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Futures for Advertising

The last afternoon at the Australasian Media & Broadcasting Congress begins with a panel session on the future of advertising. Paddy Douneen, National Advertising Director for Fairfax Integrated Solutions, is opening the debate by highlighting the difficulties established media companies are having in shifting advertising from traditional to online spaces, especially given the uncertainties of the current economic climate. He says that advertising in some traditional media is still very strong, especially now that car manufacturers and department stores have increasing backlogs of stock to clear because consumer demand is slowing.

Hugh Martin, General Manager of APN Online, is also pointing to the differences between regional and urban markets - innovation is also largely about education, he suggests; especially in regional markets where APN has a monopoly position - e.g. as a newspaper publisher -, SMEs advertising in such markets need to be educated about advertising possibilities outside of conventional media. Global advertising trends are not particularly relevant to such markets; local advertising needs to be unlocked, and APN cannot compete with MySpace or other social networking sites. APN audiences come to its sites looking for events and opportunities in their local spaces. (I wonder what would happen if a hyperlocal social network like myHeimat were to be rolled out there...)

How challenging is it to manage the expectations of city-based advertisers operating in such regional markets? Hugh notes that there are multiple different markets in Queensland; some areas are booming especially due to the mining boom, while rural areas in south-western Queensland are more traditional, and NSW regional audiences are different again. A good deal of APN's products are unrivalled in their markets, however.

Nathan Anderson, Head of Digital at the advertising agency The Campaign Palace, says that his company has headed further into the digital area in recent times. Good creative ideas and thoughts are more important than ever; these need to be cross- or trans-media now, even though many clients are still looking mainly at television as their advertising vehicle. Again, there's a need for educating clients about different advertising approaches. Cost-effectiveness in advertising on new media is competitive now; trackability of advertising outcomes is a problem, though. It is important to make sure the right results are measured, in fact - just because a strong immediate impact may be invisible does not mean that advertising campaigns are failing.

Magan Arthur, Senior Principal at Infosys Consulting, also consults directly with big brands, who remain very confused about digital media advertising. The biggest problem is the potential cost: can digital media bring a cost advantage in local markets? Can they open up new markets in cost-effective ways? Magan points to iPrime's presentation yesterday as a very interesting project (again, there's a strong similarity with myHeimat here). What's also important here is the ability for a very quick turnaround, and the possibility of offshoring advertising (e.g. a master player that is embedded in 50 different sites). Some other ideas presented today - e.g. the use of semacodes - also have enormous potential. Advertising spend is down, but marketing spend is up ('humungous', Magan says), so there are opportunities here.

Hugh also says that holding price (not undercutting existing products) is important. A local publisher in the US is toying with the idea of becoming a local agency for Google AdWords - which doesn't work in regional Australia unless businesses have Websites, of course; what works here is offering free listings and adding to this premium offers where mini-Websites are built for advertisers. Again, this is about both educating advertisers, and gradually drawing them towards higher levels of involvement; this is done by creating a competitive environment that gradually pushes advertisers towards stronger Web presences. Paddy also points to the changing business models for media companies like Fairfax; such companies are no longer only in publishing, but also own sites offering anything from wine sales to dating services.

Nathan also says that investigating technologies themselves is becoming more important - his agency is now starting to combine creative and tech workers in its teams in order to develop innovative advertising solutions. Hugh's company, APN, also has a significant outdoor presence; here, too, there are important interactive opportunities, but the issue is return on investment over time. There is a decision to be made when APN really wants to get into this. Magan adds to this that digital display control is a big area of development; Intel is building a system that aims to control the screen of every single Intel laptop on display in computer shops. Semacodes are another important growth area here.

Paddy says that the most important job now is that of the marketing manager, convincing those holding the purse strings in companies that money should be spent on such new initiatives. He also raises the issue of content generation; user-generated content has been around for a long time in the form of letters to the editor or talkback radio (but alas, this overlooks once again the dynamics behind such content generation and exchange, which can be substantially different in social media...). Nathan adds that the responsibility for strategies in social media campaigns is split across many parties at this point - ad agencies, media companies, search engines driving users to the campaigns, and so on - and that this is a potential problem.

Is there going to be a shift from dividing advertising spending by medium to dividing it by target audiences that may exist across multiple platforms? Nathan says that this is already happening; it makes much more sense to plan campaigns in this cross-channel way. Magan adds that engaging with or building their own social media sites are also an important tool for market research - for understanding the brands' own audiences. There now is a huge need to do so, and this is important for advertisers; CPM (cost per thousands of page impressions) is a boring model, so what can be done beyond CPM if brands better understand the profile of the digital consumer?

Nathan adds that viral marketing - users selling the brand's product under their own steam - is much more effective than conventional advertising; Magan also says that social media sites are taking away audiences' eyeballs from conventional media, and devising exciting new applications tying together advertising and sales are crucial. Traditional media companies may be very well positioned to sell this if they get beyond their present state of shock at the arrival of social media.

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