Classic David Verklin Part 2:<br> Interactive TV Vision from 2000 Still Relevant Today

In October 2000, David Verklin delivered a key note address at the Third JackMyers Forum for Interactive Television Development. Verklin, now, CEO,Aegis Media Americas, had delivered the keynote at the first JackMyers Forum a year earlier. To read that presentation, visit JackMyers.com. Following is Verklin's perspective of the future in October 2000. It is fascinating to read this in the context of the slow evolution of interactive TV and to understand how relevant Verklin's words and ideas still are

Jack Myers: "At our very first forum David Verklin, the CEO of Carat Americas, led off this event with a rousing call to action for the industry, and it was extraordinarily well received and I think one of the most important presentations that our industry has seen in a long, long time. Those of you, who were here for it, know that not only was it a catalyst for that day, but it's been somewhat a catalyst for our industry. We asked David to come back to bring us up to date a year later, on where he sees the industry today and how he sees it moving, not only for his company and the advertising agency business, for advertisers, but for technology platforms and the media also. David Verklin.

Thanks for being here."

 

David Verklin:"(Thank you) Hello everyone. Wow, I didn’t think that speech was that good to tell you the truth. I am honored to be here, absolutely honored. What a day, what a subject! How Will Interactive Television Change Advertising? New Media, New Measures, New Models. If I leave you with anything today, I would leave you with one thought. What a time to be in our business. What a time to be in the American media business. Change is in the air. We are at the threshold of a revolution, and when you are asked by your children, where were you during the revolution? You can say; you are here: I was in the middle of it. The world is changing and we stand on its threshold. Thanks so much for allowing me to speak today. As you can tell already I am excited about interactive television and I am excited about being here. I remember speaking to the first forum a little over a year ago. Now what are we on, our third forum? Look at how this idea has grown. Look at what has happened to this nascent industry. By way of background, just a little bit about who Carat is, and why interactive television is important to me and to our company. Carat is one of the largest buyers of advertising time and space in the world.  We buy 12 billion dollars worth of advertising time and space around the world, each year.

 

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Ladies and gentlemen, six billion dollars of that 12 billion dollars is in one way, shape or form, derived from television. How can we not be interested? If interactive television has the potential to change the role of a 30-second television commercial and to affect the consumers ability to receive it, our industry and our company must be interested and must be involved. So we intend and have tried to be participants in the changing role of interactive television from the very beginning and we are going to continue to stay involved. It's our contention that everybody in the food chain of television needs to get involved, get interested, get educated, but most of all, get excited. The revolution is coming and we think it's going to be great. You are going to hear a lot of that today; you are going to hear a lot of enthusiasm, a lot of people talking about their technologies and a lot of excitement. That's not my role today however. No, no PowerPoint presentations for me today, rather, I'd like to get pragmatic. I'd like to get pragmatic today.

 

I'd like to offer today, six objective things, that we, as an industry, need to do right now.Not blue sky thinking, not another oracle of the obvious, standing up here in front of you, telling you all the great things that are going to happen, let's talk about six things that we need to do, right now -- in the next six months -- as an industry to move the business of interactive television forward.

 

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Let me just add, and some of you have heard me speak before, I will make my usual, you know, six predictions about the future and get on with it and then let's get pragmatic.

 

I've said in the past and I'll say again, that interactive television is the next great revolution in advertising. I said before and I'll say again, that interactive television will change the role of a 30-second television commercial as we currently know it.   Interactive television will provide an enormous array of advertising possibilities to clients, and agencies alike. That interactive television will create opportunities for mass customization of messages. That interactive television will become one of the best selling consumer electronic devices that we have ever seen. And lastly and most importantly, that interactive television will change the status quo.

 

Hooray! The status quo ain't that great. So, the only one problem with my predictions, you have to be careful in the interactive TV space, because things are moving so fast, it's one of the few areas where you can make a prediction and you can't get out of town fast enough before they can actually find out if they become true or not. But no, I am not going to focus on those areas today, if you don't mind. I'd like to talk about six pragmatic ideas that we can do to move the industry forward and of course those ideas come from the view of a large buyer of advertising time and space.

 

Six Pragmatic Ideas for Moving ITV Forward

 

Let me begin by speaking to those of you that are developing new interactive technologies and platforms.

 

First recommendation,a pragmatic recommendation: You need to start showing the technologies and the platforms to the middle and junior management of ad agencies and media departments. I know at first that's counter-intuitive, because when you are a developer and you have new technology, you always want to show it to a heavy breeder like me. You always want to bring it out to the upper end of the organization. That's fine. But you know what? It's time to start exposing the technology to middle and in fact, junior people. Do you know why? Because we need a brush fire. There is resistance still and concern about the future. What we need to do is look within the media agencies and media departments for champions.

