News

Execs: Go Interactive

3/16/2010 7:26 AM Eastern

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.”

September