Q&A: Scott Berg by Chris Trayhorn, Publisher of mThink Blue Book, April 6, 2009 Scott Berg is responsible for working with HP’s business units to establish a congruent global media strategy as it relates to traditional, emerging media and technology. He has been honored as the first U.S.-based client media judge at the Cannes International Advertising Festival in 2004, and was named one of Advertising Age’s Media Mavens in 2005 and was on min Magazine’s Sweet 16 list in 2007. PERFORM: To what do you attribute the new focus on media by advertising clients? BERG: There are a number of different things, but I would highlight a few. The first is budget. Certainly, media tends to be the largest area within an advertiser’s overall budget. There’s a significant focus by executive management on the return on investment that the media budget provides. So you’ve got a consistent pressure point for companies to continue to make their media more efficient and more interesting, and to try to drive more value for end customers. Second is content digitization. All types of content are becoming digitized, including video, audio, etc. So most people are starting to change the way they consume the media itself, and the Internet, and all the digital opportunities you have there, have expanded the number of media outlets that you can attack. This has also given the consumer total control. They become their own disk jockey when they own an iPod. They become their own television programmer when they own a TiVo or DVR device. They get to choose what shows to watch, what music to listen to, when they want to listen to it and the order in which they listen to it, etc. Tying right into that is this shift to interactive, and I would narrow that even more to broadband. We have seen consistently, when customers move to a broadband connection, they’re able to consume much larger files and much more expressive types of content, and they can get it immediately. You tend to see substantial increases in Internet consumption overall. Of course, everybody is still focused on the metrics portion of the business: How does media perform, is it performing selectively, is it not performing, and, if it isn’t, why not and where should we move our media investments? So customers are moving into different forms of content, and their media consumption habits have dramatically changed over the past few years. PERFORM: As you’ve described, there are a lot of new media channels available. How is that changing what advertisers expect to achieve? Have their objectives changed, or are they evolving? BERG: It’s always evolving. I would say most advertisers today desire, first, integration – being able to integrate the content and the messaging between different media types. Second, media needs to be scalable. It’s no longer efficient – or even possible – to advertise and create content for one particular niche publication. It is now becoming much more cost-effective to go after the long tail. This is happening as we speak, but you’ve got to have some scale. Third, it’s got to be optimized to show results. It needs to be completely efficient, meaning it doesn’t cost you a ton of money to get into it and, the efficiency also considers how much human capital time it takes to manage the project itself. Fourth, media today has got to have a metric around it. Fifth, it needs to be easy and simple and elegant so an advertiser can get to market quickly. PERFORM: Easy to create or easy for your targets to consume, or both? BERG: I think it’s both. For us, we want something that’s really easy to develop and easy to execute in the marketplace. For the customer, it’s about making sure that the piece of information or content is easy to access and easy to consume. The other big focus is on automation. Digital advertising typically takes much more human capital time to work on, get it completed and get it executed. Human capital at most companies has not increased enough to be able to manage the increase in workload, so it’s critical to get more of the tactical functions automated. It is a serious goal that companies like us are looking at from a buying perspective, meaning how we buy and sell media and advertising. If it can be done in an electronic format to reduce the time and expense, that’s all the better. PERFORM: Can partnerships help achieve all those things? BERG: Yes, you need to have partnerships to make any and all of this happen. However, most companies can’t partner with everyone, because they just don’t have the resources or the time. So you look for those types of partners that can provide a very unique opportunity no one else in the market can. And you tend to focus more of your attention on the bigger players or the niche players that are really focused in on something specific. It’s a significant challenge right now in the media landscape, especially for magazines and print companies, because you tend to have an almost commoditized type of a market, and that raises some challenges. However, if they’ve established and grown their interactive side, there’s still huge opportunity for them to provide significant value. PERFORM: An IBM online survey of consumer digital media and entertainment habits found that consumers are now spending as much personal time with the Internet as they do watching television. What media types do you see winning and losing the fight for media dollars? BERG: I don’t necessarily agree with the IBM press release. The information I’ve seen shows that the consumption of television content has actually increased. I think more people spend more time watching television; they just spend less time watching commercials. PERFORM: Or they’re not watching it on a television set. BERG: Yes, you have the two takes