Social media has been the single topic that has commanded the most attention at ad:tech New York 2009, but while marketers and their clients appear to be almost universally agreed about the importance of having a presence on websites such as Facebook and Twitter, most are also grappling with how best to utilise these properties both to connect with consumers and to generate an uptick in key brand metrics.

In order to assess how some major companies in a range of different sectors are attempting to achieve these aims, David Carrel, Senior Vice President of Digitas, led a panel session featuring senior marketing executives from PepsiCo, the food and beverage manufacturer, CNN, the news and information specialist, and TIAA CREF, one of America's biggest pension companies.

Pepsi fizzes on social media

Bonin Bough, Global Social Media Director of PepsiCo, argued that social media should be seen as a unique tool through which advertisers can gain a true picture of the views and opinions of their customers, without the moderating influence of market researchers or interviewers, and with the added benefit of real time updates.

"Those smart marketers are marketers that realise word-of-mouth has been happening all the time. We know that it's the strongest driver of purchase intent, we were just never able to look at it," Bough said. "Now we can actually peer into unaided conversations, and see what people's true feelings are outside of the survey spaces."

More broadly, the main challenge facing his organisation lies not only in attempting to place the emerging range of Web 2.0 properties at the very heart of its commercial communications, but also in how to "super-inject social into our global organisation."

"How do we integrate social media not just on the brands, which is, of course, a lot of the time the fun stuff, but also in terms of internal communications?" Bough asked. "We have 200,000 employees, going to 300,000 with our bottler integration. If we could activate 300,000 people that would be a huge win."

From a purely brand perspective, he posited that products like Pepsi and Tropicana "clearly belong to the consumers almost more than they belong to the marketers." This means that manufacturers need to ensure they are both fulfilling the needs of their customers, and are also locating and interacting with those people displaying the highest level of devotion to their products.

"When you look at the conversation, it's amazing how people have taken these brands into their lives and own them and use them in their everyday lives," Bough said. "For us, it's not just looking at the conversation, but how to identify those advocates that are having those conversations, and how do we activate those advocates … because we know their passion is going to drive some kind of change or result."

One way Pepsi is attempting to reach this goal is by reaching out to this audience via its official Twitter stream, and offering them exclusive offers and experiences, which they can then go on to share with their peers both online and offline.

In terms of the actual insights delivered by social media, Bough cited the example of Gatorade, PepsiCo's sports drink. While there is a lot of "buzz" about the brand on social media, much of this is related to its purported benefits in curing the consequences of a heavy night of drinking alcohol, which isn't relevant to assessing what impact the company's marketing messages are having, or to helping it identify those web users spreading positive messages about Gatorade.

"What we want to focus on is what the elite athletes are saying about our brand," Bough said. "What are the coaches, what are the real influencers that influence the target that's actually buying the product in mass quantity saying? So how do we build filters that filter out a lot of the noise of the conversation so that we can actually get to places where we understand the messages that are driving the bottom line?"

In another example, Bough stated that the chatter on social media portals had revealed that many moms were opting to buy G2, the low-sugar version of Gatorade, to rehydrate their children after exercise. However, this audience had failed to realise that the regular version of the brand actually did this more effectively, proving that the "science that was there was not really resonating" with this core demographic, and thus leading PepsiCo to change its strategy in this area.

The firm has also experienced some of the potential negatives of this emerging medium. An ad that ran in Germany, featuring the last calorie of a drink committing suicide, generated a large amount of critical feedback. The agency which produced the execution wanted to submit it for an awards programme, but did not receive a formal sign off, while the ad itself ran just once: in a niche arts magazine in the European nation. Despite this, a copy still made its way on to the web, causing uproar among many netizens.

"Immediately, we jumped in," Bough reported. "We were very clear with the public that the ad will never run again, here's how it got out, this is what the issue was." The marketing team also responded individually to all the consumers who were offended by the ad, and thus helped offset the damage that had been done. Taking such a transparent, honest approach can even provide "an opportunity to change a 'badvocate' into a potential advocate," Bough said, as long as communications are authentic and sincere.

The Purchase-based firm has also attempted to combine the information gained from social media with data drawn from other mediums in an effort to assist its marketing, research and development and innovation programmes. Earlier this year, it launched "throwback" versions of its Pepsi and Mountain Dew brands, with packaging reminiscent of that used in the 1960s and 1970s and available for a limited time only (LTO), with both social and more traditional mediums informing this decision.

