Randall Rothenberg: September 2007 Archives

IAB's MIXX Makes the Blogs!

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blog-header-rr.gifThe Interactive Advertising Bureau’s sold-out MIXX Conference & Expo was blogger-friendly this year, and “citizen journalists” had a field day, especially with the on-stage fireworks among agency and publisher executives. Herewith, a wrap up with links:

On the Ogilvy-Carat-Publicis “Showdown”
Gale Executive Recruiting: In the MIXX: The New Strategy: “The Interactive Advertising Bureau’s MIXX 2.7 Conference and Expo opened with a bang, as three industry heavyweights squared off in a panel discussion about how best to organize creative and media shops for the digital age. Carat Americas CEO David Verklin came down on the side of full integration. “Digital media has to be the core of every strategy,” Verklin argued, suggesting that this could not be accomplished without the top to bottom integration of digital and traditional approaches to creative and media buying…”

Agency Spy:
“Gary Leigh, Chairman and Chief Executive of Ogilvy UK, has some thoughts about the digital program over at the death star agency, which echo Ogilvy co-CEO Carla Hendra’s comment during her public spat with Carat Americas CEO David Verklin on the opening panel at IAB’s Mixx Conference…”

On Interactive Industry Consolidation
Revenue Source: Yahoo Unenthused About Google, DoubleClick: Color us with the ‘unsurprised’ crayon, neither Yahoo nor global advertising power WPP want to see Google walk away with the queen of the ad network homecoming ball.

Insider Chatter: Google to Marketers: Give Us ALL Brand Assets, For Eternity: While Microsoft takes $6 billion aQuantive aim at Google’s ad supremacy, Mountain View is digging in its online advertising heels, eagerly creating a Google stranglehold over brand marketers. In New York City this week, from OMMA to MIXX, all levels of the Googleplex totem poll were represented and all faithfully conveyed CEO Eric Schmidt’s favored notion that the advertising “power law” is in Google’s powerful favor.

On Amex CMO John Hayes Call for Collaboration
Adranium: Digital Teamwork? “The move to digital media is proving startlingly complex for marketers and agencies, pushing the need for increased coordination and collaboration among the many parts of the marketing ecosystem. That was the conclusion voiced at the opening sessions of the MIXX Conference, which the Interactive Advertising Bureau is holding here as part of Advertising Week. In an opening keynote, American Express chief marketing officer John Hayes said the many facets of digital marketing is forcing his company to insist on collaboration with and between its agencies…”

Useful Lunacy: “Lesson learned. Finally. According to a piece on Adweek.com today, this whole digital marketing evolution that’s been transpiring for at least the past 10 years is — wait for it - changing the way advertisers and marketers work together… That was the conclusion voiced at the opening sessions of the MIXX Conference, which the Interactive Advertising Bureau is holding here as part of Advertising Week… It’s good to see the advertising and marketing industries are finally figuring this out. For a second there, I thought I was reading The Onion, not Adweek .”

ON: Digital + Marketing: “I spent the day at the Mixx conference for the most part of the morning. I will say that if you are a person who spends her/his time at the leading edge, walking the floor of the Expo was not where the action was. As a matter of fact I would say it was a line up of the usual suspects. That said, the workshops and the opening remarks made the Microsoft rubber chicken worth while…”

Speeple: “This the first morning KeyNote sessions, from John Hayes, CMO, Amex. As always, slightly paraphrased. I was extremely impressed by what he had to say, hitting many of the truths that are said about the marketing company and really believing them.”

On What WPP Thinks About Google
Adfreak: It sometimes seems like the specter of an all-powerful Google is never far from the braintrust at WPP Group. Sir Martin Sorrell, after all, memorably labeled the Internet giant as a ‘frenemy.’ Now the Google juggernaut is taking on a celestial role. During a panel at yesterday’s MIXX conference, WPP Digital CEO Mark Read was asked one of those impossible conference questions…”

On the Seth Godin-Charlie Rose Keynote Interview

Technology News Blog: At Mixx, Seth Godin pimps Squidoo
: “I’m at the Mixx 2007 online-advertising conference here, marveling at the brazenness of author and entrepreneur Seth Godin. “How do we use this medium in the way it wants to be used?” he asks, as he’s interviewed by Charlie Rose. He’s speaking, of course, about the Web, but he might as well be talking about the medium of the conference stage. And he’s using it to promote his new website, Squidoo…”

On Interactive Political Advertising
Dawn’s Media Blog: According to the article “Political Candidates Stick to Traditional Media” published in MediaWeek, political candidates from both parties are demonstrating a stubborn devotion to traditional media, along with a cautious streak that is holding them back from truly embracing the Web as an outlet for political ad dollars. Even though Americans’ media habits are rapidly changing a group of panelists that spoke during the Mixx Conference predict that most spending will remain on TV and other tried and true outlets. Richard Kosinsi, vp of political advertising estimated that most candidates were planning to spend around one percent of their total media budgets online, versus the seven percent that most mainstream brands typically spend on the medium.

