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IBM’s Louisa Shipnuck Outlines Different Futures
Given the rapid-fire changes in the media landscape, creating advertising that engages consumers – and finding ways to measure the impact – requires innovative thinking.
Our upcoming Audience Measurement 3.0 conference will offer an in-depth look at some of the latest research on how to make the most the opportunities that new technology is making available to the advertising industry. We spoke recently with Louisa Shipnuck, global business development executive for the media and entertainment industry at IBM, to get a preview of her presentation on “The End of Advertising As We Know It,” a provocative report on the future of the industry by the IBM Institute for Business Value. She will address the findings during “Get Ready to Measure Future Media Use,” during the opening session on June 24, which begins at 8:30 a.m.
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ARF: Louisa, how did you conduct the study?
Louisa: It was based on a great deal of primary research. We talked to a good many executives at the CEO level and at agencies within networks. We also did a primary research study with 2,400 consumer households, within and outside of the U.S.
ARF: Why will the next five years hold so much more change for the advertising industry than the previous 50?
Louisa: There’s a confluence of trends bringing us to a place of dramatic, exponential change. These include consumer control and changes in the ways consumers want to receive their media. We also see an opening, or populist trend, within the creative field, with users and content owners getting into the creative development mix. Further, we see a movement towards individualized ‑ rather than sampled ‑ data and metrics. Another change that underpins the current system is how advertising inventories are bought and sold. When we look at companies engaged in this marketplace we see a new breed of chief marketing officers who are more willing than ever to experiment.
For instance, we might look at the Nike Plus campaign with Apple, by which users integrate motivational tracking and responses via their iPods and a chip in their tennis shoes. This clearly is appealing to the gadget-obsessed buyer. However, concurrent to this Nike Plus campaign is a polished broadcast brand equity/broadcast campaign for the mass audience.
ARF: What skills will agencies need to stay relevant in the new climate?
Louisa: Advertising agencies need to be consumer-centric. In the past, they have garnered a competitive advantage from their creative. We think a future competitive advantage that may even be greater is to be an insight broker.
To fuel that insight, there have to be cross-business analytics. Many companies are made up of hundreds if not thousands of subsidiaries. The advertiser is not getting a single point of service. You can’t get the insight out of the individual silos of the business. We would like to see a two-way dialogue with the users. We see that at The N network, a Viacom business. It surveys users regularly on pop culture.
The ARF: What were some of the most striking findings from the research?
Louisa: We were interested in users who were starting to watch TV and other forms of video on their mobile hand set. Nearly 1/3 of our users were using the mobile device instead of their standard TV set. That was huge – much greater than we expected. The revenues flow to those who are aggregating the content. Instead of the cable company, it would be the telco. I’m not suggesting that advertising dollars follow 1:1. But directionally, advertising will have to adjust to that consumer behavior.
In other cases there is parity. As early as a year ago, some advertising executives were really afraid that if users migrated from the TV to their computers, their eyeballs would not be as valuable. Their eyeballs are almost as valuable.
ARF: Do you anticipate a point at which some consumers will be able to use technology to filter out almost all advertising? If so, how will brands reach them?
Louisa: There already are self-sufficient users because of factors such as spam blockers and “Do not call” lists, but we do think there are ways advertisers can reach them. We believe in permission-based or opt-in advertising. Sugar Mama in the U.K., for instance, will pay users in free phone time if they watch advertising.
There’s also peer-to-peer marketing. Take the Sears marketing widget, involved in the recent Sears prom dress campaign. It is an embeddable piece of code for Facebook. Teenage girls were able to show their friends a series of prom dresses they were thinking of buying for their proms. You have all of the Sears branding creating a personal, community-based way to market.
ARF: With consumers exercising more control over how they interact with advertising, what type of research will help the industry to continue to reach them?
Louisa: Qualitative, not quantitative, research gets a better understanding of users. We support the idea of a two-way dialogue with brands and like the idea of consumer-centricity in the research. We think that many companies should be putting consumers in the boardroom. We’ve supported the idea of a chief consumer officer to reinforce that. Our view is that this person should be an advocate of the consumer experience. We think the position should be at the same level as the COO. We’ve only found one person with a position like this, at Starcom MediaVest.
ARF: Could you discuss some of the new ways advertising is likely to be sold in the future, based on your findings?
Louisa: We’re big believers in the movement from closed to open ad networks and exchanges. Often the open exchanges are transparent and auction based. There are new inventories being traded, things that were never counted as inventory. NextMedium, for instance, has started an exchange to trade product placement units. Producers can make visible to the whole market what parts of their show might be available for product placement. You’ve opened up the market and allowed a great deal of participation. The smaller participants who were previously locked out can start to play.