Yep, its that time of year again. AT&T’s Blue Room is streaming the Austin City Limits Music Festival.

All weekend long, The Blue Room will have live streams from the festival, now in its seventh year. First stream is at 12:45pm ET. The Blue Room also has an XM Satellite radio broadcast, a Twitter feed and ringtones available to download from the artists performing at the festival, so they’ve got a true cross platform effort going.

Kudos to AT&T overall for their continued strength in online video events.

Session Description:
When will supply of premium inventory become outstripped by demand? What effects will this have on the online video marketplace? Some advertisers would argue there is a glut of quality, premium inventory online. Some would say there is almost infinite inventory. Who is correct? Can premium video actually command a premium on price? Are video ad networks killing the price and creating a low cost marketplace for video that hurts the chances for growth? These will all be discussed in this session.
Moderator:
Jason Glickman, CEO, Tremor Media
Speakers:
Steven Comfort, YuMe, VP, Advertising Sales
Carrie Kelly, VP Ad Sales, Funny Or Die
Christine Peterson, VP Digital Media Director, Carat
Shoba Purushothaman, CEO, The NewsMarket
Lewis Rothkopf, Network Development, Brightroll

A: Peterson: The question isn’t whether or not it was produced by a professional company, but whether or not there is a technology to alieviate their fears of being associated with pornography or inappropriate language. They don’t really care about the resolution of the video.

Q: If the content were determined to be safe, would that warrant a higher CPM?

Peterson: Sure. If we could have the same reach, then yes. A consumer may be even more passionate about that content.

A: We also need to look at things in the broader context. The super-premium content is usually a byproduct of a broader TV deal, and not really a true measure of CPMs .

Christine: Some of the models for super-premium content is built around purchasing a block, as opposed to the majority of digital content which is purchased on CPM or per stream basis. While that sounds nice, it most cases, they are just repurposing their TV spots. We’re seeing frequency of 7 exposures per session, not just when they come back. We’re looking for 1-2 impressions in an in-stream environment. Overall, those super-premium buys have a negative impact. As someone who tried to catch up on a season of 30 Rock, I hope I never see an ad for super scrubber again.

Glickman: Publishers need to balance the frequency capping with their ability to make money.

Q: From a supply and demand standpoint, there is a lot of noise that all of the video inventory is UGC. When you look at the volume of video inventory on tier-two sites, often times it exceeds what you can find on top-tier sites. What is the roll of video ad networks in a supply demand and value?

A: Brightroll: You can’t possibly overstate the value of video ad networks in this environment. The goal is to supplement what the publisher is doing on their own, and help the agency get the buys across a broader array of quality publishers while avoiding the pitfalls that comes with trying to do that. But you’ve got all of these different player types, formats for them to deal with. As far is the publisher is concerned, you get very competitive CPMs, but not what you’d get if they sold it themselves. But what often happens is “The Spitzer Effect.” You get a huge spike in traffic, and then you have a ton of unsold inventory.

Carrie: As a publisher, there is a need for ad networks. When we did the Paris Hilton video, we had a 16x spike in traffic. But nobody has the chance to pre-sell something like that. What we need to figure out is how to have something in-house that we can use to take advantage of that, and work together to increase the efficiency. We need to open up the dialogue on how the publishers and agencies can work together.

The behind the scenes is that we have to think about the end user. As a start up, we’d rather sacrifice some revenue to make sure that user comes back to us again. We want the right brands because we are building an audience as much as we are building the site.

Q: Are video ad networks hurting the CPMs?

Glickman: I think most of us would disagree with that. For standard ad networks that may be true, but not for video.

Brightroll: The people who run the video networks have been there before, and seen what happens. So we are determined as both former publishers to not go down that road again. We only sell on a CPM basis to make sure that CPMs don’t go down.

YuMe: We give our technology to the publishers we work with, and 99% of the time it is better technology than they already have. And that gives their sales team the ability to sell formats and analytics that they couldn’t deliver on their own.

Q: When it comes to formats, price and inventory, formats obviously play a role. How do we see the formats play into the conversation?

Carrie: On the day I started at Funny or Die, we said that there will be no pre-roll on our site, ever. We have to go back to the user experience. As Christine said, she was so annoyed that she’ll never buy a product. So we need to keep the user in mind and how we protect that experience.