 

You know what a champion is? At a media department, a champion is not a decision maker. A champion is the person that pushes the decision maker to make a decision. And what we need to do in the interactive television business, I believe, is to begin exposing the technology to younger and junior people. Why is this important? Because these are the people who are the most open to change, these are the people that will drive the industry forward and these are the people that aren't hooked into the concerns of the past, and the old ways of the past. I know for those of you that are developers that your sales forces are small and there are not a lot of you. And you will say, well David, now how can I call on to junior managers when I can barely find the time to call on senior managers? Well I would ask you: try to do one or two calls among junior people, a week. See if you can set up a session at an ad agency where you are demoing the technology to young people. I’ll tell you when you do that the young people will flock to it. So the first recommendation is, are you showing your technology to young people and can we as an industry, begin exposing it today. Right now, the real knowledge of interactive television in the agency business is at the higher levels. Next, for your agencies, where does interactive television reside within your organization? Is it owned by the internet group, is it owned by your network television buying group, or is it owned by your direct response media experts?

 

Our recommendationand what we would suggest, is that the future is not about the internet, the future is about interactivity. What we have done and what we would recommend is we’ve re-launched our internet operation, Carat Interactive, from a banner and button focused company to a multi-platform interactivity company. We’ve invested millions of dollars of our own venture capital to create a company whose practice is focused on multi-platform interactivity. You know, the question is, who, within the agency business, will own this space? We would recommend that the internet practices of today’s agencies be converted from the internet practice to multi-platform interactivity practices. If you are interested in learning more about how we’ve done this, Sarah Fay is here today, Sarah is the President of Carat Interactive in Boston and she will tell you exactly about how we are trying to convert a banner and button buying practice into an interactivity practice. Sadly, I don’t know how you feel about banner ads these days, but the banner is feeling a bit like a buggy whip to me. And we need to be able to look at interactive television in a new way and go beyond the internet.

 

Third,as an industry, as developers, as programmers and as users, we must, right now, today, starting here, begin to discuss and focus on, agreed-on measurement and data collection protocols. The sessions today and Jack’s focus about research is really critical for the future of the interactive television industry going forward. I’ll tell you why. Certainly, the idea of a rating point, to me, is starting to feel pretty obsolete in a world of interactive television. How does it feel to you? But you know, if you think about it, as an industry, we never really thought about this with the internet. We never really got our act together with the internet and what did we end up with as an industry? Banners, click-through, pageviews and CPM’s. Is that what we are going to do with interactive television? There are great gravitational forces, to turn the interactive television business into accepted data collection protocols. I mean I would make you a challenge our demographic breaks relevant in interactive television.

 

Do we really care whose watching or do we only care about action taken? We really need to begin to think about what the measurement protocols will be on interactive television. We need to suggest what data is important, how it will come out, what standards need to be set, and how we are all going to use it and how we are all going to get it. As I said, our industry didn’t think about this with the internet, and we ended up with a measurement protocol on the internet that none of us like and an advertising effort on the internet, which is fundamentally flawed. We need to make up and not mess up the potential of interactive television.

 

There are some initiatives that are going on in the industry that we support and we would recommend that you support. Art Cohen at ACTV has created the Addressable Media Coalition, it’s a good idea. The Advertising Research Foundation (ARF) is very interested in the space, it’s a good idea. The AAAA’s have created a media and measurement protocol committee, it’s a good idea. But, the fact that what matters is that every stake holder in this room, every developer and every buyer has a stake in interactive television measurement. You see what we are doing, which is a bit concerning is we are also in love with what the technology can do, but we are not thinking a bit about how we measure and rate the technology. One warning, if there’s one thing we’ve learned from the internet, we should take it to interactive television. That warning: if you can’t measure it, you can’t manage it. So this research sessions and the research work that will be going on here today and forums and sessions that will happen in the future, we need to do it. I would turn to each of you developers and say do you have a media research alliance? Are you thinking about the data that you think should come out of your box, your technology or your program? You need to think about it. Do you have an agency person as a consultant or as a partner? Think about it because the research protocols are critical.

 

Fourth, I know I am sounding like a broken record on this fourth issue, because I’ve talked about it before, but it’s so critical. We must, we must get more creative people in the creative side of the advertising agency business, involved in the dialog, particularly the television production departments of major advertising agencies. We need to create excitement about interactive television. How many of you know what it’s like in an advertising agency creative department today? How many of you have gone and visited a creative department? How many of you out there have ever run an advertising agency creative department? Do you know what it’s like? Do you know what it’s like to be 26 years old and just coming out of the VCU ad center? You’ve got a lot of piercing, maybe an odd hairdo, you don’t particularly like wearing long pants to work, and you want to be Steven Spielberg.