"We saw early conversation about how much people love that LTO coming from Twitter, but it wasn't just Twitter that drove us to bring back the product," Bough said. "It then spawned a lot of other channels that already exist for us to go and test customer interest and potential success in bringing the product back long-term."

Why social media is good news for CNN

Kay Madati, VP, audience experience, CNN, argued it is imperative for big brands to move into the social sphere, despite the concerns some advertisers and, indeed, journalists, have about this strategy, which leaves them open to unfavourable opinion among web users.

"You talk to a lot of brands and they're terrified of the user-generated space," he said. "We all have to get a little bit more comfortable that the … conversation is already happening. It's whether or not we begin to participate that counts. You can't manage this stuff. But you can participate, and you can be relevant and a part of that dialogue."

In the first instance, Madati defined CNN's focus in this arena as "really looking at how our audiences move across our platforms, what their needs and expectations are, what kind of opportunities to create some compelling content-rich experiences on air, online mobile and the social media space."

"We've had a lot of examples where we have heard loud and clear from our audiences that they want not only to be informed, but they want to be involved," he added. "They want to be involved in our news products, commenting on it, correcting us, challenging us on it, and participate in that."

CNN's recent interactive initiatives have included partnering with YouTube, the video-sharing portal owned by Google, to broadcast the US presidential debates between the two main candidates in last year's election, Barack Obama and John McCain. It also forged a similar tie-up with Facebook to show Obama's inauguration after his victory in the content, and Madati suggested that while this event would have resulted in considerable word-of-mouth naturally, the company was able to direct this traffic to its own benefit.

"People would have been talking about the inauguration anyway, but being able to do it around our content … [and] aggregate an online crowd who can now share, interact, participate in this seminal moment in time was a unique way for people to experience the news content that we put out into this space. We're constantly looking for more opportunities to create those kinds of experiences," he said.

However, while social media can provide a vast array of information about the preferences of the people who use these services, measurement remains complicated, meaning it is imperative that marketers do not take too simplistic an approach when assessing the facts and figures they are presented with.

"Too often, we rush to a silver bullet solution on this stuff. You've got to figure out what you're going to do with the data when it comes in … and how you're going to use the information. Otherwise, it's just another hosepipe," Madati warned.

On the news front, the heated fallout from this year's Iranian elections also taught CNN some valuable lessons about how it could use social media not only to distribute content, but to keep tabs on events around the globe. While traditional sources of information were effectively in "lockdown" in the Middle Eastern nation as protesters contested the results of the poll, Facebook and Twitter both contained considerable amounts of material on the constantly changing situation in the country. In response, CNN found it was not structured to be "actively listening", or to verify the accuracy of this information.

"Accuracy matters for us … it's part of our brand DNA. We have to be accurate, we have to be timely, so sourcing across social media may still be a challenge. But it doesn't mean we shouldn't be out in the space," said Madati.

In a similar example, a plane crash in Buffalo was not picked up by any of CNN's affiliate partners for over an hour after it occurred, while a post appeared on Twitter within minutes. This shows "we have to be active in changing our news gathering approaches … to be much more aware of what's going on in the social sphere, and to be able to go out and verify some of the information that's out there," Madati concluded.

How TIAA CREF invested its time wisely

Jeff Fleischman, chief digital officer at TIAA CREF, described his firm as "a 90 year old company trying to become like a two year old company, and leverage things like social media and mobile". While governmental regulations and certain popular perceptions about the financial services category posed some obstacles to doing so, the results so far suggest this decision is paying dividends.

"Going on to Facebook and Twitter was like a facelift and tummy tuck for us," said Fleischman. "We were 15 years younger overnight just by going onto those two sites, and our customers were actually surprised that we were there. Some of them actually asked us to help them, because they thought we were social media experts."

However, merely establishing a presence on these properties was not sufficient to deliver on the organisation's ambitions, meaning it had to experiment, be prepared to fail, and surrender its hold on certain aspects of communications.

"Social media actually democratises your brand. So you don't control it. People talk about it, you can go online and see what they're saying. You have to become part of the conversation. TIAA CREF believes we have to connect and collaborate," Fleischman said.

Through its Facebook platform, the financial services provider has thus aimed to provide a "podium" for its customers to interact with each other, as well as to offer their opinions and ask questions of TIAA CREF itself, such as which funds would be best for them to invest in.