Christine: Just to play devil’s advocate, the advertisers spend an enormous amount of money creating a :30 second spot. Not to say that it is the end all and be all, but they are still working. They still drive a brand message, equal to and above the performance on TV. Users are less annoyed than they are with TV, and we don’t see TV changing their ad model. When I say to an advertiser, “I need you to spend more money for the web,” they say “Forget it,” and spend the money where they know it is working.

Brighroll: One of the things that is really tense right now is the :30. In terms of branding and recall, they are the most effective unit out there. So you have the opportunity to do more than repurpose what you’ve got on TV. If you are targeting techies, they know the benefits of having more RAM, so you can exploit that opportunity to spend the time with them because you can deliver a much more targeted opportunity.

Christine: Coming from a media buying perspective, there’s only so much you can do and say to get them to test the waters in the space. Now we’re seeing interactive video, and we can create ad units for the space. But we need to create more case studies to prove that they work.

Q: How do we feel about formats as they pertain to the content? YouTube said they wouldn’t do pre-roll but would do overlays.

Christine: its less about who created it and more about length.

YuMe: The biggest problem is seeing a :30 second ad before a :15 second piece of content. But it is rare that we get more than one piece of creative. But technically we have the ability to do that.

Q: If you can create content that is an ad, but also something that is content and can stand on its own, is that something we see as the next big thing or is it a fad?

Carrie: It will continue, but it is really difficult. If you, the publisher, are doing everything from the script to the talent to the editing, then we are playing the agency, the producer and the publisher and then we need to go do the distribution as well. It’s a lot easier, like with the Dove campaign, where the agency did it, and seeded it. We can’t try to trick the consumer.

Brightroll: Trailers are a great example. They are entertainment, they are high def. There’s a burgeoning market for literary trailers, where they hire actors to create a commercial. Its entertainment that meets everyone’s need at once.

Q: Content doesn’t exist just on one site anymore. How does syndication, and hyper syndication, affect price?

A: YuMe: When you look at the widget world, where content appears on a blog or on facebook, the issue will become addressability. Can you tell who I am?

Q: Do top-tier sites warrant a higher rate than the same content farther down the tail?

Carrie: yes. If you can buy a targeted audience, if you can buy them in that bullzeye, then you should pay a premium for reaching them in a premium environment.

Brightroll: If you are having your content associated with premium, adjacent content, then you should pay for that association. But advertisers don’t necessarily see it that way.

Why?

Brightroll: One is safety. Advertisers pay to be associated with your brand.

YuMe: Demand and true scarcity will play a huge roll. Auto content, business and finance, travel, that will support higher prices across the board.

Q: With regards to TV, there is a comparison of CPMs. In general, people think that online CPMs are higher than TV. Should they be?

Christine: No. We don’t have the metrics to prove that we should pay higher prices for online. But you can’t compare them. Broadcast buyers buy cost-per-point.

Brightroll: Broadband should always be higher CPMs than TV. You have a lean forward audience. On TV, you have a cost-per-maybe. On the interactive side, someone is actively engaged.

Glickman: We’ve heard that the CPMs on TV have been watered down to address that cost-per-maybe.

Q: Is it an issue of education?

Peterson: Maybe, but what we hear from TV buyers is that they turn on the TV faucet, and the sales come in.

YuMe: When I worked in TV, we knew that we’d get exactly how many number of calls into a call center, exactly what time the spot will air. TV can be extremely precise. But when you are looking at an ad that is in a video player, you are waiting for that content to play, and you are very engaged. With TV, the push has been on to move away from show ratings and towards commercial ratings, and that cracked about two years ago. They are getting close to figuring out who watched the ad vs. who watched the show. But if you are on the Web, you are one click away from engaging with the advertiser. On TV, you have to get up, turn on the computer, etc., You are much farther away from that engagement.

Audience Q: What about convergence when TV and the Web come together?
Brightroll: All of the set top boxes run off of basic IP video. But there is no barrier to getting the same kind of ads and metrics off of the living room TV than off the computer. The technology is there. The convergence has happened. Its just a matter leveraging the data.

Audience Q: What goes into CPM rates, and why are they so much lower for UGC? What are the other inputs?