On the Crowd
Adverganza: “After the Ad Club of New York luncheon (see below), I decided to stop by the Interactive Advertising Bureau’s MIXX Conference at the Crowne Plaza in Times Square, and though I sat through a fairly engaging panel on “Content without Borders” (I’m a geek—what can I say?), the most interesting thing about the conference was how completely packed it was…

Futuristic Play by Andrew Chen: 5 differences between a NY ad conference and a SF web 2.0 conference: “Just a couple random observations from my first day at MIXX, which as a NYC advertising conference, is probably exactly the opposite from a SF web 2.0 conference…”

On Microsoft & Facebook
News and Stuff: “Microsoft is wearing its social media heart on its sleeve this week. The software company is in talks to acquire a stake of up to 5 percent in Facebook, the social networking site, the Wall Street Journal reported today. A look at Microsoft’s booth at the MIXX conference and expo this week at the Crowne Plaza Times Square shows how much the company is flirting with social networking…”

Uwe’s Blog
: “Still more than 3 days to go but the highlight of Advertising Week took place today at the MIXX Conference: Charlie Rose interviewing Seth Godin. A few topics covered: Advertisers can’t act as terrorists anymore and hold consumers hostage…”

On Creativity Online
Shift Market: Mixx snippet — Kraft & Avenue A: Awesome validation from the Mixx 2.7 conference.

On the Halo 3 Debut
License to Roam
: “I just won an Halo3 Xbox and a copy of the Halo 3 game at the MIXX IAB conference I’m at (put your card in the bowl and see what comes out)…”

IAB's MIXX Makes News!

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blog-header-rr.gifApologies to those of you who couldn’t get in to the Interactive Advertising Bureau’s sold-out MIXX Conference & Expo in New York Monday and Tuesday. You missed fireworks on multiple topics, from the consolidation activity roiling the ad and media industries to the “business model wars” among agencies. Herewith, a wrap up with links:

Ogilvy, Carat CEOs Clash on IAB Panel: Carla Hendra, David Verklin Spar Over
Agency Structure at MIXX Conference
September 24, 2007
— Sparks were flying between Ogilvy North America co-CEO Carla Hendra and Carat Americas CEO David Verklin on the opening panel at IAB’s Mixx Conference. And no, they weren’t those kind of sparks. (Ad Age) (Click here for video)


Single-agency strategy does not fit all, IAB panelists say
New York—In the new age of digital media, marketing strategy needs to be orchestrated, but agency executives on a panel Monday morning at the Interactive Advertising Bureau’s MIXX Conference & Expo 2.7 diverged on how to find the perfect harmony… (BtoB)

Yahoo, WPP join Microsoft in questioning Google-DoubleClick merger
Microsoft isn’t the only one questioning whether a Google-DoubleClick merger would be good for advertisers and consumers. During a panel on The Changing Landscape at the MIXX 2007 Interactive Advertising Bureau (IAB) conference in New York on September… (ZDNet)

The Advantages Of Consolidation
September 24, 2007 - Just made a quick sprint from OMMA’s Ad Week conference at the Hilton New York to the MIXX 2.7 Conference at Crowne Plaza Hotel to hear the NY Times’ Saul Hansell moderate a panel consisting of participants in the past year’s interactive ad agency buyouts, including executives from DoubleClick, 24/7 Real Media, Right Media and aQuantive unit Atlas. Hansell started out asking what the benefits of their respective combinations will bring to both companies that couldn’t have been achieved separately and moved on to survey the panelists as to whether regulators should approve the pending $3.1 billion merger of Google (NSDQ: GOOG) and DoubleClick… “(Paidcontent.org)

Top DoubleClick, Atlas, Right Media and 24/7 Execs Take Friendly Jabs at Event
Sept. 25, 2007 - Top execs from recently-acquired interactive ad industry firms purchased by Google, Microsoft, WPP and Yahoo engaged in friendly sparring yesterday. During a panel discussion at the Interactive Advertising Bureau’s MIXX conference in New York, heads of 24/7 Real Media, Atlas, DoubleClick and Right Media talked, sometimes surprisingly frankly, about industry consolidation, potential blockage of Google’s DoubleClick acquisition, and potential conflicts of interest resulting from this year’s million and billion dollar buyouts. (ClickZ)

Goodby, Silverstein Nab MIXX Honors
September 26, 2007 - Goodby, Silverstein and Partners was the big winner at the third annual MIXX awards presentation held on Sept. 26 in New York, as the San Francisco, Calif.-based agency took Best In Show honors for a rich media campaign for Hewlett-Packard, as well as pair of “gold” awards for Rolling Rock in both the Digital Video and Viral, Word of Mouth and Peer to Peer Marketing categories. (Mediaweek)


‘Computer is Personal Again’ Honored in IAB MIXX Awards
September 26, 2007 - Last night in New York City, conference attendees witnessed the presentation of the IAB’s third annual MIXX awards. These accolades draw attention to outstanding merit specifically in interactive advertising, with dual regard to creativity and effectiveness. The major honor, Best in Show, was awarded to Goodby, Silverstein and Partners, SF for “The Computer is Personal Again” for Hewlett-Packard. This campaign was perceived as the most successful effort in years on behalf of the computer brand. (Vox)