Alongside reinforcing the company's knowledge that it is regarded as being safe and secure, these comments have revealed a range of other matters which are of interest to its customers, be it investing in socially responsible funds or their concern about issues like excessive remuneration for top executives.

"I think what it's done … is let us engage more with our customers and hear what's important to them," Fleischman said. "We give them content and give them questions to think about. We've seen a pretty good response in terms of what insights we are starting to get, in terms of both what's important to them and what's on their minds."

As TIAA CREF came through the financial crisis relatively unscathed, this channel has also helped provide a forum for positive eWOM about the brand to spread, as well as ensuring that it meets the demands of its customers, which is becoming increasingly important in the digital age.

"If you don't listen to your customers and you don't pay attention, whether it be online or offline, you run the risk of damaging your brand," Fleischman said. "One unhappy person … can go online and actually create a global phenomenon, good or bad, for your company."

News Corporation is one of the world's premier media groups, with a global brand portfolio spanning news titles like The Wall Street Journal and The Times to Fox, the US broadcast network, 20th Century Fox, the movie studio, and MySpace, the social networking portal. Headed by chief executive Rupert Murdoch, the company is at the forefront of a number of trends that could ultimately come to define the future of the digital space, be it charging consumers to access online content, or delivering video-on-demand through web platforms like Hulu.

Taking to the stage at ad:tech New York 2009, Jonathan Miller, chief digital officer and Chairman/CEO of News Corp's Digital Media Group, gave a wide-ranging overview of the current condition of the new media industry, and offered his predictions for the future. Among the major developments he identified were the rise of real-time communications, the growth of the mobile internet and the further "socialisation" of the web.

Current spending patterns

When looking to current behaviour among advertisers, Miller suggested there was a "cautious" improvement in the overall trading environment, which should further develop as marketers begin to outline their objectives and spending intentions for the next year, leading to double-digit growth in the year ahead.

"Budgets for this year were done in October last year … and there was nobody submitting a corporate budget in any company anywhere saying 'You know, it's probably going to be a really bad year, but lets up our marketing spend next year and really go for it," he said.

"As we start to go into the next budgeting cycle, which we're in now, I think there'll be budgeted increases, so in general we'll see marketing services spend increase year-over-year … there's a mechanic that allows that to happen."

The socialisation of the internet

In identifying the main shifts that are driving the growth of digital media, Miller suggested that one of the primary factors at play is the "socialisation" of the internet, which is shaping how consumers engage with each other, and with brands. While Facebook has leapfrogged MySpace to become the biggest social network in terms of membership, News Corp's flagship Web 2.0 property is now seeking to take a unique approach to differentiate itself in the face of increasingly intense competition.
 
"We have one of the great socialisation assets. What we have to do is focus on where we can win, and that win is around, as we like to say internally, interest-bases, what people are in to," said Miller. By contrast, Facebook is based around what web users are "up to", giving MySpace room to take ownership of areas such as music, where it has already established a leadership position.

Twitter has also seen its traffic levels begin to "flatten" in the last month, he added. While this could be a small "hiccup", it may also reflect the need to try and tap into the youth market to expand on its core adult user base, or perhaps even be a consequence of the changes Facebook has made to its own site, such as offering more real-time updates. Moreover, on a fast-growing  medium like digital, there is "always a next new thing," Miller said.

Mobile matters

Another channel which will enjoy increased importance in the long term is mobile, which could come to offer media companies and advertisers a unique platform through which to engage with consumers, and a new means via which to drive revenues. The rise of applications, typified by the iPhone's App Store, and the previous craze for buying ringtones, demonstrate just some of the unexpected opportunities this sector has provided so far, according to Miller.

While information like "commodity news" and sports scores are unlikely to command such a premium, web users do appear to be willing to pay to access material on devices like the Kindle, the eBook reader produced  by Amazon, on which an increasing number of news titles, including The Wall Street Journal and New York Times, have made their  content available.

"Is the mobile web a derivative of the web, or is a new beast? I don't think we know that one yet … I'm in the camp that says lets be cautious in the sense of not just thinking this is an extension, but this may be a new medium," said Miller.

"People seem willing to pay in that environment …  The portability and the convenience is considered worth paying for. So as part of the value proposition you have to bundle things together. You have to bundle premium content and premium experiences in one."

