FOOA and the Future

Erick Schonfeld (Business 2.0) Panel: ‘What is the future of interactive advertising?’ Jim Larrison (Adify), Chan Suh (Agency.com) Alex Blum (Kick Apps) Hilmi Ozguc (Maven Networks)

Q: $5billion/quarter in adsonline. Are we due for a correction?
Chen: no. not even close to what it will be next year.
Hilmi: just getting started.
Alex: look at the upfronts..they are flattening out, the ad dollars are going elsewhere and they are going online

Q: you are seeing spend shift online, is this advertising chasing a fad? are they not satisfied with TV return or is there something to be said for the effectiveness of the inventory.
Chen: we do all sorts, some direct, some brand awareness. for direct, you can measure and advertisers are looking for clarity about what works. not ness dollar for dollar comparison, they are atrracted to amount of info they can have.
Alex: advertisers want to create an engaging relationship with their consumer; Neilson tells them noting about this but online deepens the relationship

Q: my experience has been random ads nothing to do with page never mind the person I am.
Jim: it’s a response from moving from direct response to brand advertising, so a function of how can you consolidate this inventory.

Q: what’s the next big growth area? video, widgets
Hilmi: tv has been the major driver for the last 50 years and video is a great expression and now we have the ability to wrap the online with the tv through the video.
Alex: with social media and end users interaction with SM experiences it is very easily to learn about people, build profiles of people, combined with page content get better targeted ads.

Q: tracking consumers is one thing, what will be the privacy concerns once users cotton on to this. how do you balance the targeting against the spying on.
Alex:that;s why clickpath is not as good…with social media you are declaring this to the world, I’m putting information out there that I am happy that people know about it. thus can be sued to deliver a more relevant ad.
Chen: SM info is tacit permission, but how do you scrape page of those sites to deliver ads. As a buyer, I need to buy 1.5-2b impressions for ebay each month. I don’t have time to figure out trends and investigate; I need to get results today. Simple fact is that advertising today is a version of advertising that we have been doing for decades offline. So what are the form and function of effective ads. we need to understand the cultural impact and flip it. You can use different things..eg 3d images of sheep running round a room that you can interact with. You need to target
Jim: behavioural targeting was invented by publishers. They need to get better in aggregating the inventory and the audience

Q: on the ad units, what are the most effective and interactive?
Alex: this is a limiting question; we are also not just repurposing older ad methods, we are opening up the media and the platform. Take a look at Axe and how people are submitting video and blogging etc. In traditional ads this reach would have cost millions,

Q: the key word is interactive. We have been talking about a broadcast model. how can advertisers engage audiences and create relationships. Can the Stormhoek model work with a bigger brand
Chen: it can help. Look at Virgin Airlines naming planes. SM is a way for a dedicated brand to build a relationship. Is the ad unit the right way to look at this? But how do you price the rest of the the stuff. As an agency I would love for the content providers to offer to get influence and it will cost this. I’;d love to investigate this further

Q: so what will an ad look like in 2010
Hilmi: the replacement of the instream 15′ with a richer unit, interactive, allows short and long form, draws you in and gets you to interact with a specific call to action. By 2008. A very significant way of taking impressions and turning them into a relationship.
Jim: Entertainment – an ad unit will be more around entertainment and a distribution channel. It will be a resource or a service. Or just integrated generic content.
Alex: it’s going to be an online expression of your lifestyle, customised to you.
Chen: like a incredible partner, that flexes with you and knows where you have come from and what state of mind you are in based in behaviour and can provide information, storytelling or action based on what the user wants. there is too much temptation to just treat users as eyeballs.

Q: I talk to a lot of companies with recommendation engines for content..that can also be used for ads.
Chen: the only difference is perception. Rec engine has he reputation of being neutral
Alex: the underlying technology is pretty similar. it’s the presentation.

Q: Why are interactive video ads effective?
Chen: we used to have a unit in Europe…it was not viable back them and still back then. If you are a creative content person you have to make a decision about selling out. The advertisers are looking at either adjacency (like tv) or participation in the content. Is there something better than product placement?

Q: is ad buying going to be automated?
Chen: this will be a trend I think; the ad networks and consolidation will be great for CPM but not ness for cost per influence. we are not cut out to do it not sure who.
Q: it;s all tech companies owning ad networks..what happened to the concept of a neutral marketplace
Alec:we will continue to apply technology; we will go to the Quants of the world. we look at heavy data mining to deliver effective ads. the networks need to differentiate themselves, need to provide a series of services to the publisher.
Q: can this be automated?
Chen: yes. There’s a lot of networks and I have to do a lot of manual shifting analysis and there are few tools that help me do this. A platform neutral tool to do this would be great.

AudQ: what is the one piece of advice for a publisher to attract advertisers?
Alex: you need to stand for something; needs to be around a theme or vertical, so the audience is attractive to an advertiser.
Jim: get in a network to get enough volume to be attractive

AudQ: there’s an industry based around ad avoidance? How much harm are we doing when we piss off the audience?
Hilmi: Yes. we should not repeat mistakes form the past; don;t force it. Make it more relevant. Interesting.
Jim: users will move and shop elsewhere. ifilm had preroll…then YT with no ads buried them. you will lose your business.

AudQ: we love ajax etc. CPM has refresh inbuilt – but page refresh stops.
Chen:” I think ajax is great, a rock thrown at a glass wall, Advertising needs to be something other than pages. It needs to take different creative forms. we are not quite there yet; we do all we can to get attention. Go beyond the initial glance, we need to improve and build

AudQ: isn’t the first step to address the inefficient conversion model? Can display ever be as effective as search?
Hilmi: advertising has multiple goals; for branding then rich media is better; direct then search is more effective,

AudQ: when does the internet make the traditional TV experience redundant.
Hilmi: not going to go away. more and more tv will be internet connected and it will be transparent to the user where the tv comes from. internettv will just be tv. The web will fade into the background
Chen: the user won’t differentiate that much…the level of interactivity will be customer choice. just watch the show or have the full buttons and twinkles and buddy list.

AudQ: online ads..will this evolve back into the offline world?
Chen :that is where we are going and trying to figure out. There a lot of experts now looking at online and offline. there will be little difference btw online and offline agencies – they will just be an agency.
Erick: how do you take the info from online and add it to the offline?
Chen: technology…
Erick: of the media is not connected then you cannot do this…
Chen: tv will be connected. we need to know what mode people are in and serve up ads in multiple modes.