IAB Calls Slowing Online Ad Spending Growth “Torrid”
September 25, 2007 - Online ad spending has grown at “a torrid pace,” 26.8 percent, during the first half of this year over the same period last year, Randall Rothenberg told a packed crowd at the Interactive Advertising Bureau’s MIXX conference in New York yesterday. The IAB prez said spending hit the $10 billion milestone in the first half. “This is the first time in history this has happened,” he gushed. (ClickZ)

Cross-Platform Deals: A Return to the TV Advertising Future
September 25, 2007
- Now, it seems the widest form of cross-platform media deals now comes with just two platforms: TV and the Internet… Still, there are mountains to climb — especially in other media areas. Tom Wolfe, vice president of product marketing & promotion for Comcast Spotlight, said on Monday at the MIXX conference: “Everyone wants to be a pioneer. But not without metrics.” Is that a slap at those Internet metrics, which may or may not be good enough at the moment? Perhaps other media is lacking…” (Mediapost)

Cross-Platform Deals Evolving Slowly From Theory To Practice

September 24, 2007 - The notion of cross-platform ad selling has gone from theory to reality, with agencies breaking down the structure separating TV, print and online. A mid-afternoon MIXX 2.7 Conference session looked at the process of matching sales between a variety of forms are evolving. So while agencies and programmers have been working to revise their structures in a more media neutral way, the challenge is turning individuals to think along those same lines. Moderator Scot McLernan, former ad sales exec at Marketwatch when it was owned by CBS (NYSE: CBS), explored the nature of the dealmaking. (Paidcontent.org)


Political Candidates Stick to Traditional Media
SEPTEMBER 25, 2007 - Political candidates from both parties are demonstrating a stubborn devotion to traditional media, along with a cautious streak that is holding them back from truly embracing the Web as an outlet for political ad dollars, according to a group of panelists speaking during a Mixx Conference session held on Tuesday in New York. (Mediaweek)

MIXX: Presidential Campaigning: Digital Media’s Impact
It will come as no surprise that all the major 2008 presidential candidates have an interactive presence. With the use of news, video clips, and of course the all important donations section, this highly charged political election and digital innovations is something that marketers can also take advantage of. Hear from key representative from presidential campaigns on the use of interactive in driving awareness and creating buzz for candidates. (Behind the Buzz)

MIXX: Audience Counting Blues
September 25, 2007 - Will Web measurement companies ever churn out audience data that can be easily compared? Don’t count on it. Executives from comScore, the Nielsen Co., HitWise, and Omniture at the Interactive Advertising Bureau’s MIXX conference said Monday they will continue to fine tune how they collect, track, and analyze Web site visitor data and pointed out differences in their methodologies. (ClickZ)

IAB’s MIXX Conference Kicks Off Advertising Week With Visions of Digital Future

September 26, 2007 - Attendees of the first day of the IAB’s (Interactive Advertising Bureau’s) MIXX Conference & Expo, which kicked off Advertising Week on Monday in New York, came away with an appreciation for where digital technology is taking us — if they attended the entire day’s events, that is. Two of the sessions offered insights into exactly where we’re going. In ‘Content Without Borders,’ one of the afternoon track sessions, attendees learned how marketers are taking advantage of new platforms and technologies to extend the reach of branded content… (ShootOnline)


The Expansion - Or Is It Contraction? - Of The Journalist/Blogger Divide
In the final MIXX 2.7 Conference panel of the day, Newsweek’s Steven Levy sought to gauge the changes blogs have had on the journalism space. Scott Meyer, president and CEO, About.com, said that the NYT-owned info-guide falls squarely within the realm of reportage. “What we do is journalism, but we don’t hire people because they’re journalists. About began as user-generated content and it’s evolved. We hire people because they’re experts, such as, they’re a doctor. It’s one space over from what the NYT does. The space isn’t destroyed or ruined by this. The space expands.” (Paidcontent.org)

LittleMissMatched: Seth Godin at MIXX Keynote
September 25, 2007 - If marketing is all about storytelling, then you’d better build a product that’s worth talking about. Seth Godin points to LittleMissMatched, socks targeted at 12 year old girls. The company is “tripling in size each year.” Why? Because they made socks that make girls say something very powerful to each other… “Want to see my socks?” What’s remarkable about the socks? They come 3 to a pack and none of them match. (Boston.com)
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How are politicians using Web. 2.0? At our political marketing panel at MIXX, Arianna Huffington — author, political candidate, and the provocative founder of the online site The Huffington Post — reported that they are not. Many of the digital efforts the candidates announced with fanfare earlier in this campaign have disappeared, two Huffington Post reporters have found.