It is also important to realise, he added, that while the mobile internet is seen as an emerging channel in countries like the US, in many other markets, and particularly in Asia, uptake levels and the services available are more advanced, either because PC ownership levels are relatively low compared with wireless devices, or because of the cutting-edge technology that is available in these areas.

"If you're in East Asia, China, Japan, Korea, the mobile web is the web. That is the way people are accessing the internet," Miller said. "In maybe two years, there will be more people on broadband through a mobile device in China than there are people in the United States. The question then becomes is that an advertising medium? Is should be. But it may be a transactional medium first."

In Japan, Sharp, the consumer electronics manufacturer, has already made a smartphone that allows users to watch live digital television on one channel while recording a programme on another, thus demonstrating that this segment does not begin and end with the iPhone.

"When you start having things like that, you realise this is going to be your access point for your media, internet and communications experience for sure," said Miller. "It's an overall trend and an overall movement that is fundamental."

"Personally, I can envision a day when most of the news consumption is not only online, it's mobile, through mobile devices and electronic readers. I can imagine the same for television and movies … when you have nice screens travelling around with you in hopefully secure environments, things can happen."

The death of display?

Looking further ahead, the head of News Corp's digital arm suggested one key issue facing the industry is how to revive advertiser interest in online display in a world that has come to be increasingly dominated by search. Indeed, despite the fact that consumers are spending as much of 30% of their media consumption time on the web at present, just 3% of all display advertising has transferred to the internet thus far.

"That seems incredibly low … I think that's the number one for all of us, no matter which chair we're in, and even if you're Google, because a) they're moving into that with their exchange, and b) it also obviously affects the search share," continued Miller.

However, as people are making more and more use of the web, he predicted that "the dollars have to chase that" in the end. And while there has been a considerable "lag" to date, Miller suggested there is an "increasing pressure" for brands to more closely match customer behaviour with their spending, meaning the next two years could deliver a real "breakthrough".

More broadly, he divided display advertising into premium, targeted and "long-tail" segments. The premium sector is the most similar to classical brand advertising, and has suffered disproportionately in the last few years, which is something media owners and publishers need to redress going forward. Targeted display ads are more data-driven, and use the sort of information-based approach favoured by search services. "I think that actually is going to be the next big dollar shift," Miller forecast.

In an effort to tap into this movement, the Fox Audience Network (FAN) is aiming to leverage its position as one of the top five ad networks in the US, where other main players include Google, Microsoft, Yahoo and AOL. Alongside the 60 million users of MySpace, a broad range of well-known and more niche portals contribute another 98 million users to the properties included on this platform, giving FAN a demographic reach "across the board." As well as providing access to the "long tail", Miller argued a detailed view of the behaviour of the people using these sites will come to play a more important role in display ads in the future.

"We believe that by adding audience insights to what would otherwise be not differentiated inventory, you make it more valuable," he said. "Starting from the social networking environment … people tell you a lot about themselves in unstructured data. Once you structure it and make it useful not only as a seller, you make it useful to a buyer."

As part of this process, News Corporation has also forged an alliance with WPP Group, the marketing services conglomerate, that will see the two companies exchange information and insights, while the media titan will also provide the agency holding group with access to a proprietary real-time bidding tool, as well as information from third-party sites. Such partnerships are essential to building robust networks and generating the sorts of insight required by advertisers, Miller added.

The rise of the 'gremlins'

Given the fundamental changes taking place in the industries in which they operate, it is clear that advertising agencies will also have to evolve in order to reflect the new realities of the marketplace. In the first instance, this will mean that consumer research and the media planning and buying functions will assume a greater importance, leading to a shift in the balance of priorities.

"The traditional agency structure has been that creatives dominate. They get highly paid. They're the names you know. They're the ones you see in meetings and then you go down and ten meetings later you meet the actual 'gremlin' who is supposed to buy the media. I think the paradigm has fundamentally flipped going forward," Miller said

"The media buying/insights/planning becomes the central thing and that's what your going to make you're buying decisions on as a client, meaning what agencies do I work with, and it's going to flow from that to the creative and the other stuff, because you're addressing audiences and you have to have the audience insight to know what creative you should do."

Despite this, he added that creative will remain important, as "otherwise people won't respond. But the process and the pyramid is, and will inevitably, flip now."

