch.
LIEBOWITZ: But it's tough to price. I mean, we're negotiating right now for some burn-ins for a product placement, but how do you price a burn-in? You know, Meow Mix on a table? It's just sitting there. Is that [priced like] a :10, a :15, what?
SATTLER: I have an admission to make. I'm not really here. I've been burned in.
ADWEEK: Which medium is the most overrated buy? Helen is sighing deeply.
KATZ: I've been thinking about this since I got the questions [via e-mail].
SATTLER: Oh, that's easy. Radio sports. Absolutely. I mean, it's intuitive. You don't even have to measure it. As increased television coverage of sports events has occurred, radio audiences are halved when the same game is also telecast. So radio audience has been declining over the last 10 years and television has been going the other way. In their desperation, we're finding radio wanting to have their sports audiences measured by political pollsters, anybody but the media experts.
IDELL: I had a tough time with this question also. I think for the majority of advertisers, it's the Super Bowl. Unless you've got something very special to say in a very special way, or unless you're going to involve yourself with it in a very dominant position, the Super Bowl is just not an effective use [of media dollars]. I can't imagine the dot.coms really benefited from what they did this year because you can't build a brand in 30 seconds, even if 50 million people see your ad.
SATTLER: It actually benefited our client, Autotrader.com. It was given an extra kick and a bit of momentum. The results may sustain, plus in terms of their distribution channels and their dealers, they created a lot of excitement. So it was a best fit situation and we were fortunate to have that.
IDELL: They sustain, the target was right and they used it for multiple constituencies, not just the consumer audience.
LIEBOWITZ: Exactly right. We bought one for epidemic.com at the last minute too, and it had nothing to do with awareness, really. It was [just to reach] venture-capital people, viral marketing, if you will.
ADWEEK: Viral marketing for epidemic.com.
LIEBOWITZ: But I agree it's a tough question. To me, it depends on the advertising. Some of the craziest things advertisers do you have no idea what they're really doing because they're doing it for other [than logical business] reasons. It's not for the consumer. You might be looking at [an ad for] a kid's site in The Wall Street Journal that's for the equity community. Why is that site targeting kids in the Wall Street Journal? So it really depends on what's going on with the client at any given time.
KATZ: I guess I have to go with the Internet at this point. I think everyone's rush to the Internet to advertise is, again, dependent on the circumstances, questionable in terms of being able to reach the people you want to reach and have them look at the ad. It's sort of like cutting it into wallpaper. I know when I'm on the Internet, I'm not clicking on banner ads. I'm trying to get my information.
SATTLER: That's what I do. I think a lot of clients and agency folks sometimes confuse the fact that the Internet is a great marketing medium, but it hasn't blossomed as an advertising medium. The fact that it can operate as an electronic storefront and extend the opportunities for commerce is a wonderful advancement. But trying to persuade on something the size of a stick
of Dentyne is a formidable task, and I challenge the Internet to give us more opportunities because what we're paid to do is persuade.
KATZ: The other issue I have with the Internet is that the measurement leaves a lot to be desired. I think we're all fumbling in the dark in terms of understanding who is seeing our ads, how they're using them and how are they understanding them.
ADWEEK: Almost daily, it seems, another company appears willing to provide, for a fee, media planning and buying online. Do you think planning and buying is going to move online completely?
IDELL: It will never all be done that way. There have to be people, relationships, there are going to be deals that are going to have to exist outside of what you can trade electronically. There are going to be sponsorships that you need to negotiate with people. You have to get an understanding of a medium and the person who represents that medium needs to bring you that. But every single business on this planet is going to be somehow conducted on the Internet, whether that's buying pet food or buying and selling advertising. So the influence of sites will grow, but there's still a role for an advisor.
ADWEEK: I guess you said it all because everyone is shaking their heads.
LIEBOWITZ: A lot of dot.coms don't consider it buying, they consider it business development. They try to be more resourceful than just buying banner ads. They try to do some swapping of advertising, or what have you. There are many people who believe that online planning and buying is going to be the future.
IDELL: There's no question it adds incredibly to productivity. You can be sitting here at a conference, go up to your hotel room, go online and get some aspects of your job done, whether checking avails or e-mails.
ADWEEK: On the research front, clients often say they want cross-media comparisons in addition to the conventional comparisons within one medium. What they really want is to measure effectiveness across media.
SATTLER: When you create [cross-media] experiments, a lot of the resulting creative product is quite an artifice. If what is important [to a client] is demonstration, television is a natural medium. If you try to force that in print, what is it that you're measuring as the best communication? It has to be a discussion that involves the creatives as well. It's not just a simple media discussion.
