DAVID MCMURTRIE, managing director Ad2degne UK
I think we are beginning to see advertising agencies paying a little
more attention to integrating all their advertising activity, including
digital media, and that is a process which is really going to develop
over the next three years. We will see the end of separate digital
divisions within agencies as digital media starts to be much more
integrated in the planning process. Advertisers are beginning to wake up
to the fact that what they do online should reflect their other
activity. It can also lead the process. The Nike Run London campaign was
a great example of taking a creative idea which was originally for the
online space and moving it into other media.
What is happening in today's marketplace is that nobody is actually
saying to the client "you should be moving some of your budget from TV
or other media into digital media". Digital media has carved out its own
niche.
If we are going to progress that, we must start taking some of the
budgets from traditional media. Obviously interactive TV will help that
process as it will make TV buyers sit up and pay attention.
I don't think there will be much more development in banners and
buttons.
Instead there will be more use of site content to build up more of an
ongoing dialogue with users.
In three years' time we will have 3G, which will give your mobile phone
a constant connection to the web. Whereas the WAP experience was
disappointing for most people, 3G will allow people to use their phones
in a previously unexplored way as it is broadband for mobile phones.
Mobile communications will have to be used carefully as you can run the
risk of upsetting and alienating people. If you communicate with people
on a mobile device they are going to pay a lot more attention to that
message.
CHARLOTTE NESER, managing director Abel and Baker UK
My big lesson learnt has been to treat forecasts and predictions with
caution. Looking back at the predictions made three years ago, a lot of
them have been wildly inaccurate. People have been too optimistic about
the take-up of the internet and consumer behaviour has been hard to
predict.
The visions of lots of sites did not happen. It may be that in three
years' time, the dreams people were talking about in 1998 may in fact be
realised.
Virtual changing rooms are much more likely to happen. People will be
able to scan their bodies. Everyone's measurements will be mapped out in
3D photo booths. It will be saved with your profile and you will be able
to tell if clothes and footwear fit you.
The sectors that have done well so far are music, books and flights.
But the experience of talking to a travel agent or going into a clothes
shops has not been replicated online. More people will have faster
connections at home which will mean their experience of the internet is
much more pleasant. At the moment, it is peppered with negatives. People
will spend more time online and content will become richer.
From a creative point of view, we will be able to run the campaigns we
have been aching to run in the UK. At the moment we have ideas we cannot
run because the market is not ready and the internet speeds are not fast
enough. We have just done a campaign for MTV where you can type in the
lyrics for a song and it is synthesised to music and sent back to
you.
That kind of campaign is using innovative technology but you would have
a better experience with a faster connection. You could run these things
on a much more mass scale.
It would also be great if people stopped making such a big deal of the
internet. It needs to become a useful tool in people's lives which they
enjoy using. From a marketing point view it should become just another
channel through which to reach people.
MARTINA KING, managing director Yahoo! UK & Ireland
We have got past all the hype and what counts now is good old business
fundamentals. A dotcom business needs its income and it needs to manage
its cost base.
The first thing that is important over the next three years is that
England does well in the World Cup finals, which will give us all a
morale boost.
In terms of the internet, my big hope is that it will not be seen as an
adjunct or a separate business unit and that it gets integrated into
main marketing schedules. At the moment it isn't.
The internet does not do housewives with kids, but we do ABC1 adults
brilliantly and it's still a very upmarket young audience. Online
Yahoo!
beats all the quality daily newspapers in terms of the number of ABC1s
we reach but we have been useless at telling people about it. This is
the most difficult group to reach. They are out and about. They are busy
people but they're on the internet.
There has been considerable talk about our need to look at alternative
revenue streams. My big challenge is to make sure the media model works
and we have every faith in that. We are working with advertisers to make
sure their advertising works on Yahoo!. We can prove that it does. I
cannot go out and talk to clients unless I know that is the case. It's
been really important to get the evidence and now we have it.
I think we will start to see charging for all sorts of things. The
internet has operated as a free model. I think the bulk of it will
remain free. If you are a newspaper, you have a cover price as well as
an ad price. People will not have to pay to come onto Yahoo! However,
there may be elements of Yahoo! that people will be more than happy to
pay for.
Now we can run cinema and television commercials. Hopefully broadband
will give us the opportunity to run more beautifully-crafted
commercials.
We ran Mini's commercial on our homepage and it was hugely
successful.