Paid versus free

Another area where News Corp has been very vocal is in the issue of requiring that consumers pay to access material from its news titles online. This has implications not only for newspapers, which are perhaps the form of media that are most under pressure, but also for TV and even movies, despite the fact each of these mediums appear to be embracing different models at present.

"If you're a content producer, you obviously feel you've got to have a way to really get value for your content, and that leads you into the paid discussion. The history of the internet so far is that is not an easy thing. Content is very promiscuous, and it's pirated and all this kind of stuff," Miller said. "If you're talking about media companies, that is a really big issue. And how that gets sorted through everything from the newspaper world to how they produce film and television. It's a big deal."

One way of overcoming this problem is establishing a clear "value proposition", something he suggested the Wall Street Journal has managed to successfully achieve. Similarly, there is now an emphasis on providing more "premium experiences", be it in providing high quality content, such as on Hulu, or a unique design interface. "Unless you have premium experiences with a real value proposition, you don't have a place to start," Miller concluded.

The internet is expected to record a decrease in advertising expenditure in the US for the first time in almost a decade this year, with eMarketer recently pegging the rate of this decline at 3.9%. Despite this, the medium is still set to improve its market share at the expense of other, more traditional, forms of media like TV and print, continuing what is regarded as a long-term shift in the industry. More specifically, marketers are said to be favouring this channel as it allows them to reflect the changing behaviour of consumers, and because it offers a wide range of metrics through which they can more closely measure the impact of their campaigns.

However, the advent of social networks, blogs, video-sharing portals and other such Web 2.0 properties has led to a severe fragmentation of the online world, posing substantial challenges when it comes to monetising even the most popular portals, and also to identifying which sites offer the best route for advertising brands. Moreover, established media companies are confronted with the need to adapt their existing structures and business models to the unique demands of the web, a process which provides substantial obstacles of its own.

In an effort to gain an insight into each of these trends, Randall Rothenberg, President/CEO of the IAB, chaired a keynote roundtable at ad:tech New York 2009, the panel for which included Carolyn Everson, COO/EVP of US advertising sales at MTV Networks, Jeff Levick, President, Global Advertising and Strategy, AOL, and Amy L. Banse, President of Comcast Interactive Media.

MTV makes its mark

As a largely youth-orientated brand, it could be assumed that MTV would have an automatic advantage when it comes to digital media. Its core demographic is likely to have a considerable interest in, and experience of, consuming content ranging from the latest news to their favourite shows on devices like PCs and mobile phones.

Carolyn Everson said the broadcast network is currently investing in a variety of different areas. This includes how best to make the fullest use of its existing inventory, as well as seeking to develop platforms with potential long-term significance - such as interactive television - and producing top-quality content, to "make sure Nickelodeon, MTV, Comedy Central etc. are as vital today as they have always been."

Moving forward, it will look to a mixture of paid-for and free content structures when it comes to the web, be it for broadcast material or online games, as the company seeks to establish the best model for driving revenue growth and to differentiate itself from competitors. However, this will require a nuanced appreciation of the exact role of both brands and search.

"Brands are going to have to work a lot harder to be full destination sites," said Everson. "What people may be searching for is a particular piece of content, or a show, or a talent that they're following. However, what search doesn't do for the consumer, and we still find the consumer wants, is discovery," be it up-and-coming bands or musicians, or a new series being aired on Nickelodeon.

MTV is also attempting to engage its user base by encouraging them to produce and submit their own ideas, through an initiative it calls Open Force, which is similar to crowdsourcing, but focuses on programming and movie content, rather than advertising.

"We're not sure we can even keep up, so we don't even try to some degree. We look at the audience and say 'We want you to partner with us,'" Everson said. "The notion is that we report to the audience. We want the audience to feel our channels are their channels, and so we are actually encouraging and very supportive of people producing low-budget content."

In one example of this, Paramount Pictures, which, like MTV, is owned by Viacom, backed a film called Paranormal Activity, which cost just $15,000 to make, but has generated more than $80 million in revenues to date. It received no formal communications support, but relied on word-of-mouth and consumers actively requesting that it was shown in cinemas. According to Everson, this sort of process can be described as "lightning in a bottle."

TRAILER FOR PARANORMAL ACTIVITY

With regard to marketing more broadly, Everson added that MTV is attempting to build tools that offer brands the ability assess the efficacy of their campaigns, as "we believe we need to provide tools for our advertisers to measure the ROI on our own platforms, and helping them to understand how to balance" the options available to them.