“The Edwards campaign started to do that — hired somebody who was going to do webcams,” Ms. Huffington told the crowd at the Crowne Plaza Hotel. “The idea was, ‘We’re not only going to capture Edwards when he’s coiffed and ready.’” Now, her reporters discovered, “These weblogs can’t be found anywhere. The campaigns have scrubbed them from the Internet. After tremendous effort we were able to find one of them. What happened? Were these efforts to make candidates more authentic really dangerous? Why did they take them off the Internet?”

It was but one newsworthy finding exposed by the panel, which was expertly moderated by Slate editor-in-chief Jacob Weisberg. Political marketing, for decades, used to lead product marketing. Many contemporary commercial marketing techniques, notably the mobilization of zealots at the grass roots, migrated from politics into the commercial space. That migration has reversed.

“The perspective of a lot of the folks running the campaigns is not of the Internet,” said Rob Shepardson, founding partner of the SS+K ad agency in New York, and an advisor to the Obama campaign. “I’m not sure this is the Internet election. There’s been nothing terribly innovative so far.”

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Interviewer extraordinaire Charlie Rose interviewed Seth Godin, the first management guru of the interactive era, to open Day II of the 2007 MIXX Conference & Expo. It was the ultimate MIXX — the video chronicler of thought leadership together with a man who says the era that allowed Charlie to thrive is over. And the crowd was enthralled for the entire hour.

One thing I’d like to say about Seth: I’ve known him for about eight years, and there is not a time I’ve gotten together with him that I haven’t walked away with an actionable idea that I put into play — and which improved my life and my business. He is a walking encouragement to try new things. And when you make the leap, you benefit.

A Consolidation MIXX-Up

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There were fireworks on stage during the second panel of the day at the IAB’s MIXX Conference. For the first time ever, we brought on stage the leaders of four of the largest, recently announced acquisitions: David Moore, chairman and CEO of 24/7 Realmedia (acquired by the WPP Group); Karl Siebracht, president of Atlas (whose parent company, aQuantive, was bought by Microsoft); Mike Walrath, founder and CEO of Right Media (acquired by Yahoo); and — pictured here — David Rosenblatt, CEO of Doubleclick (being acquired by Google). As moderator Saul Hansell, the New York Times technology writer and blogger, noted, “That’s $10 billion of market value in one place.”

What does $10 billion of market value do in a conference room? Promote, attack and defend. The four leaders disagreed on whether Google’s acquisition of Doubleclick is a good thing; whether automated advertising exchanges will help or hinder marketers; and whether media companies acquiring ad networks are too self-interested for their own good.

But they agreed on one thing: That consolidation — certainly their own consolidation — is good for everyone.

“I see more and better innovation coming faster,” Mr. Rosenblatt said. To understand all these deals, the word is liquidity. If you ask advertisers about their bigger challenges in moving dollars from offline to online, its the absence of standards; it’s ability to target; and it’s the need for lower prices across a wider range of media products.”

With consolidation, he argued, “You’re ending up with four or five pools of inventory or liquidity, and that liquidity allows these problems to be solved. Like the stock exchange. That’s the problem all these companies are pointed out.”

Although his co-panelists agreed, none was willing to step forward when Mr. Hansell asked how many supported Google’s purchase of Doubleclick. Ever the Timesman, the moderator became more direct in his questioning. He turned to Mr. Siebrecht and asked, “The bad thing we should all be afraid of is…?”

“The quick way to answer,” the Atlas president replied, “is there are implications to market concentration in any market… if one player gets too much control and has the ability to extract rents.”

Mr. Rosenblatt looked at the crowd. “There’s no irony in this at all.”

But there was: His own.

Digital Is the Fulcrum

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blog-header-rr.gifCarat CEO David Verklin put an early exclamation point on the morning’s conversation at the 2007 AB MIXX Conference & Expo. “I think for traditional media to thrive in the future, digital has to be at the core of the strategy,” Mr. Verklin told the packed room at the Crowne Plaza Hotel in midtown Manhattan. “The market has shifted so much, so rapidly. We need to come to a place where we do the communications plan first. The hottest word in the advertising business today is ‘media mix.’ The media plan of the future will be more complicated. And digital has to be the core of the strategy. More and more, we’ll be taking things like television and driving consumers to the web site.

“I’d argue to marketers in the audience today” Mr. Verklin added, “that you’d actually want to drive them web site before you drive them retail.”
blog-header-rr.gifAmerican Express CMO John Hayes opened the IAB’s third annual MIXX Conference & Expo with a message that underscored last night’s post. “The key element of the framework we use at American Express is recognizing that the world is in the middle of an ongoing conversation,” Mr. Hayes said… In order to enter the conversation today, you must work in an open environment, you must collaborate.”

That’s the theme of MIXX 2.7 — and, indeed, the operating strategy for the Interactive Advertising Bureau. As I posted last night: In an always-on, digital, interactive communications environment, marketing value – now and forever – derives from the “mixx” of strategy plus channel plus content. And that, in turn, requires new forms of collaboration among marketers, agencies, and media companies.