MARYAM BAZARGAN, partner interactive Optimedia
It will not necessarily be "new" media anymore. TV audiences will be
interacting with programmes a lot more. Who Wants To Be A
Millionaire?
is bringing out an interactive TV game. If you have got the interactive
element, people will want to use it. You have to bring it more to life
for the audience. If you are watching a gameshow and you know the
answers, you get frustrated for the person who is playing the game. If
you can respond with your remote control, I think that makes the
programme more exciting. The more you allow the audience to interact
with the programme, the more they are going to enjoy interacting with
it.
Broadcasters are going to have to fight for their audiences. As more and
more people take up digital they are going to be spread across 200
channels. Programme- makers and broadcasters are going to have to work
harder to keep their audiences. If you are watching a film for two hours
you are not going to want to interact - although there are already DVDs
where you can choose the endings. But I'm not sure how many people want
to do that. If you are watching a film you just want to be
entertained.
On Sky Digital, when you are watching the football, there is a channel
where some of the fans are doing the commentary. You get a chance to be
the commentator of your club on national TV. That is part of the
interactivity.
I somehow don't think we will be watching films on our mobile phones
because people will want increasingly smaller devices. Who will want to
watch a film on a tiny screen?On mobiles, we will be able to have much
more localised targeting of advertisements. Retailers will be able to
send out specific offer messages to actively recruit footfall into their
stores.
JAMES BOOTH, director TangoZebra
Advertisements have to work for media owners and advertising has got to
remain viable for media owners. They will start to support ad formats
which fit the look and feel of their sites. What seems to be most
attractive to them are bespoke sponsorship formats designed to work in
conjunction with the host sites. A lot of people are talking about
sponsorship at the moment. It's an area which is seen as exciting and
slightly untapped.
I think advertisers are still going through an educational phase. Lots
of formats are being delivered and not all of the advertisers are up to
speed with all the opportunities that exist. The recipe for success is
probably finding the right balance between the host site having
something that works well for their end user without being too
intrusive.
Some of the formats will remain. The effectiveness of pop-ups will
decrease because people will become accustomed to turning them off
before the content is loaded.
We do not know what is going to happen with interactive TV. Some of the
formats are now being developed with broadband and interactive TV in
mind and there will be more and more interesting uses of Flash. If
anything we are waiting for a time when interactive TV can better
support more interesting formats of web publishing.
Some host sites have got higher end user numbers than some of the cable
TV stations and yet they struggle to win advertising. That is the battle
we have to win. We have to present the internet as a valid medium. The
dotcom ad spend has dried up and it is being replaced by FMCGs. They are
driving a lot of the new ad formats. It is driving the development of
the work we do here.
Lifestyle sites could get merged. There are some terribly valuable
pieces of real estate online and that is not going to go away providing
we are responsible about how we move advertising forward.
JED GLANVILL, director m digital (part of MindShare)
For all of us at m digital, the key thing is that online digital is
impacting on businesses and brands in extremely different ways. There is
no one rule and it's almost impossible to predict what is going to
happen to an emerging advertising model.
For some big brands, the internet offers a new sales channel. You can
now buy IBM computers on the web and Ford is selling cars via the
web.
Ford's actual fulfilment is done by the dealer network - they have a
massive dealer franchise. The web site is complementary to that as
people can select and order their cars online. More than 50 per cent of
people are using the web to research prior to purchasing a car. That is
enough to merit car companies delivering brand messages to those people
to help influence them as part of that process.
Ford, for instance, is using the internet for brand-building, direct
marketing and as a sales tool. The unique selling point which the
internet has is the potential to talk to people in a direct way. In the
UK, the Ford Group, which includes Land Rover and Jaguar, is moving very
aggressively into this market.
FMCG advertisers are not going to sell products directly over the
web.
They were advised to create web sites in the past which arguably gave no
benefit to the consumer. What the web gives FMCG advertisers is the
opportunity to reach a lot of people, and increasingly that is being
achieved through partnerships. As the internet becomes more mass market,
there will be more opportunities for joint ventures.
MARI-KIM COLEMAN, vice-president Jupiter MMXI
I think one of the biggest things you are going to see is more and more
traditional players coming on to use the internet and incorporating the
internet into their business strategy. You are going to have traditional
companies using the internet to cut costs and increase efficiencies.
They will be using the internet for better internal communications and
for customer service. Dell computers is a perfect example of a company
that has done this incredibly well. Everything is done online.