To date, she suggested that the online ad industry has been its own worst enemy with regard to measurement, as in its initial growth phase, it aimed to attract advertising dollars through promoting its high level of accountability using simple metrics like click-throughs, but neglected the contribution it made to areas such as brand-building.

"What is lacking at the moment is really good measurement to show how we are bringing through the funnel. Once we provide that for an advertiser, honestly I don't think an advertiser cares how many people are clicking on their banner. They care about 'How many Pepsi bottles have I sold in Wal-Mart in the last 24 hours, and did your promotion move people to make that choice?'" Everson argued.

In an effort to attract advertisers to its own online operations, the company has developed MTV Tribes, which groups together a range of consumer-generated and professionally-produced portals targeted at more niche demographics, and uses them as tailored ad networks. In all, some 240 publishers are now signed up to this initiative, with categories ranging from millenials to young male consumers.

"What we found from our advertisers was they were saying they trusted our content and trusted context we were giving, but they wanted more scale," Everson said. "So if I'm P&G and want to target moms, [they would say] we love your Parents Connect site, but could you also expand that scale? They love the fact that we have provided the filter to select the right blogging sites, the right small niche content sites. What we formed is called a Tribe."

Among the advantages of this strategy, she added, is that it provides advertisers with certainty regarding the websites their executions will appear on, as well as greater efficiency in terms of cost, as it is cheaper to buy up inventory across Tribe networks than premium content on MTV's main online hub.

Social media is also increasingly being employed to drive up awareness, either as part of campaigns for one of MTV's marketing partners, or for one of its own shows. However, whereas web-based communications used to aim to drive consumers to a single web portal, "now we want them to take our promotion with an advertiser or content and take it everywhere they're going. We use social media to encourage awareness of their marketing programmes, but encourage everyone to take it and make it very viral," Everson said.

AOL turns to content

AOL was a pioneer in the online advertising space, but has increasingly attempted to diversify its operations as display revenues have fallen, a development that has gained further traction under the company's recently-appointed CEO, Tim Armstrong. According to Jeff Levick, this transition has reflected one that is applicable to the internet as a whole, a change which means creativity and originality is now more important than pure functionality.

"If the first phase of the internet was getting people online and the second phase of the internet was helping people navigate… the third phase of the internet is about producing great information where people can actually spend more time engaged with information, engaged with brands, engaged with writers and things they care about. That's where we believe the next wave of the internet is going," he said.

Levick added that AOL is developing both mass and more bespoke content, including material with a strictly local flavour. In this context, co-creation takes the form of filling a demand for news and information that is not currently served on the web, and the company has hired large numbers of journalists and developers solely for this purpose.

"It's our belief that there's a lack of focus on great content, a lack of focus on producing information that people truly care about. So we're really focused on becoming the largest digital publisher in the world," he said. "At the end of the day, advertising sits next to content and that's what keeps consumers engaged and that's what gives advertisers safe places to put their brands."

One example of this is in AOL's emphasis on high-quality online video, which can be distinguished from much of the footage featured on platforms such as YouTube, which is owned by Google, and benefits from massive popularity, but exhibits mixed production values.

"YouTube is an aggregation of people who like to post; it's sort of the lowest rung of video in a sense as anyone can put it there. This is great and highly engaging, but from a top brand point of view, that's not necessarily the fastest way to get P&G to spend money… where video is going in this sense is premium content," Levick suggested.

In a similar fashion, with regard to advertising, AOL is targeting brand-based communications instead of direct response, and creating content which marketers will want to "interweave" their products with. It is also attempting to utilise its various other services, such as email and instant messaging, to disseminate both its own content and commercial communications.

To date, this strategy has paid dividends with, among others, auto manufacturers and consumer packaged goods firms, which are "for the first time really peaking their head above the fold in digital." While it is unlikely that there will be a seismic shift to online advertising in the short-term, Levick predicted there will be a limited "diving in the pool" on behalf of major companies, which is likely to take the form of highly selective media partnerships.

"This is where brands have to really think about what is my real authentic message that I have. I have to understand these audiences, and what they're doing online," he added.

Comcast takes broadcast to the web

Comcast, the cable giant, has been one of the driving forces behind the TV Everywhere initiative, which will enable subscribers to watch their favourite shows online, but will not take the free-to-consumer approach of sites like Hulu. The company is also, however, seeking to enhance it's own internet presence, in order to take advantage of changing preferences among web users.

