Roulston Media Partners Discuss Advertising Agencies, Pay TV, Search, Social Media, and Much More

November 18, 2011

Roulston Research Media Partners Jeff Marcus and Robert Rose discussed the state of the Media industry and who they thought were the winners and losers as far as companies goes. Here were some of the highlights of their conversation:

· Focus was primarily on Omnicom, Facebook, and Google, but the discussion was broad and trend-focused.

· All noted Omnicom uses many outside resources vs. a vertical integration approach. 

· Jeff agreed this was the only way to go, tech, trends are changing too quickly.  Rob added  Omnicom has no tech ‘secret sauce’, their differentiator is their creative side. 

·All the classic agencies are still trying to figure out Digital; some are “buying their way in” by acquiring small, digital outfits who “get it.”  Customers are tending to buy traditional advertising (radio, print, TV) from the old guard, and the digital social from the new. 

· Jeff noted that the paradigm is shifting from frequency-based advertising to relationship-based. 

· TV/Radio made a natural and understandable transition to the Web initially (still all about eyeballs) but the next phase is to social, and that is crowded with too many small players and no scale, making it difficult for advertisers to run integrated campaigns. 

· Rob and Jeff both agreed digital is still very small.  Rob said it still pretty much “has to be on TV” to get real traction on brand.  Online is more about engagement and participation by people who are already aware of the brand and are seeking it out. 

· Both derided Facebook’s emphasis on demographics, instead of on intent towards action/purchase.  Rob noted that to “dislike” a brand on Facebook and say negative things on it, you first have to “like” their page–which greatly skews FB’s data.  Many people “like” things because friends/relatives tell them to, not because they really like them. 

· Both agreed that an emerging success tactic is to identify real influencers–through such tools as Klout score–then target them and have them spread word thru their social graph. 

· Lots of discussion on broadband pipes and how the owners (e.g. Comcast) have a great deal of control over how users will see content.  Sony’s new idea to create their own set of channels over broadband seems D.O.A. for this reason.  Netflix is in trouble domestically due to high content costs.  Jeff noted their real competition is Video on Demand, not cable; so they are expanding globally where competition in this area is  lower. 

· DirectTV is fighting off attrition in its sub base by content exclusivity, as they have no internet pipe to speak of.  And it seems to be working pretty well for now–sub base increasing, and ARPUs are not dropping as one would expect.  They are also growing well internationally, where cable is less of a factor. 

· Google continues to try new initiatives, but often in a clumsy way.  Rob was quite unimpressed with their new music offering, as well as with their continuing efforts with Google+.  All agreed that while Google giving some preference to ads for its own offerings may ultimately hurt them some (essentially replacing revenue with their own non-paying ads), their goal of keeping “naked search” sacrosanct was the right move. 

· Finally, Jeff noted that “retargeting” was getting very big now and was expected to continue growing.

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