Ad biz in uncharted waters

Companies changing spots in media jungle

NEW YORK — Media consolidation, a fragmented market and a host of new technologies don’t seem to faze today’s battle-tested advertisers.

In fact, buffeted by a tough ad climate and a competitive market, advertisers are prepared to follow consumers anywhere they go, say two titans of the ad industry — WPP CEO Martin Sorrell and General Motors’ exec director of advertising and corporate marketing C.J. Fraleigh.

As featured speakers Wednesday at a Gotham media breakfast sponsored by Booz Allen Hamilton and Variety, Sorrell and Fraleigh, along with moderator Randall Rothenberg of Booz Allen Hamilton, discussed new marketing alternatives in the age of media concentration and TiVo.

Following a cautiously upbeat temperature-read of the current economy — the recession still lingers, but the war in Iraq didn’t hit as hard as predicted because people were prepared — the two ad gurus focused on the challenges facing traditional media channels, all but calling the 30-second ad a dinosaur.

Beyond 30 seconds

“The 30-second ad and print are having far less effect than a year ago,” Fraleigh said. “The result is a growing trend toward product integration, entertainment partnerships and non-traditional advertising.”

General Motors is embracing this new as-yet-undefined model with its “24 Hour Test Drive” campaign, in which drivers are given the keys to a Chevy or Ford for a day, and “Auto Show in Motion,” which allows drivers to test-drive GM competitors, such as BMW and Lexus.

“We so sincerely believe in our product, and it’s hard to carry it in 30 seconds,” Fraleigh said. “Dollars that have otherwise been spent on traditional media are looking for new outlets.”

The Internet is one outlet, which though not new is expected only to grow in marketing capability, despite talk of the boom being over. Sorrell said that 15% of WPP’s business was Web-related, a number bound to increase.

PVR perspective

Nor are advertisers and their agencies ignoring the potentially disruptive power of TiVo and other personal video recording devices, though they believe the impact of time shift TV and the ability to fast-forward through ads so far has been less potent than many had thought.

“The effect of TiVo seems to have plateaued,” said Sorrell. “But we’ll see what happens when PVR technology (becomes more prevalent) through cable and satellite set-top boxes.” A WPP agency is handling the upcoming launch of U.K. satellite-PVR combo service Sky Plus, so Sorrell clearly has a vested interest in its consumer appeal.

Sorrell told Daily Variety he also believes advertiser-financed programming will increasingly form a larger share of programming, as product placement moves beyond its traditional sponsorship role into more evolved entertainment campaigns through film and TV.

As for wagering on just how strong pricing will be in the May upfront TV ad sales market, Sorrell played the demure Brit: “I’d say they’ll be up not insignificantly, but not as significant as double digits.”

Fraleigh, for his part, tried to quell some of the hype: “There’s a lot of demand out there, but there’s also a lot of gamesmanship.”

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