click here to go to the IAA home page.
click here to go to the IAA home page.

Setting the stage

Convergence, media and marketing:
an eye for an I

by Paul Woolmington, Young & Rubicam

It’s a strange trick of the mind. When you buy a new car, suddenly it seems everyone has the same mark. Or when you’re in a cast because of a broken arm, it seems the world simultaneously became clumsy and is wearing plaster.

Of course the cars and the casts were always there, it’s just that now you notice. Which is exactly how I feel about another creature: convergence.

IF YOU LET CONVERGENCE into the front of your mind, its presence is suddenly everywhere. In the magazines you read. The television programs you watch. The people you talk to. Everyone seems to be talking about it. As it overtakes the senses, the message crystallizes: convergence really will change the way we live our life.

So what exactly do people mean when they say convergence? It started in 1994BW, (before the web). Jim Clarke was working at Silicon Graphics, the firm he started, when he came up with the next big idea. The telecomputer. For the next few years, Silicon Graphics worked to build a black box that would sit on top of your television and make the boob tube function as a personal computer. Companies like Time Warner and AT&T poured millions upon millions of dollars into this project. They re-wired towns like Orlando. Only to have it all washed away by… Jim Clarke when he founded his company Netscape a couple of years later. Netscape offered us a browser–the next next big thing. The company led us to where we are today. Maybe Netscape no longer exists outside of America Online, but its legacy will affect the way we do marketing for decades to come.

Convergence is about having all information–from the Web, from your cable provider, from your phone company–piped into your house. Convergence isn’t a telecomputer. For now, consumers don’t want to use their TV as a word processor. They don’t want to watch movies sitting 12 inches away from their computer monitor. Convergence is about having information available at every point in a consumer’s life. A Palm Pilot should be a Web browser, a beeper and a telephone. A refrigerator should have recipes from Conde Nast’s Epicurious website on a screen. A television should have a web browser installed. And the speed we access this information should be instantaneous.

Convergence is happening. New Palm Pilots are wireless. Soon, Palm will offer a Qualcom phone. Kitchens are being built with Ethernet connections. Cars have desktop computers on the dashboard. AT&T is betting that cable modems will bring most of this information into your house. So two questions arise which are important to us here: when will convergence become mainstream in world markets? And how will marketing change in order to reach consumers in this new world?

One way to understand how fast convergence will enter mainstream life is by looking at Internet acceptance. An unknown medium in 1993, the Web has grown at a mind numbing speed. Today’s Internet economy has been estimated at over $300 billion. That’s about the size of the automotive industry, only the Internet is growing at a much faster rate. Analysts in the marketing business expect U.S. online revenue to grow from under $3 billion this year to close to $25 billion in five years. That’s likely to be a conservative estimate. When new media are accepted by the mainstream, they balloon exponentially. If you look back to 1950, Procter & Gamble spent less than 5 percent of its advertising dollars on a new medium called television. Five years later, they were committing 80 percent of their budgets to TV.

Convergence of media will happen at an equally fast pace, but to get a sense geographically of where it will be a reality first, it’s best to look at Internet penetration. Currently, 54 percent of Internet users live in the United States. Certainly, the U.S. consumer is the most likely to embrace new technology. In Europe, however, it’s Sweden that dominates overall Internet usage with over half of the country’s population having been online. Other European nations with high rates of Internet usage by the overall population include Finland (50 percent) and Denmark (46 percent). Looking at Asia, there are over 5.1 million Internet subscribers in Japan alone, counting for 8 percent of the entire Internet population. The next largest wired populations are Taiwan, then Hong Kong and finally China, with 320,000 subscribers. In Latin America, penetration is fairly even and pronounced, with Brazil leading the way. The region has a world-leading Internet user growth rate and will have an estimated 19.1 million users by 2003. The perceived commonalties shared by the region’s countries–culture, values, history, economics, and language–engender the possibility that the Internet could generate a truly unified regional market.

