Advertisement

Strangers in the Night

Advertisement

NEW YORK One day last month, a dozen startup executives gathered in downtown San Francisco. Instead of the usual tech gathering to discuss APIs, Web services and data portability, the subject was Advertising 101. Interpublic Group agency Universal McCann invited the execs there to learn how an ad campaign is put together, the campaign life cycle, how budgets are allocated.

The project, dubbed the Media Combinator, is an effort to bridge the persistent gap between Silicon Valley and Madison Avenue, which continues to hinder the development of new forms of advertising and marketing. As the technology and advertising worlds continue to collide, their mind-sets and mores remain worlds apart. In Silicon Valley, the engineer is king, the focus is on usability and utility, problems are often solved by math. Madison Avenue, while a far cry from its Mad Men heyday, continues to be a relationship business, specializing in building brands through emotion-fueled creativity.

"We realized we speak different languages," said Brian Monahan, social media lead at Universal McCann, who conceived of the Media Combinator after seeing many misconceptions of advertising among startups. "They don't understand our process. Our folks often don't have the time to understand their value proposition."

This divide is probably best exemplified by Google, the undisputed star and idol of Silicon Valley. Despite selling billions of dollars in advertising, Google continues to insist that it is not a media company. Many on Madison Avenue still don't know what to make of Google, which at times steps on the toes of its agency partners by going directly to clients and presenting its products in a take-it-or-leave-it manner.

The goal for many Web 2.0 firms is to build the next Google. Some see whiffs of Google behavior in Silicon Valley's current darling, Facebook. CEO Mark Zuckerberg arrived on Madison Avenue a year ago to brashly proclaim, "Once every 100 years media changes." Agency executives chuckled at his hubris, while a centerpiece of Facebook's effort, Beacon, fell flat under privacy concerns over streaming updates of people's activities on other sites to their friends.

"That was an engineer who created an advertising model and it fundamentally didn't work," said Cory Treffiletti, president at Catalyst SF, a San Francisco firm that works with startups on ad strategies.

The view from Silicon Valley is Madison Avenue can still be slow-moving, often inefficient and stuck in old ways of doing business. Agency business models tend to compensate them not for strategy. "They don't have the time to sit and think about all these new platforms," Treffiletti said. This is most evident in agencies insisting on scale when making media buys. The result can be seen in the Interactive Advertising Bureau's ad spending figures, which show the top 10 Web properties getting 69 percent of online ad spending in 2007, even as consumers spend more of their time on specialized destinations and services. If new opportunities don't fit on a media planner's spreadsheet, chances are they'll get passed over.

Continue to next page →