Christine: There is definite value to the body of content that we can trust. A lot of the established rates for the super premium placements happened because they were bought by broadcast buyers without being negotiated. They were set without any real rationale. There is also a lot of value added research that can help you prove whether or not something worked. With a lot of the premium content, you can do a lot more than with UGC. You can brand the entire environment if you’d like, which has a much longer impact than a UGC environment.

Kudos to Daisy Whitney for pulling together a fantastically random collection of video folks last night for sushi and sake. Imbibing together were reps from For Your Imagination, French Maid TV, Quantcast, Tremor Media, Havas, a record label exec, and Heavy Bag Media. Names withheld to protect the guilty and innocent, but tremendous - and candid - conversation from some very smart people from varying parts of the industry with tremendously interesting points of view on what we’re all up to.

Since 1980, the advisory role of Madison Avenue has declined. The advertising industry in general has failed miserably at responding to the challenges of the digital world. There’s been a decline in advertising as an overall portion of marketing spend.

The digital world has introduced a new set of nomenclature that has confused the landscape. Google has been an innovator, but the industry as a whole has not. The whole industry is looking down the battle of a gun. However, the financial crisis is putting new pressure on our industry. There are a finite number of possible futures or outcomes.

“There is a quiet revolution underway, led by the world’s most rapidly developing economies…The internet is driving that progress.” – CEO, Sun Microsystems.

Web 2.0 is in its early stages. But there are some significant macro-trends happening that will fundamentally change the world we live in. Digital technologies are disrupting the way we communicate. The world is interconnected, interdependent, and needs to be transparent.

More and more companies will look for alternative sources of income. Advertising will play a key role. There is a rise in “Free.” The platform wars are about control of the future of the world economies. Advertising agencies are under resources and under capitalized.

Transparency and consumer control means that “now the deer have guns.”

The consumer controlled world that we’ve created has provided too many choices for all of them to be sustainable. The media environment is constantly moving, constantly in flux. Its like a pinball. The ball is constantly moving around, bouncing off person to person. People are constantly talking, and want and need the brand when they want it, not when we want to talk about it.

Brands need to look at themselves as a service, not a product. One way to do that is through digital media. What you do as a brand is more important that what you say. Brand band business behavior is becoming key. And doing what you say you do is critical. The brands that will win will be the ones who’s consumers tell the best story, not the brands that tell the best story. You need to create communication that people want to spend time with.

We need to get away from campaign based thinking into continuous communication. Outputs need to be outcomes. Controlled communication needs to become organic communication. To accomplish this, we need to re-engineer our agencies. People need to think about how to integrate on a vertical basis, not horizontally. And this terrifies most agencies. But that is the challenge. They need to become much more efficient, and need to invest in the brainpower in our industry. Consider the idea of an “Open Source Agency.”

Session Description:
There are so many ways of creating, distributing and syndicating video online. We see large, mainstream publishers competing with smaller, upstart production companies to create video and some of it is better than others, but all of it is in demand by marketers. Media planners are trying to determine how they should value these different types of video content, how it should be priced, whether the premium content from large publishers is actually more valuable than these smaller production studios. How do we make sense of the landscape and the implications for marketers?

Moderator:
Doug Knopper, co-CEO and Founder, Freewheel
Speakers:
Dick Glover, CEO, Funny Or Die
Jim Nichols, Partner, Strategist, Catalyst:SF
AJ Vernet, President, KTV Digital Media

Q: Last month, according to eMarketer, there were 52 million unique video viewers last month. Where will we be in 12 months?

AJ: More than 100 million.

Q: What kind of content will it take, and what will it take us to get there?

Dick: Doesn’t think its content. Its accessibility, the growth of broadband and new platforms. I don’t think people aren’t watching because there isn’t content people want to watch. You need content to have a successful business, but content isn’t the obstacle.

AJ: Agreed. It is so easy to take a video and upload it to a facebook app.

Q: OK, what about monetizable content.

Jim: There needs to be a generational change. You can’t just count on young people to watch video. But it needs to be packaged in a way that advertisers find appealing. There is a lot of focus on “consumer control” but the consumer can’t be totally in control because they want everything for free. So the question is how to get companies comfortable with advertising on the type of content. But the industry isn’t packaging content in a way that advertisers find appealing. It also needs to be easy to buy. You don’t buy car that comes in 500 pieces.

