CAB Explores World of Convergence

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New York -- Panelists at the Cabletelevision Advertising
Bureau's annual Cable Advertising Conference here earlier this month foresaw several
forms of convergence in the next five years.

First, there will be the convergence of cable, personal
computers and telephony via one "black box," said both financial analyst Tom
Wolzien of Sanford C. Bernstein & Co. and ESPN president George Bodenheimer.
"More stuff, one place," Wolzien put it.

But others -- like Larry Lamattina, chairman and CEO at
Western Initiative Media Worldwide, and Michael Moore, formerly worldwide media director
for DMB&B Communications and now a media consultant -- expected convergence to be
accomplished by means of several boxes in the home.

Moore was doubtful about a rush into that new world order.
"Yes, convergence is going to happen … and allow us to jump from one to the
other," he said, "but ... habits change slowly."

Then again, there are consumers who "aren't
waiting around for the black box," Bodenheimer pointed out. They're already
practicing convergence by watching TV and the PC together, he added, in an apparent
reference to services like Microsoft Corp.'s WebTV Networks.

The panelists also touched on other related topics:

Interactivity: David Ropes, Ford Motor Co.'s
director of corporate advertising and integrated marketing, maintained that by 2004,
viewers will "demand interactivity, and not just sit passively" watching TV.

Interactivity and its potential for transactions will
"increase fragmentation on the one hand and increase togetherness with common
interests on the other hand," said Arnie Semsky, previously BBDO Worldwide's
media director and now a media consultant.

But Moore countered that the "couch potato" will
still be alive and well, so "the death of passivity is overrated."

Cross-media ad sales: Ropes and Tony Ponturo, vice
president of corporate media and sports marketing for Anheuser-Busch Inc.'s Busch
Media Group, forecast that advertisers will continue trending away from advertising-time
buys and toward marketing partnerships with networks.

Ropes favors the growing movement toward cross-media or
integrated ad sales -- "[companies putting] those multimedia assets in play
[centrally]," rather than having various divisions pitching the same account.

But Alec Gerster, chairman of Grey Worldwide's
MediaCom media division, worried that all of these refinements in targeting will spell
higher costs for advertisers -- "probably not an insignificant upcharge."

Panelists also voiced concerns regarding the blurring of
the lines between programming and commercials or e-commerce, and between news and
entertainment fare.

"What's the [future] definition of
programming?" Lamattina wondered.

The conference also explored the potential for change by
optimizers, or computer-software planning tools.

"Optimizers will really be put to the test in this
year's upfront," CAB president Joseph Ostrow said.

Others spoke of optimizers in mostly broad and cautious
terms.

"Cable loves [optimizers]," said Jim Van Cleave,
former advertising vice president for Procter & Gamble Co. and now a consultant.
Optimization could have an impact on network-television pricing, he added, by driving more
business to cable and syndication.

But PeriAnne Grignon, director of media services at Sears,
Roebuck & Co., said, "It's too early to tell [its impact]."

Warren Siddall, advertising-services director at SmithKline
Beecham, who saw "enormous potential" in optimizers, added cautiously, "We
will use [optimization] more as certain elements become more definable."

The conference drew 1,400-plus people -- mainly ad agencies
and clients -- versus 1,325 a year ago, the CAB said.

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