The first panel of the day agreed. “We’re moving into an age of facilitation,” said Rishad Tobaccowala, CEO of Denuo and Chief Innovation Officer of the Publicis Group. Clients want companies that are collaborative, iterative and always learning.” (To laughter, he described DeNuo as “misfits in toyland – 15 of the wierdest people we could find.” He also said its the most profitable part of Publicis, which allows them to hire the best talent.)

David Verklin, CEO of Carat Americas, told the audience that the importance of collaboration was the reason he tore down the walls in his agency and united its North American unit and its digital unit. “We saw the rise of RGA, Avenue A, others. Our two agencies, our offline agency and our online agency, collaborated really well. But at the end of the day you could only take it so far as two separate companies… Clients were saying, ‘You proved it to me. Now, we want you to manage the business as one, for us.’

“Ladies and gentlemen,” Mr. Verklin told the sold-out crowd, “when you have two separate agencies, its not integration, its synchronization.”

Carla Hendra, co- CEO of Ogilvy North America, agreed. “At Ogilvy, we have had for a long time a business strategy called ‘360-degree brand stewardship.’ Digital has just made that strategy more seamless and more appropriate.”

MIXX MESSAGES

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The Interactive Advertising Bureau’s annual MIXX Conference & Expo - dedicated, with a little linguistic handiwork to Marketing Innovation and eXXcellence — is a two-day cavalcade of 100 digital stars. But it has a single theme, which I’d like briefly to explain and explore:

In an always-on, digital, interactive communications environment, marketing value - now and forever - derives from the “mixx” of strategy plus channel plus content. And that, in turn, requires new forms of collaboration among marketers, agencies, and media companies.

Let’s parse that statement, starting with the concept of marketing value. It’s a commonplace that for much of its first century, advertising’s worth was essentially unknowable. “Does advertising increase demand for a given firm’s products?” asked Harvard Business School Professor Neil Borden in his classic 1942 text, The Economic Effects of Advertising. “Indeterminate,” he concluded. Does it preclude price competition? “In no case,” he wrote. So for all its supportive research, advertising in the 20th century was largely a “faith-based initiative,” as I and Booz Allen Hamilton consultants Chris Vollmer and John Frelinghuysen wrote a few years back:

…With ad agencies and clients alike believing it worked best when it raised awareness of brands and goods across a large swath of a target population, with success calculated using various survey-based input measures, such as page impressions; cost-per-thousand viewers or readers; and gross ratings points (GRPs), an indicator of audience size. Volume was the highest value. Rosser Reeves, head of the Ted Bates ad agency, voiced the prevailing view this way in 1960: “If 90 percent [of the audience] do not remember it, the story is not worn out.”

This center could not hold, for many reasons. As the U.S. economy matured, then fell into repeated rounds of recession and recovery, corporate owners - which came to include most of us, with our 401k’s and IRA’s - demanded greater and greater returns on invested capital; Finance Departments accordingly marched through corporate units demanding accurate calculations of return on investment. Real estate, sourcing, logistics, and human capital fell under scrutiny. It was only a matter of time before marketing expenditures were held to the same standards as all the other functions.

As this was occurring, the first round of advertising agency megamergers started taking place, exposing for the first time the enormous profit margins agencies earned from their clients’ ignorance. When in 1986 the U.K.’s Saatchi brothers bought The Ted Bates Agency - fittingly, the agency built on Rosser Reeves’s theories of repetition - Bates’s chairman and CEO, Bob Jacoby, personally pocketed $111 million. The windfall clearly exposed the entire agency business. “We may stand today looking more like hucksters than when Frederick Wakeman wrote the book more than 25 years ago,” lamented the president of the American Association of Advertising Agencies, Leonard Matthews.

Into this rising demand for ROI and accountability rode the Internet, with its promise to banish advertising unknowability and waste. “The Net is accountable,” I wrote in Wired in 1999. “It is knowable. It is the highway leading marketers to their Holy Grail: single-sourcing technology that can definitively tie the information consumers perceive to the purchases they make…The new media technologies, by drastically reducing production and distribution costs and making possible almost continual and instantaneous refinements in message, promise to increase the efficiency of accountable advertising so that its widespread adoption, not as an ancillary medium but as the primary communications choice, becomes inescapable.”

Quest for Solutions

But even this rosy view of advertising’s accountable future missed what was really happening among consumer and product marketers: They were becoming less and less interested in buying marketing communications products, which increasingly they perceived as a commodity. Instead, they wanted their suppliers, agencies and media companies alike, to bring them solutions.

A solution, in the words of two other former Booz Allen colleagues, Chuck Lucier and Jan Dyer, is when “a supplier takes responsibility for value-added integration, using its superior knowledge to integrate and sell an interdependent system of products and services.” Needless to say, the primary problem marketers in a mature economy like the United States want to solve is how to grow. Marketing teams, in turn, want their suppliers to help them climb the ladder to growth, by bringing them consumer insights, establishing and maintaining dialogues with consumers, engaging the audience with unique content relevant to their needs and desires, and by reaching them at exactly the right moment with the right message.