Dick: Advertisers and marketers need to find more effective ways to engage with these audiences. They need to structurally figure out who is doing it – is it the interactive agency? The brand agency? The PR firm? You end up with a worse product because it has to go through so many hands. It needs to be much more integrated on the client and content side because it is too difficult.

AJ: Publishers need content. Advertisers don’t know how to package branded entertainment for publishers. Advertisers want a product that is completely made for them. But the biggest obstacle is that the person who is buying the media just doesn’t understand it.

Q: Is it because the content is different?

AJ: 10 months ago, they didn’t understand the model. They couldn’t only think in terms of putting their TV commercial online. Now they understand it, but it is hard to price. Branded content can cost $100k, $250k, $500k.

Dick: Every day it gets a little easier. One of the problems, though, is that people “our age” our trying to communicate with people our children’s age. In the 80s, it was really hard to sell cable TV. And still today, the same commercial to the same audience gets fewer dollars on cable than broadcast.

AJ: If the content sucks, it isn’t going to get views. It isn’t going to do its job.

Jim: Ultimately it doesn’t matter if they like the commercial or content. It matters if it moves product. People aren’t going to seek out “toilet peper” videos.

Q: What systems are missing from the equation?

Jim: Right now, there is a Google video widget that lets you search for political content. So you can find every video of candidates talking about political issues. An advertiser can look up by context and insert advertising against keywords. One of the things that you both do is create brand safe content. But that “safety sells” idea is going to need to get much broader. I’m not saying that all content is going to be good for all brands.

Dick: There is a level of hypocracy that drives me crazy. There was a brand that sponsored a movie that was rated R, but wouldn’t advertise on my site. That’s ridiculous. Advertisers are too scared of the negatives. But nobody ever got fired for making the safe choice that didn’t work. Intelligent risk is a good thing.

AJ: You have to give consumers what they want.

Q: What is the difference between the value of content on your site vs. the value on YouTube or Veoh or anywhere else?

AJ: People are starting to get more risqué because users are being desensitized.

Dicl: There are some differences between “on site” vs syndication. But there is also the difference in the environment that the ad exists. People don’t come to just one spot to watch all their video. Our site will always be a premium site. And we have plenty of UGC. But we have an environment that people know will be funny. Its not all just sophomoric humor that someone shot in their college dorm. The issue, in the end, is how you connect to massive consumers that will determine the value of the ad.

Q: What is the rev split?

AJ: 10% on our site, 90% through syndication.

Q: Can you comment on the Google/Seth McFarland deal?

Dick: its something that people should watch very closely. It all depends on the content, but there’s no reason to doubt that because of his history. It’s a smart deal for both sides.

Jim: The deal sounds like it makes a lot of sense. That one seems to have all the fundamentals that you’d ask for in a deal like that.

Putting your content anywhere and everywhere your audience may travel has become the mantra of publishing, but how true is that for video? As medium sized publishers watch Hulu, ABC and CBS pursue various flavors of hyper-distribution strategy for their video, should other publishers follow suit or establish more controlled distribution schemes tailored to their own particular content and partnerships? And what are the promising business models around syndicated video. Who controls the ad space when your video property leaves your site?

Moderator:
Gary Gannaway, CEO, WorldNow
Speakers:
Chris Allen, VP, Director of Video Innovation, Starcom
Mike Henry, SVP, Veoh
Eric Hadley, CMO, Heavy.com
Patrick Keane, Executive Vice President & Chief Marketing Officer, CBS Interactive
Rebecca Paoletti, Director, Video Strategy, Yahoo

Online video right now still smells like an online media buy more than a traditional or broadcast media buy.

Rebecca: We’re always up against TV budgets. eMarketer took their spending estimates down a few weeks ago. But we’ve spent the last few months focusing on helping TV buyers understand that there is a TV like experience online, and help them understand the metrics that we can provide. If we can get the TV buyers to move just 1% of their budgets over, they could make a dramatic impact on the industry without making too much of an impact on their overall marketing.

Q: Does the money need to come from TV?
A: yes, yes, yes.

Q: What are the challenges to convincing them to spend the 1%? And whats the solution?
Rebecca: Education about the online video experience. Is it porn, is it UGC, is it a well lit environment? Is it a quality experience? TV people still think the online viewing experience is poor. We also need to educate them about metrics and buying, which is very different to them. CPM, CPC, CPE, and what is the value for that engagement? Showing the value online to TV people is the challenge.

