KEY POINTS:
Executives at Martha Stewart Living Omnimedia took great pains this year to make certain the company's redesigned website looked flawless before rolling it out to the public.
After all, this is a media company whose magazines, books, products and programmes feature ideas about attractive and tasteful lifestyles. Why not a beautiful website?
"That was a big mistake," Wenda Harris Millard, the company's president of media, said during a panel discussion at Advertising Week in New York. "We put beauty before utility."
She said the front page, with its video player and jazzy graphics, included only about five links to actual content, "so the things people were looking for couldn't be found".
The mistake was in failing to understand that "when the reader or viewer or listener becomes the user, what she's looking for is much different - at least initially".
Indeed, many executives attending the fourth annual Advertising Week conference admitted that they had misjudged exactly what consumers wanted these days. Figuring that out might be the advertising and media industry's top challenge, they said.
One reason is that consumers today can afford to be more demanding. They can choose among television, radio and magazines, or skip those altogether in favour of video games, music downloads and text messaging.
Today's audience also depends less on media companies for the entertainment itself, executives pointed out. User-generated content like a friend's video or a stranger's blog may suit a consumer's taste more than a film, TV show or song offered by a major corporation.
Even at Facebook, the social network that has become a hot spot for young adults, executives could misjudge their audience, said Mike Murphy, vice-president of media sales.
Among its missteps, he noted, was the company's introduction of an automated news feed showing what acquaintances were doing on their own Facebook profile pages - a sort of gossip column among friends.
When Facebook introduced the feature, Murphy said, members temporarily revolted until it introduced greater controls over what information their friends could see.
The site learned it must "communicate and educate" its users and "take into consideration what the audience is looking for" before launching a product or feature.
Murphy also said media companies and advertisers should be realistic about their place in the minds of consumers. "This is a market that will punish brands for pretending to be something they are not," he said.
Beth Comstock, president, integrated media, at NBC Universal, also conceded a number of missteps. "I could probably fill an encyclopedia with the mistakes we've made over the last year," she said on an Advertising Week panel.
One was the company's approach to the audience on iVillage, the internet community site for women that NBC Universal bought for US$600 million ($785 million).
"We knew there was this powerful community, but we didn't understand how powerful and what turned them on," said Comstock.
She also said some in the industry had mistakenly predicted last year that "premium content is dead - it's all about user-generated". Instead, she said, the media "pie has gotten bigger - and there are audiences for both" types.
That holds true when it comes to advertising, too, which in the last year has seen a number of companies employ user-generated ads in campaigns.
Unilever is among those, having put together a consumer-produced ad to promote a Dove product during last year's Academy Awards.
"There are going to be lots of places for consumers to play a role, but I don't see them replacing the professionals," said Babs Rangaiah, director of media planning for Unilever USA.
Still, he said, user-generated was not going away. "Big media has essentially controlled all the creation of content and distribution," he said. "Now that is available to consumers and that's a big thing that is here to stay."
Online ad growth quickens
United States online advertising revenue surged to a new high of nearly US$10 billion ($13 billon) in the first half of the year, rising 27 per cent from a year before, the latest data shows.
The figures from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers underscore how quickly spending by marketers is shifting to the internet, often at the expense of traditional media such as newspapers or radio.
"The torrid growth of interactive advertising revenue persists and these results are really no surprise, but very welcome news," said IAB chief executive Randall Rothenberg.
"Advertisers recognise the continued growth in the online audience and the growing opportunity to target and monetise that audience," said Pete Petrusky, a director of the entertainment, media and communications practice at PricewaterhouseCoopers.
One outgrowth of the boom is that media and technology companies are building up their online advertising businesses, partly through acquisitions.
Among recent deals, Google agreed to pay US$3.1 billion for ad serving and tracking company DoubleClick, while Microsoft bought online marketer aQuantive for US$6 billion.
For now, most internet spending is concentrated on the most popular sites.
The top 50 websites accounted for more than 90 per cent of the revenue from online advertising spending in the first half of the year and the top 10 sites accounted for 70 per cent, the data shows.
Search advertising, led by Google, remained the most popular form of online marketing and accounted for 41 per cent of the money spent at US$4.1 billion in the first half of this year.
Graphic display advertising, such as banners, grew to account for 32 per cent at US$3.2 billion, compared with US$2.4 billion in the year-earlier period.
The figures showed that online advertising was also growing quickly in Britain, up by 41 per cent in the first half of this year, to give it a market share of almost 15 per cent.
Online ad spending in Britain could reach a high of £2.75 billion ($7.3 billion) by the end of the year.
The growth puts online ad spending above the size of the direct mail sector, which had a market share of 11.8 per cent.
- Reuters
