:00:00. > :00:10.I'm Michelle Fleury here on Madison Avenue,
:00:11. > :00:12.the street Madison Avenue, the street synonymous
:00:13. > :00:15.with the Golden age of advertising and once home to its titans.
:00:16. > :00:18.In the digital world, will the industries' best days over?
:00:19. > :00:43.That's what we'll be discussing on this week's Talking Business.
:00:44. > :00:49.Today, we are looking at advertising in the digital age and where
:00:50. > :00:53.the dollars to get your dollars are getting spent.
:00:54. > :00:56.Here is one graph that lays it all out.
:00:57. > :00:59.The advertising market is seeing a shift from TV to digital.
:01:00. > :01:04.As you can see from this forecast, spending on TV ads
:01:05. > :01:08.in the United States is expected to continue to grow over
:01:09. > :01:13.Now, look at the trajectory of digital ad spending.
:01:14. > :01:16.In the past 12 months, it's jumped 15%, and from 2017,
:01:17. > :01:21.it's predicted to outpace spending on traditional TV ads.
:01:22. > :01:30.The TV series that immortalised the heyday of television
:01:31. > :01:37.To answer that we with me are Brent Smart, the Chief Executive
:01:38. > :01:46.of Saatchi Saatchi, the advertising agency in New York,
:01:47. > :01:50.Torrence Boon from global, you are VP For global agency sales
:01:51. > :01:53.and services in Google and you are responsible for driving
:01:54. > :01:56.Google's worldwide strategy with marketing and with advertising
:01:57. > :02:02.agencies, so I don't know if you have met Brent before.
:02:03. > :02:05.Finally, Sebastien Tomich from the New York Times.
:02:06. > :02:08.You are senior VP of advertising and innovation and you lead the tea
:02:09. > :02:11.brand studio, which is the New York Times in-house creative agency.
:02:12. > :02:14.Now, Brent, or really this is a question for all of you,
:02:15. > :02:16.but if I could start with you Brent, what does advertising
:02:17. > :02:20.Well, it's almost unrecognisable in some ways from when I started
:02:21. > :02:26.I think we spent so much time talking about what's different.
:02:27. > :02:29.Technology, data, social media, all these things are different,
:02:30. > :02:32.but there are some things that are absolutely the same
:02:33. > :02:39.Since we used to sit around fires, human beings have always been drawn
:02:40. > :02:42.to stories, the brain craves stories and I think great advertising's
:02:43. > :02:44.always been about great story-telling and still is.
:02:45. > :02:48.There are so many new ways we can tell the stories and so many ways
:02:49. > :02:52.we can let people into the stories and be part of them.
:02:53. > :02:59.That's what is exciting about being in advertising today.
:03:00. > :03:02.You Torrence represent the new world in a way,
:03:03. > :03:10.For us, we think of the current situation as, in many ways,
:03:11. > :03:15.the second renaissance in advertising, and for us,
:03:16. > :03:18.the fact that you have an explosion of ad formats, you have massive
:03:19. > :03:23.fragmentation of media channels, you have data which is incredibly
:03:24. > :03:27.important in terms of being able to target consumers in a really
:03:28. > :03:31.customised way, these are all pretty significant and seismic shifts.
:03:32. > :03:33.The other interesting point is that today,
:03:34. > :03:37.consumers can actually choose and are choosing
:03:38. > :03:42.What do you think advertising looks like today?
:03:43. > :03:46.I think that digital, which is really interesting,
:03:47. > :03:48.is the first medium that doesn't have a defined format.
:03:49. > :03:51.You think about outdoor advertising, you think bill boards,
:03:52. > :03:54.broadcasts, 30-second spots, 60-second spots and print,
:03:55. > :03:59.Digital advertising can come in all shapes and sizes and,
:04:00. > :04:03.comparing that to what I do, five years ago if I would have told
:04:04. > :04:06.you the New York Times would have a creative agency
:04:07. > :04:10.within its own walls, it would be helping advertisers tell
:04:11. > :04:12.stories as advertising, you would say I was crazy.
:04:13. > :04:16.So not only has the business shifted completely now, but I think even
:04:17. > :04:18.five or ten years from now, it's going to look
:04:19. > :04:24.One of the things we are doing a lot of is experimentation around
:04:25. > :04:27.what actually works and drives the impact that brands
:04:28. > :04:34.We had a great campaign in process that we ran with a company
:04:35. > :04:43.to basically figure out what length of ad and what format would perform
:04:44. > :04:47.best on mobile and it was really surprising results.
:04:48. > :04:50.The longer form execution was what actually performed better.