This quest for integrated solutions - and the call for help in finding them - sounds through the recent book CMO Thought Leaders: The Rise of the Strategic Marketer, published by Booz Allen and the Association of National Advertisers. “What’s changed,” Procter & Gamble CMO Jim Stengel told me in an interview for the book, “is that the engagement level we can have with our consumers is just so much higher. We can have a two-way dialogue, a relationship. That means we will need more brand-enhancing, consumer-enhancing dialogue in more of our businesses. It’s a different skill set—with different capabilities—than we required in the past.”

American Express Co. CMO John D. Hayes - our keynote speaker on the opening morning of this year’s IAB MIXX Conference - put the distinction between commodity advertising and solutions-based marketing even more starkly. “The world is in the middle of an ongoing conversation,” Mr. Hayes told us. “A marketer’s challenge and job is to enter that conversation. And when you do join in, you had better be prepared to add value. If your attitude is, ‘We’re going to pound away with this many GRPs talking about our new product,’ all you’re doing is interrupting the conversation. People don’t like that.”

Solutions are, first and foremost, a service - and a very complex service at that. They require a sophisticated knowledge of the customer’s business, deep analytic skills, and the flexibility and willingness to combine, apply, even customize, varying sets of assets and capabilities on behalf of the customer’s needs. This is a far cry from what advertising agencies, even in their heyday during the first Creative Revolution, saw as their mandate. They wanted to be known for their creativity, and creativity was defined narrowly - as the manufacturing of a pre-formatted marketing-communications product (notably a 30-second television ad and the magazine page) known for its attention-getting cleverness.

Jim Durfee, a co-founder of the Carl Ally Agency, once explained the distinction to me. “A product,” the courtly Mr. Durfee said, “is something that is molded, produced, thought out and set out before the person: ‘We have made this for you, we think this will help.’ A service is hat-in-hand and through the side door. It was a completely different attitude toward what an agency was and what an agency made.”

Commoditization vs. Integration

Hence the second part of our MIXX Conference’s theme: that marketing value derives from the “mixx” of strategy plus channel plus content.

However clever, any product as narrowly defined by its formats and the sameness of its content as was conventional advertising is subject to commoditization. And that is what has happened to advertising. The routines - of marketers providing briefs to agencies, which rendered those briefs in a set of familiar formats, distributed over seven “measured media” with standardized content forms - grew tired. The industry even accepted its exhaustion. Its language has long been the language of commoditization: Agencies and media for decades have spoken of tonnage - of, as Amex’s Mr. Hayes put it so disparagingly, pounding away with GRP’s. Even the brass ring reached for by so many top creatives - success in “cutting through the clutter” - accepts commoditization as the environment in which it exists.

By contrast, the notable efforts in interactive advertising have been sui generis, unique applications of an idea to a channel, realized through singular content. Whether it’s the user-generated Super Bowl campaign for Dorito’s, the “Obama girl” guerrilla video for the Democratic presidential candidate, or the even more aggressively political “Campaign for Real Beauty” by Ogilvy & Mather and Edelman Worldwide for Dove soap, the best interactive advertising brings a strategy to life in a way that cannot readily be replicated.

Commodity or tonnage advertising will continue to exist. It will remain an important weapon in the arsenal of marketers and agencies, if for no other reason that regularized formats are an efficient means for communicating to a disinterested or moderately interested audience that might be lured to a brand, product or service. Its efficiency will only increase as behavioral targeting in interactive media succeeds in weeding out the disinterested and improving accountable returns for such advertising.

Even more efficiency will be brought to commodity advertising through process automation - and the Internet is a giant process-automation machine for advertising. Indeed, much of the recent wave of consolidation in interactive media and advertising - the acquisitions of 24/7 Realmedia by the WPP Group, Doubleclick by Google, AdECN and Aquantive by Microsoft, Tacoda by AOL, and Right Media by Yahoo - can be looked at as an effort to bring more process-automation efficiencies to major media companies.

On the surface, these look like (and are) very different companies - advertising pricing exchanges, ad networks, third-part ad-serving companies - but they all share one basic characteristic: They mechanize parts of advertising buy-sell processes, notably in planning, pricing, and placing, that previously were handled by humans. And they scale those processes to heretofore unthinkable dimensions. (Our second panel on the first day of MIXX, featuring the chiefs of 24/7 Realmedia, Doubleclick, Atlas, and Right Media, will explore some of the implications of consolidation and process automation in advertising.)

But, while machines may automate routine tasks (however complicated they may be), they can never automate the core components of the solutions clients really want. They cannot tell a CEO or CMO how to grow her business. Although they can aid, they cannot fully mechanize brilliance, intuition, engagement, insight, and joy. As another former colleague, George Johnson, wrote today in The New York Times: “What is spreading through the Web is not exactly artificial intelligence. For all the research that has gone into cognitive and computer science, the brain’s most formidable algorithms… have eluded simulation. The alternative has been to incorporate people, with their special skills, as components of the Net.”