here. The commercial content is available, but with DVR technology and TiVos, most people fast-forward through it to get back to their programming. The same thing with the Web and more content moving online. You have companies such as Joost following a very interesting model of providing content in a television format via the Internet. What are the differences and changes with that? Well, I can watch television or content anywhere around the world just by logging in to Joost.com. I’m not tied to my own television. You also have products such as Slingbox, which allows you to connect back to your television via a broadband line on your computer and be able to access your own television or DVR and watch TV from across the world. So the way we consume media is different. In some respects, I think television has actually stabilized and is doing fairly well. The print publications, especially monthlies – what I would call mass consumer publications – are still struggling a bit. I think they’ve plateaued somewhat, but print is taking the brunt of the pain. Another media channel that has been hit hard is radio, because that content can be easily distributed via the Internet. You also have changes going on in that marketplace with satellite radio. Overall, the listening audience has gone down significantly. So radio has taken a big hit, and I’m seeing outdoor [advertising], such as traditional things like billboards, begin to take some body blows as well. Digital content, of course, is doing extremely well, and I would say using the Internet as a platform device is key. Traditional search is going to continue to do well for a few more years, because you’ve got many more companies trying to enter that marketplace, including a lot of smaller players. But I see that plateauing in a few years. The area that has some of the most potential is mobile, specifically mobile search. It is basically a whiteboard type of an environment right now that has yet to be built. I think mobile has a lot of opportunity, and the handheld device itself – as a connective device back to other types of content – will also be very, very interesting as it starts to move forward. PERFORM: What do you see as the downsides of this shift in media focus, and what do you think needs to happen to solve those issues? BERG: The downsides, frankly, are significant. Most people think it’s been a joy ride for advertisers, but it actually has not. Anybody who tells you it’s been easy probably has got something to hide. This is a very challenging shift, and the first obstacle is resource management. As I mentioned earlier, it takes much longer to do some of these new media things than it took with traditional media types. The impact is much larger, naturally, but the time it takes to get there is significant. PERFORM: Plus, there’s a learning curve. BERG: Right, and that’s the other thing: education. You have a lot of people on the traditional side of media who have learned about interactive and understand interactive now and they have a pretty good handle on it. The challenge I see is the people who have only grown up in the digital age and are now entering the work force, and they’ve never dealt with traditional media before. PERFORM: That seems the opposite of what you usually hear as the problem. BERG: Exactly. My concern is that, if you take a look at media budgets, and HP is a good example, we spend about a third of our media budget on digital, which would include interactive and so on. But still we have two-thirds of our budgets in traditional media types. Having people understand digital is absolutely critical, but they’ve also got to understand how you implement it and tie it into traditional media as well. There is a place for everyone. It’s just that the pieces of pie have gotten smaller. Talent acquisition is extremely tough right now. Digital talent and search talent is very difficult to find, because it’s a completely different skill set. These are people that in many cases haven’t received a formal education in marketing. They’re engineers and mathematicians and computer scientists that we’re hiring into marketing. And sometimes you don’t necessarily want a marketing person; you want somebody who’s very technically oriented. There aren’t enough of those people coming out of higher education today. Another challenge is the various metrics among the different media types. You have all these new media types coming on board, and they each have their own set of metrics which sometimes are not congruent with other media types – whether traditional or digital. So it can be a real struggle to understand the value of each media type. That leads to the final downside of the media shift. If you have independent metrics, you can understand each one on its own, and you can understand whether it worked or didn’t. But it’s difficult to determine the interplay between one media type and another. How does television influence interactive? How does interactive influence a newspaper? How does point of sale influence mobile? How do all those things work together? The models that have been created are all being challenged now because you have different media types coming out at such an accelerated rate. One more challenge is international talent integration. For most of the marketing done today, if you’re a major advertiser in the market, you really have to think of it as an international audience. People look at HP.com; they don’t necessarily look at HP.com/Europe or something like that. You really have to understand the differences on the international market, and that’s an area where we also need more talent. Filed under: White Papers Tagged under: Interviews, Perform, Scott Berg About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.