:04:51. > :04:53.But have people really changed that much?
:04:54. > :04:57.It sounds like you're saying they want to watch adverts and I'm
:04:58. > :05:03.I think people don't care about advertising and brands
:05:04. > :05:12.and I think marketers are kidding themselves if they do.
:05:13. > :05:15.Quality is the key, there is so much content out there.
:05:16. > :05:18.The thing we hear from every consumer is, we've got no time,
:05:19. > :05:20.and yet there's never been so much content.
:05:21. > :05:23.In a world where there is so much content, so little time,
:05:24. > :05:26.only the great stuff gets watched and shared,
:05:27. > :05:28.only the great stuff gets talked about.
:05:29. > :05:30.That is the challenge because we don't need more content.
:05:31. > :05:36.But the great stuff will always find an audience, always.
:05:37. > :05:40.The age of smartphones has left us all with such short attention spans,
:05:41. > :05:42.even a goldfish can hold a thought for longer,
:05:43. > :05:45.so how do you come up with an ad, given all of our short attention
:05:46. > :05:50.That is an important point because quality today I think
:05:51. > :05:55.is as much about relevance and responsiveness as it is around,
:05:56. > :05:59.you know, quality of content or B-matic type of things
:06:00. > :06:05.you would pursue in order to tell a story and we have this notion
:06:06. > :06:11.Mobile devices have totally transformed the way we interface
:06:12. > :06:14.with brands and advertising and so ads that actually deliver
:06:15. > :06:18.utility in the moment when you're on the street looking for retail
:06:19. > :06:23.establishments nearby when you're in the actual retail establishment
:06:24. > :06:26.actually looking and researching for information on a specific
:06:27. > :06:29.product, brands that are there and that are responsive
:06:30. > :06:31.I think are the ones that are breaking through.
:06:32. > :06:35.I think where advertising has unrivalled power is,
:06:36. > :06:40.what about the person that doesn't know what they want who,
:06:41. > :06:42.six months from now, are going to buy that product
:06:43. > :06:47.I think maybe we can sort of just embed a feeling,
:06:48. > :06:51.embed a meaning, move them in some way that suddenly in six months'
:06:52. > :06:54.time they are in the customer gene to buy that product,
:06:55. > :06:57.they are more likely to buy it and I still think advertising
:06:58. > :07:01.is the killer app for that, nothing else works in that way.
:07:02. > :07:07.If your product is great and people are talking about it,
:07:08. > :07:12.It tags back to your previous question about mobile.
:07:13. > :07:15.It's essentially enabled anyone to be your advocate,
:07:16. > :07:20.so you two, Facebook, Twitter, Linked-in, that's on your phone.
:07:21. > :07:35.The minute they have The chance to become your own ad agency.
:07:36. > :07:38.The minute they have an interaction, they have the chance
:07:39. > :07:44.There are also the new ad formats, so we have the ad format on YouTube
:07:45. > :07:48.that allows you to skip if the ad isn't compelling so,
:07:49. > :07:50.to your point, making sure that you grab that consumer,
:07:51. > :07:53.that you have the right headline and entry point is critical
:07:54. > :07:55.and because people can actually skip ads now,
:07:56. > :07:58.brands are coming to us because we are an efficiency
:07:59. > :08:00.perspective, it makes a lot of sense.
:08:01. > :08:02.If people are choosing to watch that ad through its entirety,
:08:03. > :08:05.that means they are engaged with the brand and ready
:08:06. > :08:09.You are hitting on something that I think is kind of interesting that,
:08:10. > :08:12.you know, companies like Google have said, we are no longer
:08:13. > :08:16.an interruption model of advertising, it's an engagement,
:08:17. > :08:22.yet you spend a lot of time interrupting my YouTube videos.
:08:23. > :08:27.Again, if you look at the mix, we see much more
:08:28. > :08:33.of a shift toward opt-in, True view ad format.
:08:34. > :08:36.of a shift toward opt-in, TrueView ad format.
:08:37. > :08:39.So I think the days of forced preroles are numbered.
:08:40. > :08:41.What is YouTube, which is associated necessarily with brands tradition,
:08:42. > :08:49.I think there's massive innovation on the YouTube platform and the way
:08:50. > :08:52.we think about it is the asset base represented by our content creators,
:08:53. > :08:55.so you have these incredibly creative people who have loyal fan
:08:56. > :08:59.bases, who have an incredibly engaged audience and,
:09:00. > :09:06.what we see brands doing and their agencies Are critical
:09:07. > :09:12.what we see brands doing and their agencies are critical
:09:13. > :09:14.partners in this, is leveraging that fandom against the content creators
:09:15. > :09:17.to make really meaningful connections with brands.
