We knew when developing the agenda for OPS that we couldn’t just have operations people say that ops was sexy. We needed an icon in the industry to help drive that point home and end the day with everyone buzzing about all the great things operations is. We were extremely fortunate to be able to get Jack Myers, media economist and chairman of the Media Advisory Group to help us end a fantastic day and really drive the point home.
Jack Myers and Rob Beeler wrapped up the OPS NY event by discussing media, transparency, apps, paywalls and of course, why ops is sexy. This blog is the third in a five part series. Watch the video and read the transcript of the presentation.
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Jack: I kind of look at it like the online industry, especially as we’re moving toward an apps model, especially as we’re moving increasingly into mobile, you know, real-time bidding, you’ve got so much going on that what’s lacking here is a highway system that’s a standardized highway and set of highways that people can have an exit ramp and entrance ramps, and then you can have your network of streets once you’re off the highway and localize them. But what’s missing in the online business is that super highway that is a standardized set of operational rules for the industry that can then be structured. Everyone is developing their own little network, their own little community with their own little streets and they’re not intersecting, they’re not overlapping, there’s nothing connecting them. The Internet is perceived as the super-highway, and it’s not, especially as we move into ops and more models are developed that tap into the infrastructure of the Internet but don’t necessarily use it as a browser-based system.
Rob: I think it’s important, though, right, that highway be driven from both sides, because I’d say from a publisher perspective you see a lot of these moves toward {DSBs and RTBs} and people are claiming they’re helping make that highway, but it’s going one direction and not to…
Jack: {Addressing crowd} How many people here are with companies that are VC or investor funded. I’m a little surprised it’s not more. But I think one of the big issues in the industry, especially on the operational side when we see the {Savian} charts put up and we see all the ad sales networks and the DSPs and the SSPs and the infrastructure companies and the research companies is, this is an industry being funded by VCs and investors, as opposed to being funded because there’s demand for the business. The traditional media really took off and grew when advertisers discovered it, and then it built on the back of advertising demand. And for five decades in the media industry, we had demand exceeding supply. Now we’ve got, for the next five decades, supply exceeding demand, and everyone is investing in companies and services, technologies, capabilities, on the assumption that if we build it, the advertisers will come.
Well, you look at a lot of realities like behavioral targeting and a lot of other aspects that have been built on the assumption that advertisers will come, and advertisers essentially said, “well that’s a good opportunity to further commoditize and drive down pricing.” So we’ve now got incredibly low {display} at pricing, which will continue to be low. We’ve going to see a lot more video advertising availabilities and costs will steadily decline and will probably settle in at somewhere around 30% of television’s CPMs, and now they’re twice what TV CPMs are.
We’re going to see—the complexity that we now in the internet, we’re going to see in mobile, and the number of players all doing their own thing and all trying to build their own unique model and their own mousetrap and their own patents and their own unique offerings are basically being used by the industry to drive commoditization as opposed to driving value. And I think the industry needs to take a few steps back and look at where the real need and demand of value is as opposed to where the technological opportunity is.
Rob: A couple weeks ago when we were talking, you talked about apps. You had your iPad, and you were talking about how the impact of apps…
Jack: Yeah, I think apps is a complete game-changer. When you look at what Samsumg and other TV manufacturers are putting out now with the Bluetooth and WiFi connectivity to the mobile device and to the laptop and to the pad, I think it’s just realistic. I’m not saying anything unique or unrealistic when I say when you turn on your television, this is what it’s going to look like {holds up iPad}. And whether it’s the TV or Bluetooth connected to the Internet or whatever it is, we’re moving toward an app-based media model where your magazine will be here. I have Bravo TV, I have ABC.com, I have TV.com, which is CBS, I have People, I have Wired, I have Sports Illustrated. I have weather, New York Times, Facebook, and they’re all being integrated. I think it’s hard to look at the television and social media and an app-based model and develop a scenario that doesn’t interconnect them. We’re already seeing a number of VC-funded companies coming along that are integrating the television and social media and the mobile device.
Rob: Now is that an opportunity perhaps again whether to simplify…
Jack: I think it really complicates advertising…every cable network, every broadcast-network, every TV programmer has to be looking at social media options and opportunities and figure out how to tap into those monetization streams. The broadcast industry especially is doing a pretty poor job of it. A couple cable networks are doing a pretty good job of it where you see the opportunity to integrate the social media in real-time basis. But more and more we’re going to see real-time social-networking, friends, chatting back and forth live during sports and that is an advertising and marketing opportunity, but I think it’s a very challenging one for the marketers.
And in addition to which you’ve got marketers who are looking at themselves as media companies. I was with Matt Van Dyke from Ford the other day and talking about the sync product, and he looks at the automobile Ford as a medium now. It’s a moving medium, and whether it’s the sync to Pandora that they announced the other day, that creates in-car advertising opportunities—not just for Ford, but for others. Or the TV in the back seat. Ford is thinking, how do we maintain and build better communications and relationships on a social basis with our drivers while they’re in our vehicle.
Rob: So they’re building cars and thinking about ad products…
Jack: Yes…
Rob: We had a conversation with {?} Kramer as well on that same front, that a lot more companies are going to see themselves as media companies, and you don’t traditionally think of that. I think that obviously has a chance at…
Jack: Well, Coca-Cola, with Pepsi Refresh, they look at that as media properties. Coke owns digital billboards around the country. They own media properties. More and more, Walmart looks at itself as, in-store, any retailer looks at the in-store; any mall owners looking inside the malls; Starbucks looks at itself as a media distribution point, so we’re seeing… I kind of look at it in a Gestalt view, in comparison to what happened one hundred years ago starting in 1890 when Henry Ford designed and built the first assembly line and the oil refineries and the steel plants and we moved from the agrarian age to the industrial age. It was a thirty-year process that began in 1890 and ended with World War I in 1919-1920. People moved from the country to the city, radical change in culture and society. It was the real beginning of mass media, magazines all of a sudden began to blow up and emerge. You look at Ladies Home Journal from 1892 and you look at one from 1915 and it’s radical. It’s like looking at black-and-white television versus interactive color television.
Right now, we’re right in the middle of a thirty-year transformation from the industrial-information age to what I call the “relationship age.” And that’s really beginning with the Mosaic, the first web browser in 1993. So, kind of a similar time period a hundred years later, we’re 17 years in to another thirty-year transition. So we’re right in the middle of this huge transformative period that’ll be as radical as half the population of the country, moving from farms to the city.
Rob: So if we had AdMonsters in 1899 or so, we’d be having this whole issue of how do we…
Jack: It would be newspapers…
{Talking at once}
Jack: …it would be, how do you lay out a newspaper by hand?
Rob: We didn’t take pictures back then… I’m going to completely throw another direction at you here. The paywall approach to media…
Part 1 | Part 2 | Part 3 | Part 4 | Part 5
We knew when developing the agenda for OPS that we couldn’t just have operations people say that ops was sexy. We needed an icon in the industry to help drive that point home and end the day with everyone buzzing about all the great things operations is. We were extremely fortunate to be able to get Jack Myers, media economist and chairman of the Media Advisory Group to help us end a fantastic day and really drive the point home.
We continue the conversation with Jack Myers, media economist and chairman of the Media Advisory Group and Rob Beeler at the OPS NY event. During the wrap up session they discussed media, transparency, apps, paywalls and of course, why ops is sexy. This blog is the third in a five part series. Watch the video and read the transcript of the presentation.