4A’s: Tech Firms Tell Ad Folks, ‘We’re Here to Help’

DANA POINT, CALIF. Top executives from Yahoo! and Microsoft today reiterated what Google CEO Eric Schmidt told agency executives Tuesday at the Leadership Conference of the American Association of Advertising Agencies here: We’re here to help you, not replace you.

Notwithstanding the significant investments they’ve made in advertising and their direct interaction with clients, Yahoo! president Sue Decker and Microsoft’s Brian McAndrews positioned their companies as technology resources that make the Internet easier for consumers and marketers through new tools, systems and methodologies.

In short, they’re concentrating on the science of understanding consumer behavior on the Web while agencies focus on the art of creating impactful brand messages.

“With the digital revolution becoming more and more about science, it will continue to be about art, but science is becoming more and more important,” said McAndrews, svp, Microsoft Advertiser and Publisher Solutions. “We can really help take what is a very complex world and make it more understandable and simpler.”

Decker, who substituted for Yahoo! co-founder Jerry Yang in a question-and-answer session steered by Digitas CEO David Kenny, said: “We need to take the difficulty out of the process of finding the inventory, booking it, reconciling it, all sort of the boring parts of the industry — we need to automate that. The reason we need to do that is to free up time and unleash the ability of the industry to go create great creative messages.”

She added that a significant part of Yahoo!’s business comes from agencies and that the goal of interacting with clients and “all the members of the ecosystem” is to better understand the company’s core consumer.

Yang canceled his appearance to be with his wife, who gave birth this week. Decker briefly acknowledged the ongoing big news of Microsoft’s offer to buy Yahoo! (which Yahoo! has thus far spurned) but didn’t get into particulars. McAndrews didn’t mention the deal attempt.

Other speakers on the final day of the conference — the first under new president and CEO Nancy Hill — included Select Resources International CEO Catherine Bension, who talked about client expectations; Goodby, Silverstein & Partners’ Jeff Goodby, who reflected on the legacy of the late Hal Riney; and Anton Levy, managing director of General Atlantic, a private equity firm that last year invested in digital shop AKQA. Leaders from Anomaly, Fletcher Martin and Bartle Bogle Hegarty also put forth ideas on how to forge new compensation arrangements.

Levy said private equity firms remained interested in the marketing communications sector but the recent credit crunch had turned what had been a seller’s market into a buyer’s market. Asked about the prospect of such firms making a run at an advertising holding company, Levy said it was an interesting question but that he didn’t anticipate any such deals given “a lot of headwinds,” such as the tightening of credit. Rather, these firms may opt to make minority investments in holding company assets instead, Levy said.

Levy acknowledged that the economic downturn would have a significant impact on deal making that will likely continue into 2009: “Our view is that things are likely to get worse. I think we are in a challenging environment that’s putting a strain on the consumer. . . . That’s not a one or two quarter phenomenon. We’ll see that play out through the balance of this year, early next year.”

Notwithstanding the generally sour economic forecasts, incoming 4A’s chairman Tom Carroll ended the conference on a broadly optimistic note, saying, “We’re right in the middle of it all. It has to come through us. For our clients, [for] consumers, we’re right in the intersection of this incredibly dynamic change. And it’s something to be excited about.”