:09:18. > :09:27.In my house I have three young boys and the guys they are acting with on
:09:28. > :09:31.YouTube are way more famous than Nickleodeon. I don't know who the
:09:32. > :09:35.people are, you know, it's the YouTube stars who they spend time
:09:36. > :09:39.with and mimic in terms of the way they talk. They're the stars in my
:09:40. > :09:44.house for my kids. So the whole notion of celebrity has changed and
:09:45. > :09:47.it's very much grass roots bottom up celebrity now which is really
:09:48. > :09:51.interesting and we didn't have that 20-30 years ago, you know. The
:09:52. > :09:55.obituary for the advertising agency's been written many times,
:09:56. > :09:58.but I think what's interesting, you mentioned the YouTube content
:09:59. > :10:03.creators, they put their viewers first. You at the Times put your
:10:04. > :10:05.readers first. They put Facebook users first at Facebook. Advertising
:10:06. > :10:09.agencies, we put the brand first agencies, we put the brand first
:10:10. > :10:14.always, we do what is right for the brand. Coming up later in the
:10:15. > :10:20.programme, we'll delve deeper into the ad agency's changing business
:10:21. > :10:25.model, but first, comedy consultant Colmer Regan speaks to a famous
:10:26. > :10:30.brand about viral ads back in the day. Hello. Since this week we are
:10:31. > :10:33.talking about advertising, I have a short period of time to grab your
:10:34. > :10:42.attention. That's why I'm standing in front of a fish cycling a bike.
:10:43. > :10:48.I'm at the Guinness Museum in Dublin. If there's one brand of
:10:49. > :10:51.advertising that has evolved over the years but still imagined to
:10:52. > :10:56.capture the public imagination, it's Guinness. This is called fish on a
:10:57. > :11:01.bicycle, part of an advertising campaign that ran over 20 years ago.
:11:02. > :11:05.The premise of the ad was that a woman needs a man like a fish needs
:11:06. > :11:09.a bicycle. Now what has that got to do with creamy pints of Guinness?
:11:10. > :11:12.Nothing of course but it got us talking. The day after the ad,
:11:13. > :11:16.people would say, did you see the ad with the fish on the bicycle. What
:11:17. > :11:20.was it for? Oh I think it was for Guinness. Advertiser's job done.
:11:21. > :11:25.That was the thing about Guinness ads, they were viral before anyone
:11:26. > :11:28.knew what viral was. At Guinness we have an ethos of trying to do things
:11:29. > :11:32.differently from the way other people do them. Now with digital,
:11:33. > :11:35.again, some of the principles are the same but we have to be able to
:11:36. > :11:40.sell interesting stories and stories that will make people sit up and pay
:11:41. > :11:46.attention. But we have so many more different formats to do it. That
:11:47. > :11:51.story now appears in your Facebook news feed, maybe when you are
:11:52. > :11:57.searching for beer or rugby on Google our story will pop up.
:11:58. > :12:01.Of course time waits for no ad man, so how does a global brand like
:12:02. > :12:05.Guinness make smarty pants ads that grab the attention in the modern
:12:06. > :12:10.digital advertising era? That moment when you click on a film in you able
:12:11. > :12:13.to, an ad comes up and you have five seconds to decide whether you want
:12:14. > :12:20.to watch the rest of that ad or click to go through to the film that
:12:21. > :12:23.you were choosing. That means we've got to make a Guinness film that in
:12:24. > :12:26.that first five seconds gives you enough interest and excitement that
:12:27. > :12:31.you are going to watch the whole thing. But what about the future of
:12:32. > :12:35.digital advertising? Is it going to become more and more targeted Will
:12:36. > :12:39.we will able to walk down the street with the ads popping up in our
:12:40. > :12:46.faces? How are way going to block those? Much more valuable and
:12:47. > :12:51.satisfying future is where you are walking down the street and the
:12:52. > :12:57.available ads are targeted only at the current intent that you have. So
:12:58. > :13:01.rather than seeing a lot of different ads and being intruded
:13:02. > :13:05.upon, you see a few ads that reflect your current intent. The knowledge
:13:06. > :13:09.of your intent gleaned from an analysis of say your online activity
:13:10. > :13:15.is one very strong source of that. Every time we use our smartphone, we