So what will this mean for marketers? First off, convergence of information means that the consumer is truly king. Twenty years ago, we witnessed a shift in the balance of power away from manufacturers and into the hands of retailers. This shift happened when overproduction became the norm and retailers maintained better connections with consumers. Now retailers have ceded control to the consumer. The Internet is immediate, it’s convenient, it’s affordable and it’s global. And anyone from a 16-year-old to a 60-year-old can harness all those attributes to buy a product, from individualized makeup to financial services.

Marketers are waking up to this new world, but we still aren’t fully taking advantage of it. The smart people among us are changing their approach to how they support their brands in this new world. On a basic level, getting your message to the consumer has become more complicated–a trend that will only continue. There are so many paths to a consumer now: television, real-time events, physical space, sponsorships, the Web, street theater, the telephone, mail, magazines, news articles, editorial features, transportation, food… the list is endless, and it’s all accessible to media professionals.

In today’s world, anybody can be a media owner. You can build a website, write about political scandals, spend less than $1000 a month, and have a larger audience than the cable station MSNBC. Matt Drudge does it on a regular basis. What we have to remember, however, is that consumers are brutal editors–more so because they live in a world with an endless amount of media vehicles saturated with content. They’re not going to waste time visiting a website or reading a magazine that doesn’t provide them with something they need or want. There are too many other choices.

Which is why branding is so important. A consumer is only going to turn to a known quantity in a world of oversupply. A strong brand guarantees a consumer’s attention. Nothing else does.

It’s that revelation that is causing the first change in our industry. All employees–from media planners to buyers to researchers–must be totally brand literate. They can’t just understand one esoteric aspect of the media business. To offer the best service to our clients we have to offer 360-degree marketing. The consumer should be surrounded by the brand everywhere it’s appropriate. To that end, everyone on our team has to understand a client’s brand inside and out. That’s one reason we’ve created a new media position called the SuperPlanner. This person fuses brand strategy with media knowledge and instills this thinking in the team players. It’s only in this way that a media company can provide the best strategy for a client. And as convergence truly hits home, when gigaflops of information are always available to a consumer, having consistent brand strategy that employs truly unique and effective media, is the only way to break through the waves of clutter.

Another challenge in our industry is to quantify these new pathways to a consumer. Since the new definition of media is "anything you can put a branded message on," measuring effectiveness is a lot tougher than CPMs. A consistent factor that encompasses everything in our 360-degree marketing plan will be created. It will quantify how a consumer is reacting at every point of contact with the branded message. And the media company that can best present these results to a client will be a winner in the world of convergence.

The good news is that technology already exists for those of us in media to prepare for convergence. The customer more often than not is opting in for a dialogue with a brand, whether in real-time or in any interactive media. Sophisticated databases make it possible to know and analyze every move your consumer makes. We can learn more about individual consumers than ever before. That’s an incredible advantage.

In the world of convergence, developing unique branding campaigns for individual people will happen on a mass scale. Now’s the time for media professionals to invest in the technology and the tools to make it happen.

Paul Woolmington is president of media operations of Young & Rubicam Inc. and of The Media Edge, Y&R’s full service media management company with estimated 1998 media billings of US$9.5 billion. He is also chair of Y&R’s Worldwide Media Council and sits on both the Partnership Board of Young & Rubicam Inc. and the Partnership Operating Committee of the Y&R/WCJ Partnership. Prior to joining Y&R, Woolmington served as worldwide media director at Ammirati Puris Lintas. A British citizen, born in Johannesburg, Mr Woolmington started his career 20 years ago at the agency that handled Rupert Murdoch’s business. He then joined Bozell Worldwide, where he spent 14 years, and at age 25, became the youngest media director of a top 30 agency. Today, he is widely known as a leading media thinker and is credited with creating 20/20 Media Ltd, an independent media agency-joint venture between CIA Group, the United Kingdom’s largest media company.

Welcome l Features l Glossary l Corporate index l Contact us

IAA Home l Copyright © Atalink Ltd April 2000 l Credits