The New Strategy

This is the path forward for marketers, media, and agencies alike, and it brings us to the third element of our MIXX Conference theme: That creating marketing value requires new forms of collaboration among marketers, agencies, and media companies. At the IAB, we call this “the new strategy.” It will be the subject of the first panel on MIXX’s opening day, featuring top agency executives Carla Hendra, Rishad Tobaccowalla, and David Verklin.

The importance of collaboration has become a commonplace of contemporary economics. It’s even deemed critical to learn to partner with competitors, a task known as “coopetition.” And here again, the Internet is a large part of the impetus. When information - about the availability of parts, say, or their quality, or their fair price — was hard to come by, firms had an impetus to vertically integrate. Owning knowledge would lower transaction costs, keeping the firm competitive. This theory of vertical integration contributed to the Nobel Prize in economics won by Ronald H. Coase in 1991.

The Internet has made information of all sorts more freely available than ever, with dramatic effect on firms and entire industries. Consider the impact, as described by Rhonda Germany, now the vice president for strategy and business development at Honeywell, and Raman Muralidharan, a managing director of HSBC, in the management journal strategy+business:

The result is industry value chains that are undergoing almost continuous evolution. The morphing value chain — you might call its new form a value web, an extended enterprise, or (our favorite) a value constellation — challenges firms that thrived with a [vertically] integrated approach. The best value-capture mechanisms may now lie outside the individual firm’s boundaries…The firm is shifting from a self-contained value-creation and -capture apparatus into one part of an interdependent community whose members continually negotiate responsibility for value creation and the right to value capture.

Just as the marketing and advertising disciplines could not remain free from the spiral of commoditization, they cannot - and should not - remain aloof from the value of collaboration. The capabilities and skills of marketers, media, and agencies - their differentiated knowledge and skills - must be brought together to fashion the solutions that clients desire.

Keith Pardy, senior vice president of strategic marketing at Nokia Corp., put it this way in the CMO Thought Leaders book. “The ones that learn to collaborate with all the ecosystem partners,” he said, speaking specifically of ad agencies, “are the ones that will survive.”

At IAB’s MIXX Conference on Tuesday, we’ll be showcasing one such ecosystem collaboration: the partnership between Microsoft, the agency Crispin, Porter + Bogusky, and Burger King that created a unique Xbox game for the restaurant company - an effort that won the Titanium Grand Prix at the Cannes Advertising Festival this year.

One such collaboration does not an industry make. At the Interactive Advertising Bureau, we are dedicated ourselves to educating the entire value chain of this new set of realities. Our Leadership Forum: Agency Summit on November 12 in New York will feature even more collaborative case studies by agencies, publishers, and marketers. But we invite everyone in the industry to turn this into a crusade.

I’ll repeat the theme of MIXX: In an always-on, digital, interactive communications environment, marketing value - now and forever - derives from the “mix” of strategy plus channel plus content. And that, in turn, requires new forms of collaboration among marketers, agencies, and media companies.

Do you have examples? If so, please post them. Counter-arguments? We’d love to hear them. MIXX it up — “clog” with us, and change the world of media and marketing forever.

blog-header-rr.gif Advertising Age publisher Scott Donaton informs me that he developed the concept of a “Clog” three weeks ago. Since the pixellated evidence
is there for all to see (and since he was my overly indulgent editorial
overlord for about a decade), I give credit where credit is due.
Besides, the man is not only a creative genius — his company is a
member of the IAB.

blog-header-rr.gif

If you’re a fabulously successful interactive entrepreneur whose last six startups have made a killing in the market and you’re looking for a new place to park some cash, Mike Hughes wants your money.


Admittedly, that sounds somewhat odd, for Mr. Hughes, the longtime President and Creative Director of The Martin Agency in Richmond, Virginia, is highly successful himself. His advertising agency helped launch the ad industry’s Second Creative Revolution in the 1980’s and has been on a tear ever since. Martin’s latest triumphs include its stewardship of the renowned Geico insurance account, and its win (after a controversial and protracted review process) of the Wal-Mart retail account.

Nonetheless, Mr. Hughes wants to pick your pocket — for your own good: He wants to establish the world’s first endowed professorship in interactive advertising at Virginia Commonwealth University’s Adcenter, the first accredited graduate program in advertising to combine academic study of business-communications strategy and brand management with a creative program for art directors and copywriters.

“We’re really trying to teach the next generation of industry leaders, and interactive is by far the fastest growing part of that,” Mr. Hughes, the chairman of VCU Adcenter’s Board of Directors, told me during a recent visit to Manhattan. “There aren’t enough people with experience in digital advertising. It feels to us there should be a program at the Adcenter built specifically to make that happen - to improve education in this area, from media to creative to strategy to brand management. And right now is the time, while the rules are still being written.”

The enthusiasm of Mr. Hughes and his Adcenter colleagues for interactive and its opportunities is of no small import to marketers, agencies, and media. The Second Creative Revolution led by agencies like Martin, Chiat/Day, Wieden + Kennedy, Fallon, Goodby Silverstein, and others transformed the ad industry by making advertising culturally relevant to a rising generation of consumers. Their rebellion regionalized — and then globalized — a business that theretofore had been New York-centric. That combination of decentralization and postmodern edginess, in turn, drew new creative energy into agencies at a time when maturing consumer businesses in the U.S. desperately needed to shake up the way they marketed products and services to fragmenting, jaded audiences.

