Thursday, November 16, 2006

ad:tech New York 2006

It is only fitting that ad:Tech NY takes place immediately following the New York City marathon. Runners proudly brandish their medals from this year’s race are seen throughout the Hilton’s hotel lobby now competing for space with runners of a very different stripe – the internet marketing professional. These “runners” are here for a very different race. We are here scrambling from booth, to meeting, to seminar, to keynote, to coffee meeting, to cocktail lounge, to sponsor party, to keynote address in search of that illusive, but plainly apparent, finish line: the well placed contact or piece of intelligence that will catapult each attendee (and participating company) to ever greater revenues and marketshare—and yes, bragging rights for world dominance.

Predictably, with the recent acquisition of YouTube and the growing market share of MySpace, much of the conversation from the speaker’s podium focused on video ontent powered by the now wide adoption of broadbrand. Video (and rich media content in general) is creating new opportunities to engage consumers and generate sales revenues for brand marketers and the ad sales infrastructure that supports them. To highlight this intersection of dependency and opportunity, Tuesday’s keynote panel presentation, “ The Online Video Revolution: A Marketer’s Dream or a Consumer Generated Mess?”, included execs from traditional media (CNN), new media (YouTube), agencies (Isobar) and infrastructure (Akamai).

L-R: Drew Ianni, AdTech Chair, Paul Sagan, President & CEO, Akamai Techologies. Sarah Fay, Isobar Communications (Carat Fusion, Freestyle, Molecular & iProspect), Jonathan Klien, President, CNN USA, Suzie Reider, CMO, YouTube, AdTech 2006 Keynote panel, Tuesday, November 7, 2006, New York City (Photo Credit: (c) 2006 Mark Ippolit0)

Several of the speakers chose to contrast the capabilities of content delivery and internet marketing of 2006 to where the industry was 10 years ago. Akamai CEO, Paul Sagan, who during the 1990’s was President for New Media at Time Warner, was struck with how long it took us to get here. He recalled forecasting in 1996 that broadband would have 70% penetration by 1999. CNN USA President Jonathan Klein commented that now sees over 50MM uniques per month and has over 3MM downloads of video new stories each of which engage views for 2 minutes per video with users on average downloading 3-4 stories per session for approximately 12-15 minutes of total viewing. He also commented “pre-roll and post-roll inventory was sold out thru Q4 of this year” and appeared generally bullish about the prospects for online video (ed note: it would have been interesting to hear him comment on whether the growth in online ad sales will come at the expense of CNN’s traditional broadcast business.)

While not specifying the number of streams or downloads, YouTube CMO Suzy Reider, indicated her chief concern that “there is a coming glut of video inventory” from user generated content sites like YouTube (CNN also aggregates UGC via its iReport news channel) and foesaw “depression of prices in the year ahead.” She claimed YouTube was currently enjoying “CPMs in the $20 - $30 range”. Interesting to note that the ad sales organization at YouTube reports to the office of the CMO (Ms Reider’s background is in media sales at CNET and Ziff Davis).

Sarah Fay from Isobar (whose agencies include Carat Fusion, Freestyle, Molecular & iProspect) commented that as a buyer the focus for metrics continues to be engagement and while standard metrics have yet to emerge (and remain somewhat elusive), but confirmed that advertisers are tracking values such as length of viewing as proxies for engagement. Advertisers also continue to fund development at interactive agencies visa vis measurement technologies and investments in media strategy and planning expertise. She cited her own company’s growth from just a few hundred employees in 2003 to over 1600 worldwide.

Jupiter Research released its forecast for Internet ad spending in the US over the next 5 years. With consumers spending as much time online as watching TV the shift of dollars from offline media to online is expected to grow. Biggest investors in online advertising are projected to come from the following verticals: music, entertainment, financial services, travel and automotive.

Mobile advertising was also a thread that was evident in both the sessions and the exhibitors. In the “Now & Next Tech Show” innovation pavilion, all of the emerging companies that were on display were focused on the mobile advertising space. Most were showcasing applications and content (gaming) that have advertising embedded. A number of analytics companies were also in evidence.

(If you’d like to learn more about what was being discussed at the 30+ sessions that took place over the 2 1/2 days, ad:Tech thoughtfully provides a public link to all of the presentations which are shown at the event: /presentations)

Most of the action I witnessed was on the show floor itself. This year the exhibit space was spread over 3 full floors of the Hilton’s conference space. Over 10,000 attended the show cramming the aisles, coffee lines and conference rooms. While some complained about the unusually tight hallways and aisles, there were others who like the buzz and sense of urgency that having too many people buzzing about creates for the show. We’ll see what happens: ad:Tech completes their lease agreement with Hilton (ending in 2007) and will determine if the NY event will be moved to the Javits Center to better accommodate future increased attendance.

Quantity does not equal Quality: While we were pleased in the growth in attendance (we saw our raw number of leads captured during the show shoot up 5 fold over 2005), ad:tech seems to be stuck in rut in not attracting visitors outside its core constituents of ad networks, affiliate marketers and service providers. Few if any actual direct advertisers or top interactive agency contacts were in attendance. Considering NY is the financial, media and advertising capital of North America (if not the world) it is perplexing to see so few actual advertisers in attendance.


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