Marketing in a Digital World 2004 Tour: San Francisco
Marketing In A Digital World
San Francisco, September 9th
Written by John Bohan
This past Thursday, the “Marketing in a Digital World” conference traveled to San Francisco for the first time. Over 125 marketing and advertising executives gathered together at the Fairmont Hotel to discuss the future of advertising and marketing.
Representatives from The Gap, Wal-Mart, Charles Schwab, eBay, Levis, Intel, Coca- Cola and many others filled the Gold Room at 4:30 PM. The conference opened with a question: “How many grocery store products are in an average supermarket?” After a couple of guesses, the answer of 40,000 was given. In addition, there are over 200 types of conference room chairs, 52 types of Crest Toothpaste and in 1998 there were over 11,000 new product introductions as compared to only 800 in 1970.1
Over the last three decades product proliferation combined with media fragmentation has made advertising less effective and increasingly difficult; however, there is hope. The best thing to happen to advertising is the Internet, TiVo, SMS messaging and any other technology that puts control in the hands of the consumer.
As consumers choose content, they cut through the clutter to truly identify their interests. With the right tools, marketers can more easily pinpoint their customers and avoid a shotgun approach that interrupts many to convert a few.
Geoff Ramsey, CEO of eMarketer, agrees that the ad model needs to change. He explained that, “Over 59% of consumers feel that most advertising has little relevance to them and 65% feel that they are constantly bombarded by ad messages and are becoming increasingly skeptical.”
Geoff suggests that the answer to the current problem is: Advertisers need to acknowledge the empowered consumer and give him what he wants, when he wants it—a type of “Advertising on Demand” controlled by the end user, not the content provider. 
Obviously, Overture gets this model too as its search business has experienced extraordinary growth by placing relevant ads in front of interested consumers. David Kranstedt, SVP/GM of Overture’s Direct Business unit, indicated that despite the recent growth in Internet advertising, it still has plenty of room to grow. He indicated that weekly media time spent on the Internet is on par with television at about 32%. TV, however, receives about 38% of total domestic dollars, as compared to the roughly 4% that is allocated toward online.
While search has been the obvious answer to highly relevant ads, a less obvious source of relevant ads is Behavioral Marketing.
Judy Gern, VP/Account Director of Carat Interactive, demonstrated
the success of a recent Vonage Internet ad campaign where she matched behavioral marketing and rich media (via Oddcast) to achieve click through rates of 10.4% and a conversion rate that was double that of all other campaigns.
Jeremy Helfand, SVP/GM of Advertising.com, followed Judy with similar analysis indicating that behavioral marketing is the number one tool that is responsible for successful conversion rates. We had a very congenial panel as Gary Stein, Senior Analyst for Jupiter Research, also supported the future strength of consumer behavioral marketing indicating that it was the number one “reason for optimism” in a recent survey of advertising executives.
Contextual Marketing was a close second in this survey as evidenced by Chas Edwards, VP of Advanced Marketing Platforms at CNET. Chas feels that there will be less and less of a delineation between content and advertising and more of a movement toward simply meeting consumer demand. 
While CNET clearly identifies advertising versus content, the distribution and “look and feel” of the two are often similar.
Electronic Arts (EA) also integrates ads into the body of its content. Julie Shumaker, Director of Advertising Sales for EA, indicated that they are creating real life sponsorships like “Sponsored by McDonald’s” to add to the overall game experience rather than take away from it.
After the panel discussions, the conversations continued over cocktails and hors d’oeuvres. Everyone seemed to agree that the ad model is bound to change; it’s just a matter of time.
There is no question that we will continue to be bombarded by ads and there is no stopping the next launch of Crest Whitening Fresh Toothpaste with Herbal Mint; however, with the use of technology to seek more qualified customers, advertising could become increasingly powerful.
It is possible that we will move quickly toward a world where the majority of ads are no longer annoying interruptions of content but rather partners embedded within content that support the end user’s experience while simultaneously, underwriting the programming…….time will tell….
(1) Statistics derived from “Simplicity Marketing”
Photographs taken by Stephen Dorian Miner Photography
www.sdmphotography.com