But during the first decade of the interactive era, the agencies that defined this Second Creative Revolution had their sights trained largely on traditional media. That the shops that imagined their way into the signature campaigns of the 1980s and 1990s are now innovating their way into interactive promises a new creative surge in marketing - and even more intimate levels of engagement with consumers.

“Creatives today have a facility with technology — they don’t need to think about the technology to use it, while for my generation, it doesn’t come naturally,” said Mr. Hughes. Fifty-nine years old, he is a second-generation ad man; his father was a production manager, back in the days when writers wrote copy, handed it over to art directors for a layout and an illustration, and then trafficked it to production heads who would supervise photography, typography and the other components of realization.

“What the new generation of creatives hasn’t necessarily learned,” Mr. Hughes continued, “is how to engage as deeply as we did.”

Which is why the development of an interactive program at VCU Adcenter is so exciting. Inspired and led initially by Diane Cook-Tench, formerly an art director at the Martin Agency, Adcenter was founded 12 years ago to train new generations of agency leadership, inured to the philosophy that creativity, design, innovation, strategy, and brand management - all too typically siloed at marketers and agencies alike — had to be integrated in order to drive business growth. But, as advanced doyens of contemporary marketing understand, it wasn’t until the interactive era that technology not only allowed for but required the full amalgamation of strategy, channel, and content in marketing communications. Hence the emphasis on future media - known and as-yet undiscovered - that has been an emphasis at Adcenter since former Ogilvy & Mather Worldwide Chief Creative Officer Rick Boyko joined it as managing director in 2003.

(For Mr. Boyko, running Adcenter clearly is more than a job: In March, he announced that he and his wife Barbara are contributing $1 million to the school’s development campaign and a scholarship program.)

Integration also has undergirded the growth of the Martin Agency, a 400-person, independent operating unit of the Interpublic Group of Companies, in recent years. In several conversations over the past few months, Mr. Hughes, a warm, bearish fellow with a trace of the South of in his voice, told me that, while Martin had long benefited from its manageable size, it was the arrival of the Geico account in 1994 that changed the game for them.

“We didn’t have a direct-marketing company, so we bought one in New York City, moved it to Richmond, and gave them autonomy,” Mr. Hughes recalled. “The president there said, ‘Wait, there’s an artificial wall between us,’ and eventually we literally broke down the walls and moved them into our main agency building.

“Geico became one of our direct agency’s clients. It was a little government employees’ insurance company from Washington. When we blended our agencies together, we got Geico over here in the main agency. And we learned a lot from the direct people - they’ re much more responsive than main agency creative people. And the direct creatives have learned from general creativity and innovation. Geico - the gecko, the caveman — is the product of that. It’s got sound roots in DR: We have to get the phone to ring and the computer to click. But we have, at same time, created a brand for them.”

Martin’s interactive capabilities benefited from the combination. In the mid-1990’s, when The Coca Cola Company was searching for its first interactive agency, the marriage of audience-gathering creative skills and direct-response accountability persuaded the soft drink maker to give the Richmond shop the assignment to build Coke’s first Web site. Today, interactive is Martin’s fastest-growing division — “by far,” according to Mr. Hughes.

Also integrated and co-located with creative and account management is media. Indeed, even when Martin doesn’t own the client’s media business, media planners are likely to be on the account’s “ownership team.”

“You want to know what’s possible and what’s not possible,” Mr. Hughes explained. “Media planners can bring in ideas that others can’t.” He believes the agency’s commitment to connecting marketing’s blocking-and-tackling disciplines with innovative creative has contributed to Martin’s growth and skein of account wins — including the securing of the Wal-Mart account.He mused about Martin’s resistance to the unbundling of creative and media in the late 20th Century. “We were in an unfashionable place 10 years ago,” Mr. Hughes said. “Now we’re not.”

One might say similar things about the VCU Adcenter that he chairs. While many may have questioned whether an industry fixated around portfolio schools, “killer books,” and “great reels” would beat a path to an accredited master’s degree program at a major university in the heart of Virginia, today its student body of 190 and full-time faculty of 11 attest to Adcenter’s centrality. Endowed chair or not, when its interactive program gets structured and funded - and while they’d welcome your donations, what Mr. Hughes, Mr. Boyko and their colleagues really want right now is your ideas - that importance will only grow. For this is a school that understands the integrated moment that is rocking the marketing world.

“When you get all these people together, divisions start falling away,” Mr. Hughes told me, speaking both of his agency, and of the potential for all agencies as they embrace interactive. “Media people say, ‘You can do this in creative?’ Creatives say, ‘Can you do this in media?’ You start becoming creative in everything. You still have expertise in the room, but everyone is helping everything get better.

“It’s the Bernbach vision of putting art directors and copywriters together in a room,” Mr. Hughes concluded. “Writ large.”