:13:16. > :13:18.express our current intent, so if those signals can be harnessed in
:13:19. > :13:23.such a way that advertisers can target their ads at people whose
:13:24. > :13:28.intents aligned with their products, the future is now. Whatever the
:13:29. > :13:32.future, advertising needs to be transparent about its intentions and
:13:33. > :13:34.definitely not full of subliminal messages. I'm determined not to let
:13:35. > :13:51.that happen in my report. Colmer Regan there. Remember, you
:13:52. > :13:59.can see more of the short films on our website. Now Brent, if I can ask
:14:00. > :14:05.you, how much has the traditional advertising model changed in today's
:14:06. > :14:11.digital world? Oh, hugely. I mean, if you go back to the heyday of
:14:12. > :14:15.advertising agencies, we used to make one television ad that would
:14:16. > :14:20.air all year and the media commission would run that ad. It was
:14:21. > :14:23.incredibly profitable. Now, we need to make incredibly complicated
:14:24. > :14:26.programmes for Kleins. We have talked about the many different
:14:27. > :14:29.formats with which we can now advertise, so the idea of making one
:14:30. > :14:33.thing, blahhing to many and trying to get back the media commission is
:14:34. > :14:37.gone, so now we have to find a way of making more content because we
:14:38. > :14:45.have incredibly content-hungry consumers and clients. You also face
:14:46. > :14:50.a lot more competitors, you are sitting next to two? Or you could
:14:51. > :14:55.say collaborators. It's how you look at it. We compete in some ways, but
:14:56. > :14:59.I've seen incredible things happen when we collaborate because these
:15:00. > :15:06.guys can bring something to one of my ideas that I just can't do
:15:07. > :15:10.myself. We have got a bit more of an open model where we are happy to
:15:11. > :15:14.collaborate and we all bring something different to the idea. You
:15:15. > :15:18.are Google's point person between Google and advertising so you are
:15:19. > :15:22.going to talk up collaboration. But is it really like that? Surely you
:15:23. > :15:28.are trying to grab your slice of the pie? Well, we believe the best way
:15:29. > :15:33.of grabbing our slice of the pie is collaborating to convince brands
:15:34. > :15:38.that digital at the centre of these campaigns that they are creating
:15:39. > :15:42.with their advertising agencies is a smart strategy. If you think about
:15:43. > :15:46.platforms like the Android platform or YouTube, which we talk a lot
:15:47. > :15:51.about, but also new technology like cardboard an the things that we are
:15:52. > :15:55.doing with 360 video, these are really complicated products. So
:15:56. > :16:00.having expertise that we can bring to the table so that agencies'
:16:01. > :16:04.brands can understand the possibilities associated with the
:16:05. > :16:10.products, it's a win-win. The Super Bowl is coming up, it's a massive
:16:11. > :16:14.sporting event, also a huge event in the advertising world, traditionally
:16:15. > :16:18.for TV ads, what opportunities or how significant is it for Google and
:16:19. > :16:24.platforms like yours? Incredibly important. So we have a programme
:16:25. > :16:29.called ad blitz which is actually a platform that we use, it's a voting
:16:30. > :16:34.platform that enables viewers of the Super Bowl ads to actually vote on
:16:35. > :16:38.their favourite ad and then that has all sorts of implications in terms
:16:39. > :16:43.of promotion across the platform to make sure that they get the biggest
:16:44. > :16:47.bang for that investment. It's like the water cooler on steroids because
:16:48. > :16:51.everyone's watching the game and the ads and talking about the ads and if
:16:52. > :16:55.you do something great in that forum, it lights up every other
:16:56. > :16:58.channel, mobile, Twitter, Facebook, you know, it becomes this incredible
:16:59. > :17:02.thing for brands where it's not just a spot, but it's a really powerful
:17:03. > :17:08.sort of entire marketing programme from one spot. We started at the
:17:09. > :17:14.beginning of the show talking about the era of mad men, is today the era
:17:15. > :17:20.of thor? ? Era of the geek. Geeks are cooler than nerd. No, I think
:17:21. > :17:25.it's interesting within you think of mad men, you think of Don Draper and
:17:26. > :17:32.wining and dining clients after the country club. Martini lunches?
