Execs: Go Interactive

Panel Urges Alternatives in Uncertain Economic Climate

By Mike Farrell -- Multichannel News, 3/15/2010 7:26:00 AM

New York — With an economic recovery just out of reach, programmers and advertisers should look to alternative ways to capture new revenue through interactive television and online methods.

That was the message from a panel of executives at the Bloomberg BusinessWeek Media Summit here last Wednesday. Standard & Poor’s media and entertainment analyst Tuna Amobi said that evidence is pointing to an improvement in the macroeconomic climate, a change that media companies should take advantage of.

“This is a very good time for companies to take advantage of low valuations and look for assets that are complementary to their core business,” Amobi said. “The mood is more optimistic. The challenge is to develop new models to take advantage of an ever-changing world.”

The ad market has been showing signs of a recovery in the past few quarters, as sales declines have lessened for some of the big media companies. Last week at the Credit Suisse Media & Communications Convergence Conference, Viacom CEO Philippe Dauman said the first quarter should be an improvement over the 4% decline in the fourth quarter.

“I could see us getting to flat [ad growth] year-over-year for the first quarter,” Dauman said.

He added that the upfront also is looking like it will be completed sooner, and pricing will be “significantly higher” than last year.

At the Bloomberg conference, Univision Interactive Media president Kevin Conroy said one way to develop models that adapt to the changing world is to try to monetize engagement at networks. He added that the Spanish- language channel is looking for ways beyond traditional ad supported methods to further engage its audience.

“The market we’re focused on, the Hispanic market, is unlike the English-language market, which is largely centered around market share,” Conroy said. “The Hispanic market is about natural growth.”

And it is expanding. Conroy said that, taken alone, the Hispanic market in the U.S. is the world’s 15th-largest economy.

Conroy said there are three ways to monetize that engagement: wrapped into a sponsorship with an advertiser, put out to a market of target consumers who would pay for the privilege of watching, or by building a subscriber base of consumers who are interested in particular niches or genres of entertainment.

But Conroy added that three issues need to be addressed first: measurement, standards around the actual advertising units that would enable interactive ads to travel between different platforms, and better creative.

The measurement issue has been on the front burner for years, with several companies attempting to address the problem of quantifying the interactive audience. On the standards front, Conroy used video as an example, adding that there is great demand as well as supply for video ads, but few ad units to choose from. On the creative side, Conroy basically called for more compelling advertising.

“I would challenge all of us to think of the most memorable campaigns that resonated with them,” Conroy said. “Very few are online campaigns. I don’t think we’ve had that breakthrough yet.”

MediaCom North America CEO Doug Checkeris said that the power of interactive and social media campaigns is already evident. He pointed to a social media initiative his company started for Marriott Hotels that cost a total of about $300,000, but generated $2 million in room sales.

Discovery Communications president of digital media and corporate development Bruce Campbell said that authentication, the initiative to allow multichannel- video subscribers access via their PCs to the programming they pay for on cable, could be a game changer for the industry, even as questions arise about the ability to monetize it.

“It’s all about measurement,” Campbell said. “If we have authentication that works, and as part of that there is a way to actually measure online viewing and cume along with our TV ratings, then all of a sudden you’ve got something that can be part of the broader discussion.”