A: Scale is the one impediment that is going to change over time that TV people will respond to. Also, understanding what works is the most important thing. In a video rich environment, how do you have to think differently about marketing to them? Stretching the definition of what the video marketplace is presents a challenge as well. We can’t compare them to what the audience looks like in a linear world. On syndication, we have the opportunity to talk to marketers not just as media buyers, but as content partners. They are learning that they can target content the same way they can target advertising.

Patrick: Advertisers need to understand that online video isn’t just “dog on skateboard.” Cost is also an issue for TV buyers. We’re talking $15 CPMs vs $30 for premium online video. Often times you are dealing with a buyer who is looking at GRPs and simple costs. Advertisers also don’t want to buy the same audience three, four and five times. So measurement is an impediment right now.

Hadley: Explaining the CPM & GRP issue is critical. Helping them create advertising and content for the web, rather than repurposing TV is key. You need to understand that it is a different experience and different mentality.

Q: We are in a marketplace where we don’t have budgets. What needs to happen to get video to scale? Does everyone need to get together ala Walmart? Where will we be 5 years from now?

A: Users are going to migrate to the destination where they can find the broadest range of content and have the best experience.

Patrick: It depends on a lot of issues, one of which is navigation. If the economics are right and the partnership made sense, things could be different. But this isn’t “Free Lunchville.” At Google, we spent a lot of time figuring out how to help people find content. On TV, we’ve got a remote control. There needs to be much better navigation for discovery. But discovery of a great content experience with online video isn’t there. I’d love to see the metaphor of search apply to video on TV as well as the Web.

Rebecca: With video, we don’t see the same billions and billions of page views like we do with text based pages. When you look at where people watch video, they all have their favorite destination, and that is because they believe that they will be able to find the content they are looking for will be there.

Hadley: There are a lot of different ways to find things. If you ask a 10 year old, you’ll get a very different answer than if you ask a 30 year old. The phone will be a big part of it. Convergence. It is going to be a different generational mentality.

Chris: Reach, scale and measurement are the biggest barriers. People buy TV for reach. Until there is an easier way to get that reach, people will still buy TV. On measureability, I’d like to be able to buy by demo, like I can on TV. There is a complimentary effect with online to TV. If CBS skews older on TV, we can get younger viewers on CBS.com. Also, people expect a certain type of content from the providers. If you want to watch Grey’s Anatomy, you go to ABC.com. Swingtown didn’t do very well because it wasn’t a “CBS” type show.

Session Description:
In a sluggish economy, when budgets must stretch, will marketers be more willing to roll the dice on running ads in questionable places? What are the pluses and minuses? What strategies, checks and balances should they have in place with regard to their agencies and networks? This panel will debate the things you’d do today, and those you’d have never done four years ago. A discussion of the learning, the pros and cons and how this economic climate is shifting media thinking.
Speakers:
Sarah Baehr, Vice President-Media, Avenue A Razorfish
Jordan Bitterman, Senior Vice President, Media & Content, Digitas
Steve Mitgang, Chief Executive Officer, Veoh Networks
Ross Sandler, Senior Analyst, Global Internet & Media Research, RBC Capital Markets

Q: What are the differences in expectations right now, given the environemnent?
A: (Julie, replacing Sarah Baehr) – A lot of the tactics are still working, so clients are sticking with the overall strategy. We haven’t seen the huge cuts yet, but they are shifting to more efficient tactics. We’re setting expectations that the ROI isn’t as strong as is was, or as it could be, because we’re being scrutinized a lot more.

Steve, Veoh: From a DR perspective, the budgets are going to get hit. In the video space, which is incredibly nascent, the opposite is happening. Its an experimental market right now, and brands don’t want to sit on the sidelines and miss the opportunity.

Q: Is it the same dynamic as the early days of search?
A: yes. Its better to be playing in the space, learning which levers to pull, making mistakes, which gives them a tremendous advantage. A brand that understands the creative, the interactivity, the flighting, etc., isn’t something you can get by reading the WSJ.

Q: Google has had tremendous difficulty figuring out YouTube. How comme they can’t figure it out? Are there structural issues? Is it premium vs USG? Lack of inventory?

