Leonsis to Advertisers: ‘Shift Happens’

NEW YORK — Amid all the talk of a socializing Web where advertisers need to transmit their messages virally by getting into the conversations taking place among friends, the idea of direct marketing isn’t what it used to be.

So at the biannual convention of the Direct Marketing Association, “Shift Happens” seemed a fitting title for the opening keynote. It was delivered by Ted Leonsis, who currently holds the position of vice chairman emeritus at AOL, a unit of Time Warner (NYSE: TWX).

“You have a big job,” Leonsis told the audience. “You have to reinvent what you’re doing for this new consumer with these new media applications.”

The short list of applications is by now familiar to anyone with the faintest understanding of the Web 2.0 phenomenon: Facebook, YouTube, Digg — to name a few. For marketers, planting a flag in these environments is important, of course, because that’s where people are spending more of their time, but also because they signify the new way that people expect to be marketed to, Leonsis argued.

But for advertisers, fitting their brands into new-media schemes can be tricky. It entails a process of giving up control that many find “anathema,” Leonsis said. But like it or not, in the conversational context of the communities bubbling up all over the Web, advertisers must meet consumers on their own terms.

“For the first time, the steering wheel is totally in the hands of the consumer,” he said. “And frankly, they don’t want a lot of what you have to say and what you have to sell.”

Essentially, the point that Leonsis was making is that the top-down model of advertising, in which a company broadcasts a message to the masses, who then passively absorb it, does not translate to the online realm.

Leonsis is certainly not the first to note that the interactive qualities of the Web might call for a different form of advertising. Finding a way to make ads work on the social networks, which have one of the most engaged and loyal audiences of any sector of the Web, is a great question facing the industry today.

Advertisers are struggling with the best way to pair ads with online videos, recognizing now that the traditional TV-style spot doesn’t work.

Looking farther over the horizon, advertisers dream of getting their consumers to become their own voluntary spokespeople, happily passing along branded messages to their friends, or even creating their own content around the product in what’s known as consumer-generated advertising.

So if the Web 2.0 phenomenon is chipping away at the one-to-many communication model, advertisers will have to change their tone, Leonsis argued. Younger, savvier consumers will no longer tolerate what he called the “sleight of hand” practiced by traditional marketers.

“They can smell inauthenticity a mile away. The worst thing you can be perceived as a marketer is inauthentic, he said. “If you don’t have the trust of the consumer, nothing will work.”

But it’s going to have to work, simply because of the way that consumers’ media habits are trending. Citing Nielsen data, Leonsis said that the Internet accounts for about 20 percent of the time people spend interacting with media. However, he added that just 9 percent of ad dollars is spent online.

So Leonsis offered what he called his global Internet thesis: 15 percent year-to-year user growth, and 30 percent growth in monetization for the foreseeable future.

It’s the same set of growing pains that the cable industry went through, in which, Leonsis said, it took a full two decades for the ad spend to catch up with the time people were spending with the media.

“That’s why I believe the new media has become the media,” he explained.

Of course, individual media consumption can only be a portion of the 24-hour day, so with attention migrating online, Leonsis offered a bleak prognosis for the print industry. Younger consumers did not grow up with the ritual of the morning newspaper, so the sentimental attachment to that experience is not going to last, he said.

“There is nothing good or positive that will happen to print industries over the next 10 years,” Leonsis declared.

If the media landscape evolves as he expects, his “10 years” might easily stretch into “forever.” But hey, shift happens.

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