"The internet is no longer just a search and discovery tool. I think the internet is becoming more and more a consumption tool, and as it becomes a consumption tool, you're going to have the ability for big brands to establish themselves, just as they did on the television set," said Amy L. Banse.

In order to tap into this process, Comcast has sought to strengthen its own main portal, Comcast.net - one of the top websites by unique users in the US in September, according to comScore - as well through making targeted acquisitions, like Fandango, the movie website, and Fancast, the video-on-demand service. It is also working with its sister companies such as E! and G4 as it seeks to drive up both visitor numbers and ad revenues on the web.

The ultimate aim of this activity is to help establish its online operations as "a top ten, if not a top five, entertainment portfolio," Banse said. To achieve this objective, Comcast will take a more brand-centred approach, offering high-quality content rather than trying to compete with the large number of more generic rivals already in existence, and thus to build assets with long-term value in the online arena.

"Brands make a difference there, and I think we've invested in our brands, whether or not it's Fandago or E! or Fancast, and I think they will continue to perform for us and for the people who choose to advertise with us," added Banse. "People are coming to these brands and staying on these brands, and giving advertisers a great opportunity to reach their customers there."

Among the further advantages offered by the internet is that it gives people the ability to consume programmes in a number of different ways, and at a time of their own choosing. Furthermore, the statistics available on individual netizens, even those as simple as zip codes, allow for more targeted communications for brand owners, in a similar fashion to addressable TV advertising, which is another area of heightened interest for Comcast.

The internet as a whole, and social media in particular, is similarly enabling the company to modify its approach to marketing, and achieve greater engagement with its audience. "Historically, it has always been a push mechanism, but what the online affords you is an interactivity that we've never seen before… that sort of immediate interaction with the customer is ideal," Banse said.

"Social is clearly a critical part of an online experience at this point in time… the way we've been using it to date is more as a tool to gauge consumer reactions to our products, and to our marketing campaigns for that matter." This has included utilising Twitter to monitor feedback to a recent primetime campaign supporting Fancast, and "there's no doubt it's very valuable to use in that respect," Banse concluded.

Few conference speakers can claim to enjoy the pulling power of Sir Martin Sorrell, chief executive of WPP Group, the agency holding company. Since acquiring a large stake in Wire and Plastic Products in 1986, Sorrell has transformed the organisation from a little-known manufacturer of shopfittings and supermarket baskets to the world's largest marketing services conglomerate by revenue, overtaking its main rival, Omnicom Group, last year.

Appearing for the first time at an ad:tech event, the diminutive adman decided to speak "among" the audience in New York rather than from the stage. He also eschewed the traditional PowerPoint prop, preferring to give a topline view "of how we see things at the moment, and putting that into the context of what we are trying to do as a business."

Discussing advertiser spending, he painted what is by now a familiarly gloomy picture. "Clients are totally focused on cost. If you look at the results of companies … there's one thing that you really notice: apart from Google, Apple, Amazon and one or two others, very few people are increasing their revenues. They're getting there ugly," such as by cutting costs and lowering expectations, he said.

This is despite all the available statistical evidence pointing "to the fact that companies that invest in brands in times like these benefit when we come out of recession … Sadly, that is not what is happening. Most companies say they maintained their spending, or if they have cut it, they have cut it by media deflation. That can't be true, because the traditional media market is down by 10% or 15%," he added.

More broadly, Sorrell outlined three "strategic priorities" which are of central importance to WPP as it seeks to respond to the longer-term changes taking place in the overall trading environment - a geographical shift of power away from developed economies, the growth of digital media and the increasing importance of retail. What they have in common, he suggested, is that they are all "guiding the way that our clients think about their business."

The rise of developing economies

"We are in my view approaching a decade where the attention of the world is going to increasingly be on Latin America as well as the BRICs and the Next 11. This shift in power is considerable," Sorrell said. This will result in a transfer in influence "which I still don't think we fully understand here in New York, from West to the East," as well as to Latin America.

The recent decision to award the 2016 Olympic Games to Rio de Janeiro is just one example of this process, as is the growing strength of China Mobile, which is the most valuable brand anywhere outside the US, according to Millward Brown's most recent BrandZ analysis.