A: Jordan: You are seeing things that are more ‘long tail’ than what people who are used to buying traditional broadcast are comfortable with. You are seeing less of an interest to get in there with big dollars. In today’s “flight to safety” there’s less of a push. The more digitally savvy brands are starting to play with it. But its more of a question of what to do in that space. Do you run your TV spot, or do you create custom content? Instead of being adjacent to content, you can actually be the content. But that is more expensive, so there isn’t as strong a push to do that right now. I’m surprised we don’t see more dollars in this space right now, but that will take off in the next 18-24 months like a hockey stick.

A: It is really hard for a marketer to create a meaningful form of engagement when you have what is essentially a two minute experience. We found that most YouTube videos were 9 seconds or less. What is the ad unit that you run around a 9 second piece of content? That’s YouTube’s structural problem. YouTube isn’t any more risqué than MTV.

Q: (Jordan) Will we be watching content in 22 and 44 minute lengths? Or will we be watching more short form content?
A (Veoh): We’re actually shocked at how much long form content people are watching on Veoh.

Jordan: The logistics and development costs are a lot more complex for creating content. That is one of the fundamental problems right now.

Q: Standards. Where are we on the paradigm shift in getting to where display ads are today so agencies can rapidly adopt it?

Julie: We shouldn’t be there yet. Its too soon to say “this is the right way to do it.”

Veoh: We look at ad units as the structure of what you are buying rather than looking at it as the overall campaign. We know what a 5 second or 10 second ad looks like, but we need to still figure out what the real opportunity is.

Q: Content and Transparency. Where are we in figuring out where we are in determining what is safe? Can you scan a video clip and figure out the type of content?

Veoh: A few issues there. Is there enough reach? Is the content brand safe? We make sure that we’ve got a clean, well lit environment. “The great thing about porn is that you can see it.” Meaning, you can easily identify it and remove it. Our policy is to just not have any there. On the reach side, it is still small. But if you want to reach a 15-34 audience, or hyper fanatics that tweet and have 10 facebook sites, there is a lot of density of really important people to reach. You can’t buy tonnage, but you can but very important influencers .

Q: From an agency side, are you comfortable with the metrics?
Jordan: You are taking risks when you have a brand marketer that would load up their T&Cs with caveats with where they don’t want to run. You have to look for the kind of marketer that wants to go at things a little differently. Just like the web started with males 15-34, the same thing is happening with video right now. Over time, it is going to start looking more like the world in general, and will probably get there more quickly than the web, or ecommerce or broadband did.

Q: Production quality. Is a video clip of Walt Mossberg talking about the iPhone on his webcam worth $80?
Julie: yes. If it’s the content you are looking for and it delivers the audience, than yes, it is worth it.

Jordan: Years ago, there were three broadcast networks with three hours of primetime. There were limited options. Now if I want to watch Walt Mossberg, I’m raising my hand and saying “yes I want to watch that” whether it is grainy or two minutes or 20 mins long.

Q: The web is an active environment, TV is passive. Where are we with video search? Does the activity need to switch from active to passive?

Veoh: Search isn’t going to be the primary vehicle for discovery of video. It will be part of the process, but not the primary process. Clicking the remote control on TV is about trying to find something interesting to watch, but its not searching. Its browsing. Recommendation engines and algorithms with play a much larger role in helping the discovery process.

Q: Pre-Roll. Advertisers love it. Consumers hate it. How do you think about pre-roll and using it? What is working and how do you walk the line?

Julie: You need to be careful. With pharma clients, they want to put all the legal in the ad, so you can’t do a :15, you have to do a minute long ad. If it is really annoying to even think about, it is going to be annoying for the consumer. But there is a value exchange. If the user knows there will be value there, then its not bad.

Jordan: You always need to think about the context in which the marketing is being received. You don’t want to just sit adjacent to the content. If you can have message that is specific on how to activate the experience you just saw in or along side the content, that is very powerful. Its expensive, but can be very powerful.

Julie: Samsung has a great ad for one of their new phones that you can take part in the experience of the guy in the story. Do you go to sleep or go out? The user takes part.

Veoh: We’re dialing back the inventory for pre-roll to create a better experience for the user.

Q: Where are we with mobile?

Julie: We’re experimenting, but the iPhone is blurring the line between what is mobile and what is browsing the web.

