Close-Up: Live Issue - Adland not so brave about the new online world

Where were the traditional agencies at the Internet Advertising Bureau's inaugural conference? Larissa Bannister reports.

The biggest surprise at last week's inaugural Internet Advertising Bureau conference was not the fact that Bill Gates agreed to appear, nor that Sir Martin Sorrell was there to talk about how he thinks advertising will cope with a changing media landscape.

Given the spectacular growth of the sector and the fact it's an area most of the industry is struggling to deal with, the hardest thing to understand was why so few people from the world of traditional media were in the 450-strong audience.

Gates, Microsoft's chairman and chief software architect, spoke for 15 minutes and used the time to predict a world where all media is consumed over the internet. He presented a convincing argument, notwithstanding his obvious vested interest.

"The notion of internet advertising versus non-internet advertising will become obsolete over the next decade," he said. "Newspapers will be on a screen; TV will be delivered over the internet. The future of advertising is the internet."

Gates also predicted that more than 50 per cent of advertising would become targeted and highly personalised. High-definition internet feeds going in and out of people's homes will, he said, enable consumers to control what they watch and read. The information gleaned as a result could then be used to target messages directly at people based on their interests.

The chief executive of WPP, the world's largest marketing services business, meanwhile, is a man with a lot less to gain than Gates from a world where the internet prevails. Still, he appeared just as convinced of its potential.

Somewhat ironically, given the turn-out, Sorrell used his keynote slot to warn that the advertising and media industries were failing to comprehend the scope and speed of change in the sector.

He said the media industry was in a particular state of flux, and accused media owners of being confused about how to deal with this second phase of growth for the digital sector. "The problem is that most of those companies are run by 50- to 60-year-olds who don't really get it and who don't really want major change on their watch," he said. "Saying the next generation, my kids and my grandkids, are going to have very different media consumption patterns is a bit of a cop-out. It's happening now."

Sorrell went on to point out that media owners such as Rupert Murdoch were panic-buying internet companies in response to falling ad revenues in traditional media.

Nigel Sharrocks, the chief executive of Aegis UK and one of the few old-media faces in the room, opened his own presentation by saying he was "shocked" to see so few people from traditional media backgrounds at the event.

"The ad business is definitely dragging behind the consumer when it comes to the internet," he said. "Every client I speak to says they used to love advertising but unfortunately it's not as potent as it was. I'm not saying advertising is dead, but it's no longer always the starting point when thinking about marketing communications."

In the context of all this forward thinking, there was still evidence of the more detailed issues that the digital industry is struggling to fix. The current debate over how to measure the impact of online is an issue that threatens to stunt the medium's growth, and there was plenty of evidence that the problem remains unresolved.

The IAB, supported by the IPA, feels that online advertising needs to devise a set of measurement criteria that are directly comparable to those used in TV, radio and press. Richard Eyre, the IAB chairman, used his slot to suggest that the industry needs to change the way it talks to brand managers. "We think traditional measurement is a rough-and-ready tool, but that is the language our customers use," Eyre said. "It is appropriate for us to speak that language even if it diminishes what we are telling them."

It's not a view shared by everyone in the industry, as Mark Chippendale, the vice-president of sales at Yahoo! Europe, made clear during a panel session. "I am loathe to go down that (traditional measurement) route because traditional media will struggle to keep using that measurement anyway," he said.

Those convinced by Gates' vision of a digital future would probably agree.

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