In spite of the internet bubble bursting, every metric we are looking at
shows things are continuing to grow in terms of the online population
and in terms of advertising. A large proportion of internet users are
using retail sites. The slowdown has caused less confusion for
consumers.
Because there are fewer choices for them it has become easier for an
online user to be satisfied. Before you were having a new retail site
nearly every day.
There has been an incredible amount of consolidation in terms of online
publisher content sites and e-tailing sites. The average UK internet
user is visiting far fewer sites. In June 2000, 35 sites accounted for
50 per cent of time spent online. In June 2001 there were only eight
sites that accounted for 50 per cent of time spent online.
Growth levels were in the 100 per cents for online advertising but that
could not last for ever. Growth for this year in online advertising in
the UK will be 24 per cent. In less mature markets in Europe, such as
Italy and Spain, it will be higher. In Nordic countries it's slower.
In the UK market, the highest growth sector will be interactive TV. By
2005, the number of households that have interactive TV will equal the
number of households with PC internet access. Fifty per cent of UK
households will have interactive TV by 2005. In the next three years,
the advertising industry needs to understand what advertising models
work for interactive TV.
Our forecasts for advertising on wireless are pretty conservative. We
think the PC internet and interactive TV platforms will be more
important. We're not bullish about revenues from advertising on
wireless.
MARTIN LINDSTROM, senior vice-president Digitas
In 1995, when the web appeared for the first time, we changed from being
a one way-driven world to becoming an interactive world. We have not
really managed to get down to that point of truly one-to-one
dialogues.
Take SMS messaging and interactive TV. Both of these will enable us to
get closer to one-to-one dialogues. In true one-to-one dialogues, I will
know, for example, if you have any children. I will know your favourite
magazine and I will be able to predict what you want tomorrow. We will
have enough information about you which will enable us to send out
messages to you using the best possible channel.
Just imagine: you have been on a web site and participated in a
Coca-Cola competition. As you are walking down the street, your mobile
phone will know you are passing a kiosk and you will receive a SMS
message telling you to buy two bottles of Coca-Cola for the price of
one. It will inform you that you have to go into the kiosk to redeem the
offer. When you come home you will be exposed to a Coca-Cola TV
commercial.
It's going to be about the ability to optimise each channel so they are
working together to achieve some kind of synergy. This will mean TV
working by itself; it's more about TV talking to mobile phones. They
will be able to adjust messages every time they learn about you and be
even more targeted.
They are going to customise their messages to a stronger degree than
they have done before. It will not just be a case of having one message
for one audience. They are going to have 15 different messages for one
audience.
You will be sending out messages which change according to where a
person is and what they have done.
Marketing in the future is going to be a highly sophisticated tool. It's
going to become a much more diversified type of strategy. One-to-one
will always succeed as long as you follow the rules of the game. If a
consumer says: "do not communicate with me ever again", it will build a
brand, as, even if you never communicate to that person again, you will
have impressed them just by virtue of the fact that you have taken the
trouble to listen and act.
ROB NORMAN, chief executive Outrider
People generally overestimate the short-term impact of technology while
underestimating its long-term impact. There was a whole engine of false
economic activity at the start. People were able to create hugely-funded
organisations and were able to trade in commodities of unknown
value.
People have not successfully proven the ways in which different assets
delivered via the internet can generate revenue streams for their
businesses.
One of the things which is pretty clear about the internet is that
people are engaging with it. There are big numbers. In terms of consumer
usage it is the fastest-growing medium. Ever. Nothing has ever got close
to it. What is interesting is whether the consumers actually regard the
internet as a medium. Media people do think of any blank space as
advertising inventory.
In the same way as nature abhors a vacuum, media people abhor blank
space.
The challenge is to try to deliver and create a relationship between
brand advertisers and the consumers. You need to find the right places
online where the users will have an affinity with the brands that are
being promoted.
The question is: how can you take brand messages to a relevant community
in a way that does more than talk about a product?
The most interesting part about the internet is its fabulously narrow
targeting. It offers a tremendous ability to have different creative
messages.
But we have to revisit the notion of return on investment and define
different measures of return on investment for different people.
I think it is inevitable that there will be fewer but more robust
suppliers of content. I do not think there is enough revenue to support
the width of offers that exist in the market. I'm convinced news content
will remain tremendously important. I think that stretches into sport,
finance and so on. And there will be lots of community stuff as people
want to connect with each other.