KATZ: I think we've been doing [cross-media comparison] forever already. Certainly from a planning standpoint.
LIEBOWITZ: It's been there. We've always given clients the options, we always do it as a menu. But you know, as Fred said, a lot of this involves the creatives; it's creatively driven. [They say] "Forget the numbers, I want television or I want radio."
SATTLER: It's our job as media specialists to share with the creatives what the opportunities are, and I think that people like the Magazine Publishers Association [and others] are out there and showing what their medium can do. You know, the MPA has the Kelly Awards and those kinds of things just get the creatives more excited about the medium and use it in new ways.
ADWEEK: What about the upfront [television negotiating and selling season]? What do you think is going to happen in the upfront this year?
LIEBOWITZ: Nothing good.
KATZ: We really can't say. You can't say it's going to be booming because then you can't get good deals.
LIEBOWITZ: We'd be feeding our friends over in the media [with upfront predictions], but I think they see it. With the election, the Olympics, the booming economy, the dot.com business you know, we're nervous about it. They see the same things we see. They see the economic forecasts. They see all the economic indicators.
SATTLER: It's like Gen. Schwarzkopf telling Saddam what beach he's going to hit.
ADWEEK: If you wrote down today what you think the future's going to be like and we opened it up in 10 years, what would your predictions be? What do you think the media landscape is going to look like in the year 2010?
SATTLER: Increased portability of electronic visual media, the Internet on the run, having 100 television channels on the run. It's an exciting prospect to have that array. We live in a society that demands portability yet we're tethered to our homes to access the Internet.
IDELL: To play off that, what it's going to mean from the media standpoint is more and more consumer choice. They can get what they want when they want it and where they want it, which means that our business needs to get much more consumer-centric, consumer focused. Not individual media by media, but understanding those consumers and how to surround them, if you will, with the marketing messages we need to [communicate]. The other thing that will change in the media world, which we just talked about--or didn't talk about--is the upfront. We're not necessarily going to be negotiating to buy individual TV shows, we're going to be looking at media brands. We're going to be looking at a brand like Sports Illustrated and all of its different platforms. And we might have an upfront with Sports Illustrated or with the Health Network, because we know that our consumer is interested across a range of platforms in a certain media brand.
KATZ: There will be more buying by vendor as opposed to just, for example, NBC network. It will be whoever owns NBC that year. Again, from a research standpoint, there will be changes and hopefully greater sophistication in the measurement of how people are using media. Maybe it will an extension of not just plugging numbers into a system but more of the big picture of understanding people's usage in a broader sense and a bigger picture.
LIEBOWITZ: It all boils down to complexity for us. All this fragmentation. It used to be mass media, now it's specialized media. It's now personalized media, as you say, on the go and it's going to be much more consumer driven. That's going to make our jobs a lot harder and research more complex and costly. [That's why] media companies like ourselves are going to get more respect. Media is going to come more to the forefront, as it is coming right now. The dot.coms realize that media is their biggest investment. So the first thing on their shopping list when they go out shopping [for marketing vendors] is to get a good design firm. The second spot is the public-relations company. The third spot is media. Not creative.
SATTLER: Oh, I agree that media departments have a special relationship with dot.coms. In fact, what we're witnessing is the developing and evolution of the Web as a medium. The Internet is a medium and we are media experts in the consumption and tracking of how media is consumed, so we have a special connection with their issues.
IDELL: The other thing that's going to happen in 2010 is television's going to be back again. Not necessarily with one mass audience as we have it now, but I think that interactivity in television and the ability to go between television and the Web will be more mainstream by 2010. It is going to open the door for television advertising to be better, because it will take some handcuffs off, which may have been there with traditional 30- or 15-second executions. People are underestimating television. Remember, television is only 50 years old. It's never been stable, and I think there's going to be a resurgence. The Internet will be the place you go to finish your transaction, but it's not going to be the place you go for the advertising.
SATTLER: And to bring it back full circle, I think the audience aggregation will happen at the set top [where commercials can be personalized] and not at the broadcast property. As a result, even if the audience gets fragmented, if I want to reach you, I'm going to have my ad in a queue and I'm just up next no matter what [program] you tune into.
IDELL: That's right. I don't care what the program is, it's going to be [like] an electronic e-mail.
KATZ: Also, with the video recorders, we don't even know what program they're going to decide to watch or when they're going to watch it.
IDELL: And why do we care, really? The whole purpose of buying an ad on a particular show is because you think there are [certain] types of people who watch it. But if I know for sure that these people are going to watch my ads, the program itself becomes irrelevant and it's mass direct mail.
SATTLER: But there are a lot of entrenched interests that will keep that day from coming because it will have an incredible impact on which programming succeeds. K