 

You want to make little mini movies called commercials. You want to shoot 19,000 feet of film to do it, and if your life is really good, you want to spend two weeks at Shutters in Los Angeles, cutting the film. You know, that right now, is the standard of excellence, in television. I was talking to a major automotive client who’s prepared to pay an enormous amount of money into interactive television, into multi-platform interactivity. You know what he said to me? He said, David, I don’t know how to get the creative departments of my agencies excited about it. This is a major automotive advertiser. And I turned to him and I said, well don’t they work for you? And he said, well they are just not that interested in it. And you know we need to answer a simple question ladies and gentlemen; do you know the answer to this question? I get asked this all the time. What does an ad look like in interactive television? What do they look like David?  We need to begin to answer that question. We’ve got to get the creative departments of advertising agencies, involved in this dialog.

 

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Fifth,we need to answer the question how do we get clients excited about interactive television? There’s a very simple answer I believe, and I said it to the Magazine Publishers Association (MPA). The Magazine Publishers Association needs to stop doing trade advertising, and send every one of the top 100 clients of America a TiVo or replay machine. If we could get a TiVo or replay machine into the hands of the top 100 clients in America, we would begin to create the revolution. Because all you have to do is to have a TiVo or a replay for a month, and you begin to see the potential of the technology. You also begin to see some of the potential threats of the technology. But my recommendation to us as an industry is we need to get the technology into the hands of the top 100 clients of America. Carat is prepared to donate money to do that. We are doing it for our own clients. It’s important to get clients using the technology, because if you own one for a short period of time, you begin to see how television is going to change. We need to get the top decision makers to use the technology: replay or TiVo are the vanguards of the revolution. One other thing interests us as a sideline on research and technology, when we have started a replay machine in our house, it’s very interesting, I don’t know how many of you have replay or TiVo technology available to you, I would presume most of you do, I don’t know. It’s interesting you know, that I read the manual to figure it out. What I find fascinating is, you know, I have a 10 year old and an 8 year old son. I left the remote control on a chair, a week later, they were working with it. Never read the manual. Now, it’s interesting to me about how the technology, particularly with young people, they push the buttons without ever looking at the manual: fascinating the way this technology and adoption cycle will take place. 

 

Finally, the sixth ideaand the final idea for pragmatic ways to move the business forward is that we must form learning alliances, cooperate, work together but most of all to share some learning: this has not been the history of our industry. Agencies are very competitive with other agencies. When we learn things we prefer not to share it. And you know what happened? We have ended up with an industry that has spent millions of dollars on research, and very little collective increased knowledge. It’s a tragedy.

 

Look at the magazine business, I mean, we have been talking for 40 years about what the difference is between a spread and a page, the value of a spread or a page. But whether an ad should be on the right hand or the left hand side of a page, which is more effective. Or for that matter whether an ad should be at the front of the magazine or not. Every insertion order for magazines in America comes with the same request, far forward, right hand page. They have been that way for 50 years. And because our industry has never worked together, we have never answered a simple and fundamental question, and it haunts the magazine industry today. So what I am suggesting is that although we live in a competitive industry, and we are all focused on developing proprietary advantages, I fear that too quickly we will all spread off to our own encampments, as we have done before and not share knowledge and information. We are suspicious of working together. We are suspicious of sharing what we have learned. And what we end up with is an industry that spends millions of dollars with no increased knowledge.

 

Carat would like to partner with all of you. Come to us with your ideas, and I know what we particularly would be interested to do is, we would like to partner with a competitor. Let’s work together to learn more about this industry. Let’s share the knowledge with the industry. So, we will make that commitment today. If you are interested in a learning alliance, come to Carat. We are going to try to get a consortium of clients together, to test and learn. And we would love to work with a competitor and we promise open architecture. We will try to bring our learning out to the industry, for the better of the industry, for once and we will try to start the trend. (Under Mitch Oscar, Carat has created the carat Exchange, fulfilling Verklin's promise.) And I would ask you and your organizations to join us and try to do it together, because Carat will join you.

 

Oh well, that was 13 minutes, and I’ve preached too long, but you noticed how Jack set this thing up, 15 minute increments, it’s like clockwork. So I am saying, thanks for listening, please think about those six pragmatic areas to help move this nascent industry forward. I thank you so much for listening, but most of all, where were you during the revolution, where were you during the midst of sea change, for those of you that are here, you were right in the middle. Thank you very, very much!"

 

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media eadership pinion ision volution

 

media eadership pinion ision volution

 

media eadership pinion ision volution