:17:33. > :17:34.Martini lunches. No matter what transition we do through,
:17:35. > :17:38.advertising is a relationship business and that's never going to
:17:39. > :17:42.go away. Even if there are two machines buying advertising from
:17:43. > :17:46.each other, there are people behind it creating relationships. The
:17:47. > :17:50.marketers that we work with, they don't need anybody else to take them
:17:51. > :17:53.to a state lunch, you know. They don't need me to take them to the
:17:54. > :17:56.Super Bowl, they want to hear about great ideas, sit across the table
:17:57. > :18:00.from someone who understands their business who can talk about new
:18:01. > :18:04.technology and come up with creative ideas on the fly, so I think that
:18:05. > :18:08.that really marks the shift. We are going through a bit of a talent
:18:09. > :18:15.renaissance. We had a recent experience where a client brought in
:18:16. > :18:18.Google and Facebook during the exercise, so brain stormving
:18:19. > :18:23.storming, coming up with an idea and I was thinking, what better creative
:18:24. > :18:26.strategy than the troves of data that Facebook and Google have, they
:18:27. > :18:31.know everything about everyone. The one thing that came to mind though
:18:32. > :18:35.was, we had a power share, a technology company and the client.
:18:36. > :18:39.There wasn't an agency in the room. Right there, I was thinking, like,
:18:40. > :18:44.where is the future of advertising heading? No-one in this industry has
:18:45. > :18:48.a distribution monopoly any more. Like Google and Facebook have the
:18:49. > :18:51.closest thing to it but really no-one owns that, so the only thing
:18:52. > :18:56.that separates us, and I mean this for the value of the crative
:18:57. > :19:01.industry is a great idea -- creative. The idea of technology,
:19:02. > :19:05.when I go on a website nowadays you pretty much always see a sign that
:19:06. > :19:09.says cookies used on this website. At some point, as we have seen with
:19:10. > :19:13.ad blocking, technology comes along to maybe remove that. What replaces
:19:14. > :19:20.that because it's been very valuable to other firms in terms of gathering
:19:21. > :19:25.data on people's habits? I don't think we are at a point where we can
:19:26. > :19:30.necessarily say it will be replaced. Even though ad blocking is a
:19:31. > :19:35.phenomenon, we are not seeing it have mammoth implications for our
:19:36. > :19:39.business, but it has raised the point that you're making which is,
:19:40. > :19:44.and I think we've all been saying in our discussion, is how do you get to
:19:45. > :19:49.a standard of quality such that people don't feel like they want to
:19:50. > :19:54.filter advertising or they don't feel like it's advertising at all,
:19:55. > :20:00.they feel like it's content. Can that point ever be achieved? Yes,
:20:01. > :20:03.absolutely. I don't. People still have to advertise, let's be clear.
:20:04. > :20:07.Not all advertising will be story-telling in the future. We are
:20:08. > :20:13.going to get to a point with everything is good. There are always
:20:14. > :20:17.going to be a bunch of media average stuff that wastes my time. You can
:20:18. > :20:22.opt in, you are not forced to watch it. The human brain has an
:20:23. > :20:26.incredible ability to filter out the thousands of mess annals we keep
:20:27. > :20:34.throwing at it every single day. How do you make sure the consumers
:20:35. > :20:39.seeing it are not, or that brands are able to reach the
:20:40. > :20:43.the actual people that they want to reach? Again, that is a technology
:20:44. > :20:51.problem and it's a big one, but I think we have a leadership position
:20:52. > :20:53.in making sure that the ads that we serve are actually reaching the
:20:54. > :21:03.people that brands want them to reach.
:21:04. > :21:06.best idea wins. Data can be an enhancement of a great idea. I
:21:07. > :21:12.believe, at least in our team, we make big decisions based on our gut
:21:13. > :21:23.and small decisions based on data. centrality of the idea will always
:21:24. > :21:24.rule the day in terms of that interface with the consumers. I do
:21:25. > :21:34.think that out of time so I have one more
:21:35. > :21:43.question for each of you - are we in a post-advertising world? I'm out of
:21:44. > :21:48.a job if we are so no! Torrence? I think it's how you define
:21:49. > :21:50.advertising. I think what we've all agreed on is, it's more about
:21:51. > :21:56.content, more engagement experiences and utility.
:21:57. > :22:04.The definition of advertising is changing dramatically. No.
:22:05. > :22:11.Definitely not. I think that at least mostly in my world, people can
:22:12. > :22:19.confuse dissatisfaction with advertising in general. I think to
:22:20. > :22:24.old models of broadcast, I think about the vogue September issue and
:22:25. > :22:27.bill boards, even Google and Facebook actually, there are a lot
:22:28. > :22:31.of ad models where if I had the choice of ads or no ads, I would
:22:32. > :22:34.choose it, it's a necessary part of culture. We are going to have to
:22:35. > :22:42.leave it there. Thanks to all our guests. If I could start with you,
:22:43. > :22:47.Sebastien, Torrence and Brent, thank you. Next week on Talking Business,
:22:48. > :22:48.we'll be in