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Advertising Must Adapt

5/11/2007 8:00 PM Eastern

Las Vegas — “Change or die” might have been the alternate panel title for the Wednesday general session of The Cable Show, where cable executives and Budweiser's global media guru discussed attempts to follow consumers as they migrate to new media.

Anheuser-Busch's vice president for global media and sports marketing, Tony Ponturo, said his beer brands have stayed on top for 50 years by advertising in high-profile events like the Super Bowl, utilizing buzz-worthy creative, building regional and ethnic relevance into its messaging and placing advertising across all platforms. The strategies have gained the company a 49% market share of the beer market, he said.

BROADBAND BRANCH

Like other companies, the beer manufacturer has branched into broadband with its own channel, Bud.TV. “We're becoming part of the media, not just buying it,” Ponturo said.

But during questioning after the session, Ponturo conceded that response to the broadband site, launched in February to “reach the millennial consumer,” has been disappointing with few visitors to date. The company may shift its focus to the social aspect of the site, he said.

Meanwhile, the beer company continues to be a big supporter of old media: 60% of its ad budget is still spent on television advertising, with spots on 30 cable networks from Fine Living to ESPN. But since research shows 21-to-34-year-olds now spend at least six hours a day on the Internet, Anheuser-Busch now spends 10% of its advertising budget in the digital realm, including 65 third-party sites and 35 of its beer brand websites. Advertising was once placed on generic networks where it would be seen by tens of millions, but with a lot of waste. Today companies can advertise to a smaller audience on a niche network but with virtually no waste, he said.

Cable executives noted that future challenges to multi-platform content providers include educating ad agencies to help their clients place ads on all possible platforms; and to figure out on-air advertising strategies in video-on-demand.

On the former issue, Oxygen Media has had some success, working with Procter & Gamble's ad agency, Mediavest, to create a multi-level advertising partnership focused on the Big Girl Beauty Pageant, said Lisa Gersh, president and COO of Oxygen. The partners created a Web site for the show and copromoted audition events in six spots around the country where visitors could get makeovers with the sponsor's products. But most of the time, she said, networks have to deal with different agencies to get plans for each potential platform.

VOD programmers still have to figure out the acceptable type and format for advertising on the platform. Ponturo predicted that 30-second ad spots will not survive on the Internet. Landel Hobbs, COO of Time Warner Cable, noted that users of the operator's Start Over product “don't seem to mind the ads.” That product does not allow fast-forwarding through advertisement, he noted. He said the company is on track to do a billion VOD streams this year.

Consumers “are fine with ads as long as they can time shift,” he said.

DYNAMIC ADS NEEDED

But Gersh stressed that operators have must get dynamic ad insertion in place. “The longer VOD appears without ads, the more consumers will expect them to remain ad free,” she said.

The executives were split on the future of television's most visible ad marketplace: the upfronts. Gersh predicted they would be extinct for cable networks before very long, because advertisers are buying cable 52 weeks a year. Discovery Communications CEO David Zaslav said the upfronts will important but the pitches have to be relevant. His teams talked to advertisers in advance, seeking input on trends such as “green” programming initiatives, so Discovery could pitch clients what they want, he said.

 

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