The Chinese telecoms giant has some 500 million subscribers at present, out of 700 million cellphone owners in its home country. The number of people in China using wireless devices is also growing by around 8 million people a month, and not only does China Mobile have a potential domestic user base of 1.3 billion, but there are a possible further 200 million citizens not accounted for by the government's statistics. It is also now expanding its reach in both Pakistan and Taiwan, indicating its growing influence abroad.

In further demonstration of the importance of markets such as China and Brazil, Sorrell said "every single client that we deal with is focusing on those parts of the world for growth." WPP is also looking to boost the share of its revenues from these areas from around a quarter at present to 33% in five years time. Even without making any acquisitions, it would probably come within a percentage point or two of achieving this aim, Sorrell said.

The move to digital

Similarly, it is seeking to boost the proportion of total sales generated via new media by around the same margin. Sorrell stated that clients, on average, currently direct around 12% of their worldwide budgets to digital channels, while consumers are spending around 20% of their media time on the web. Morgan Stanley recently estimated that this figure is now as high as 28% in the US.

In attempting to establish why marketers are not matching the behaviour of their customers in this way, Sorrell posited that "people who run clients, media owners and agencies tend to be of an older vintage, they tend to be resistant to change … We all feel uncomfortable with change." Looking forward, however, he predicted "there's a natural gravitational pull to 20% or 25%, I would say, this is a guess, in the next five years" as far as client spending priorities are concerned.

Last year also marked the first time that a new intake of American students going to university had been exposed to the internet for their entire lives, and this sort of generational shift will require brand owners to act accordingly. "When it does happen, it is going to be quite significant. And I'm using the word 'quite' in the American sense, which means very significant," said Sorrell.

Consumer insight will form the last core aspect of WPP's strategy going forward. It completed the acquisition of TNS, the research firm, last year, a purchase which made it the fourth largest information services firm in the world, behind Thomson Reuters, Bloomberg and Nielsen, and the company now aims to more closely integrate this section of its activity with its digital and emerging markets arms.

"If we were starting the business from scratch we probably would try and bring together those three pieces of the business in a much more intense fashion than we have done, and probably over time we will be bringing them closer together," Sorrell said.

"We're certainly not an advertising agency any more," he added. "It's changed dramatically. If I came back … in five years time, WPP would be more Asian, more Latin American, more African and Middle Eastern, more outside traditional media and more about the quantitative justification for what we're doing."

Other key areas Sorrell highlighted as being of future importance are the overcapacity in a wide number of product categories, such as the automotive sector, home of WPP's biggest client, Ford. Most countries will also soon house ageing populations, meaning there will be an "under-capacity" in terms of the amount of talent available to businesses, leading to intensified competition.

With regard to media, more newspapers and magazines will close in many countries, and there will have to be further consolidation in this industry as a whole. Moreover, as Rupert Murdoch has argued, the move towards requiring consumers to pay to access certain forms of online content will be a crucial source of income for these publications, Sorrell suggested.

Retail power

Retail is another important area, as "some of the most fundamental changes that are taking place in new media are being generated at the retail level." This is partly due to the size of retailers such as Wal-Mart, which recorded retail sales just behind those registered in the whole of China last year, and which takes around 30% of all grocery revenues in the US. Tesco takes a similar share of the grocery market in the UK, and as these chains are becoming more global in nature, it will give them an "immense buying power, which they will use as leverage" with manufacturers.

"The other thing about retail which is really fascinating: they are the people that move fastest," Sorrell said. "In the recession, the companies that really understood the changes that were taking place in terms of price points and consumer behaviour were the retailers, because they deal with us as consumers on a day-to-day basis … so retail, and the growth of retail, I think is going to become an increasingly powerful thing."

However, many consumer packaged goods companies are also now attempting to forge direct links with consumers, as evidenced by Procter & Gamble taking a stake in Ocado, the UK online direct delivery firm. Governments are also more important clients for many firms as their involvement in the economy has grown, while corporate social responsibility is essentially now in the mainstream, with the establishment of the Gates Foundation as one of the key drivers of this development.

"The companies that will win, and you see it continuously, are those people that innovate successfully in all the areas I mentioned, and brand successfully," Sorrell concluded. "In an era of transparency, you can have innovation without branding, but you can't have branding without innovation."

Stephen Whiteside will be reporting from ad:tech New York, where over 200 speakers and panelists will be addressing topics including online video ads, social media and multi-channel marketing.

Check back during the conference for his daily reports.