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Published: February 8, 2008 at 10:13 PM GMT
Last Updated: February 8, 2008 at 10:13 PM GMT
After nearly 17 years with MTV, Christina Norman stepped down yesterday as the network’s president. Last May Christina told me “For the past few years we have been talking about our challenges and now it's become all about the possibilities. We rise and fall on how we embrace possibility. This is a new playground and we're eager to find out the next act.” While her words referred to MTV, today they appropriately describe her own future, the time she intends to spend at home with her two talented daughters, her possibilities and her next act.
There was another major personnel move yesterday when veteran AOL sales executive Kathleen Kayse moved to Discovery Communications as Executive Vice President, Digital Media Sales. A 24-year veteran of Time Warner, Kayse was most recently Executive Vice President, Marketing Solutions for AOL’s Platform-A organization. With continuing shifts and the escalation of behaviorally and contextually enhanced network ad sales revenues at AOL, layoffs today at Yahoo!, the inevitable acquisition of Yahoo! most likely by Microsoft, disruption of the network television Upfront marketplace and Fall television season by the writers’ strike, management shifts on the horizon at several other major media companies, and a possible advertising recession, these are certainly interesting times.
Yahoo! is at the center of the media storm, and at yesterday’s DaSilva+Phillips Media Dealmakers Summit in New York, several executives predicted the company would definitely be sold and that Microsoft would ultimately gain the prize, even if other suitors entered the fray. At the Summit, former Yahoo! Chief Revenue Officer Wenda Harris Millard, who is now President, Media, for Martha Stewart Living Omnimedia, commented that the Microsoft bid “was absolutely inevitable and predictable. Yahoo! lost sight of who they are and what business they are in. They’ve had a monomaniacal obsession with Google as their competitor. But 90 percent of their revenue comes from advertising so their primary competitors should be the broadcast TV networks. Yahoo! owned the online brand advertising space but they decided to completely abandon it.”
Ad sales at Yahoo!, Microsoft, Google and AOL are all now headed by executives with primarily search and systems infrastructure experience. At none of these leading operations are there senior executives with extensive experience in traditional brand
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advertising sales. Millard pointed out the acquisition of aQuantive by Microsoft and DoubleClick by Google “continues to focus a business that is art and science unduly on science. It is as if the scientific community is taking over advertising, and advertising is not about science. Advertising is not all about algorithms.”
Advertising, she believes, is about effective brand communications and “while the scale that advertising networks may offer is important for products that are not strong brands, trusted media brands will be stronger online than offline. Consumers need the filters that brands offer,” she argued. “Aggregation of inventory for scale may serve some direct marketers but this should be a piece of the business… not the business.” Millard is concerned that over-emphasis on ad sales networks “may be doing damage to the industry before [advertising] value is set.” Trusted brands, she suggested, will be very powerful and valuable and should not be subjected to marketplace metrics and pricing dynamics defined in a “scientific commodity environment.”
Microsoft Chief Advertising Strategist (and co-founder of aQuantive) Michael Galgon agreed that marketers will increasingly lean on media brands. At the DaSilva+Phillips event he commented that marketers will “find golden nugget brands and pivot off those brands. Brands sit at the center [of the media mix],” he said, and marketers will “invest in those brands that are valuable to consumers.”
However, “the definition of a media company has changed,” believes Glam Media founder and chairman Samir Arora. “Creating and leveraging content has morphed. Moving traditional media to the web doesn’t work. The model of a few large content creators and distributors doesn’t work.” Executing ad campaigns based on audience reach, demographics and engagement metrics is very difficult on the web, Arora explained. Glam aggregates content from 500 publishers and websites clustered around areas of interest such as fashion. Glam originates only ten percent of its content, enabling content creators to focus on their brands and premium ad sales while Glam delivers broad audience reach to them.
Arora points out “in television once the three networks were established, the market focused on premium inventory. On the Internet, there is a lack of leverage and reach, and the power of sales forces cannot be used in the way done originally by networks and magazines.” Ninety-five percent of web display ads, he points out, are sub-prime with costs-per-thousand under $2. “We need to define primetime inventory,” he says.
What do you think are the most critical challenges to executives charged with the responsibility of defining their markets, expanding their businesses, understanding the impact of market disruption and managing through a depressed and often depressing time?
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