A parade of Madison Avenue’s top executives streamed into a posh Manhattan restaurant in hopes of drumming up new remedies for some of the industry’s longest and most festering problems.
NBCUniversal called the meeting – a rare convocation of executives from fierce rivals – earlier this month, as the industry faces a mounting list of challenges to its ability to monetize advertising. Technology has granted couch potatoes a dizzying array of new ways to unhitch themselves from their traditional TV set – and the media buyers and sellers can’t agree upon a standard set of rules governing how ads are placed in emerging venues like mobile screens and streaming video, nor can they reach consensus on how to measure the viewers who watch them.
“We’ve got a problem,” said Linda Yaccarino, chairman of ad sales and client partnerships at NBCU. If the industry can’t come together, she said, it risks seeing the current ad-supported ecosystem that supports the industry erode over the next decade. “We can’t leave without a meaningful plan for action and follow-up.”
Among those spotted stepping into New York’s Pool eatery – the heir to a space previously inhabited by The Four Seasons – were advertising luminaries such as Irwin Gotlieb, chairman of WPP’s massive GroupM ad-buying unit; David Levy, president of Time Warner’s Turner; and Ed Erhardt, the longtime overseer of ESPN’s ad sales group. Attendees expected to hear the first public remarks from Brian Lesser, who was named to supervise a new advertising and analytics unit expected to be part of a combined AT&T-Time Warner.
In an example of how quickly the industry must embrace new ideas to keep advertisers (and the consumers they seek to attract) interested, Yaccarino said the company was willing to consider adopting new measures of advertising effectiveness, or making the experience of watching video more pleasant for consumers. “We might even reduce commercial load across the board,” she said.
To be sure, the convocation could be nothing more than a dog-and-pony show – an assemblage of hand-wringers giving voice to longstanding concerns without taking much action. But at a time when multiple companies are rolling out individual solutions – Turner, Fox Networks and Viacom have joined together to foster audience buying, while GroupM hopes to put in place a system to measure audiences no matter what screen they choose to watch their favorite program – the meeting underscores some of the very real risks the industry faces if it can’t start to agree on new methodologies.
Participants heard from Gary Bettman, the Commissioner of the National Hockey League (an NBCU partner) and IBM CMO Michelle Peluso about how to reach consumers using multiple forms of media. as well as Twitter COO Anthony Noto and Bob Rupczynski, McDonalds’ global vice president of media and customer relations, who discussed measurement, an issue that continues to flummox a raft of ad players who see audience numbers associated with TV dwindling.
The projections were daunting. Peluso and Lesser articulated a vision of an industry dictated less by old processes and more by new technology. Data and interactivity will allow for the creation of so-called “targeted” commercials that will appear before narrower niches of consumers based on details culled about their lifestyle and geography. Perhaps an advertiser can determine whether a particular household is in the market for a new car and send a promotion that plays to that possible interest. “It’s not creepy,” said Lesser. “It’s relevant.” Some consumers and privacy advocates are likely to disagree.
And attendees also came face to face with growing pressures from advertisers who increasingly want to link particular commercials with completed sales. “I want to measure how many people come into the restaurant” because of advertising, said McDonalds’ Rupczynski. Other measures have less value to him. The executive also spoke to a growing trend that might worry owners of big national TV networks. While the fast-food giant continues to run millions of dollars’ worth of national TV ads, it is also airing campaigns that are more limited in scope. McDonald’s has done more to woo what he called “micro-segments” – snackers, coffee drinkers, and the like. Doing so requires a narrower kind of promotion aimed at a select group of consumers, not all of them. On the flip side, “there are occasions we are willing to pay more for a message that’s more targeted,” he added.
Even an executive who needs advertising to keep his producers and programs flush called for something new and radical to be done. “People are running away from advertising in droves. How do we stop that from happening?” asked Bob Greenblatt, chairman of NBC Entertainment. Like many of the others who spoke, he called for commercials that don’t interrupt a viewer’s experience and instead become part of the bond between audience and show.
If the executives in the room have their way, big changes to TV advertising should be on the way. If only all of them could agree upon a simple means of getting it all done.