Jordan: The experience that comes from an application that is served is much more powerful than just serving a banner. We’re shifting from a WAP experience to a Web experience. You need to give people an experience that users can participate in, and has engagement that you can track on the back end. We’re looking for the “Killer App” right now. We’re moving from a “one platform, one provider” environment to an environment that will deliver the killer app.

Julie: Hopefully we’ll stay out of an economic environment that stops people from experimenting.

Q: How are DR advertisers thinking about advertising in the economic downturn?
Jordan: You may stay away from branding initiatives that are tough to measure, but with DR you know what the ROI is, so we aren’t seeing a slowdown in that.

Q: How are you looking at targeting users vs. content?
Julie: There is a huge appetite for that, particularly in the ad exchange environment. But when you look at DR metrics, heavy reach leads to conversions. So it’s a balance.

Jordan: We don’t know what the ad exchange will be called in the future, but it will become completely partner, portal and network agnostic.

Q: How will that impact the ad networks?
Jordan: The publishers control the content and who they will allow to advertise to that audience. The future of the networks will depend on the amount of quality content that you have. If this “uber exchange” comes into play, I’d be making sure I have quality content to offer, more than just the breadth.

Veoh: There will always be quality content where there will be a premium placed on advertising on that content. But we are also all creating our own quilts of what we find interesting, and there isn’t enough of that to avoid targeting audiences. Advertisers are going to need to develop messaging that works in those environments. They aren’t going to find bigger and bigger places to advertise, they are going to find lots of smaller places to advertise.

My apologies for not having everyone’s name for the Q&A. Hard to keep up and type. Sorry!

Panel: Dot Bomb 2.0?

Moderator: Henry Bloget, Silicon Alley Insider
Porter Bibb, MediaTech Capital Partners
Warren Lee, Canaan Partners
Dennis Miller, Spark Capital
Satya Patel, Battery Ventures
Brian Sieser, MAGNA

Q: Was there a bubble?

Lee: Yes and no. If you want to compare the current situation to 2000, that was a funding technology bubble. VCs invested in companies that didn’t have business models. The allocation of dollars to IT companies has remained basically flat.

Q: Estimates are all over the place, and people are saying that “companies are toast.”

A: Anyone who is not making money is “toast.” Look at who has entered and exited the market. There are too many people chasing too few good deals. There is a limited market, and there will be consolidation.

A: you can argue that there is a VC bubble as well as you can argue that it is a VC cycle. There will clearly be a shakeout in the ad network market place. There are too many companies being funded in mobile relative to where the mobile market is. But that is normal for the nature of venture capital.

A: Companies that are fundamentally based on advertising are toast. There are too many companies that ignore growth opportunities from other sectors. Google made it possible for SMB to do things on a national level more efficiently than ever before. You put up a website and grew your business. Instead of hiring another sales person, you invest in SEM.

Q: I couldn’t think of a sector more ripe for being toast than ad networks. Who will admit to investing in ad networks?

Lee: I’m invested in two of them (Editorial Disclusre: Tremor Media is one of them). Today’s ad networks are very different than they were a few years ago. They aren’t just a remnant play for low CPMs. There is a percentage of ad networks that bring true value and technology and benefit to the market. All of the ad networks are making money. The networks that will be ‘toast’ will be the ones with significant overhead and can’t pay the bills and don’t deliver margins.

A: There’s a difference between making money and building equity. In order to survive, you need scale. Scale matters. There may not be any value in these companies other than their ability to sell in the short term. Networks need to ad more value than just an incremental penny on the eCPMs. The companies that have all the pieces in place will survive. The others will make money in the short term but not may build long term equity to justify venture capital.

Q: Is twitter hype?

A: (Spark, investor in Twitter) Very few companies have the potential to become a verb. If you look at the behavior of the people who use Twitter, you see a pattern among a certain constituency that strikes you as being remarkably robust. There is something very unique going on there. We’d be arrogant if we said that we fully understood it, but there is an ecosystem being built around it.

Q: How is it going to make money?

A: We didn’t think we were smart enough to determine exactly how to monetize it. But it was very interesting to watch politicians adopting it to monitor what was happening in the world. We didn’t think subscriptions would work. We weren’t arrogant enough to say it was the zeitgeist. We think it has the potential to become a verb, and become part of the vernacular, so we took that bet.

Q: People are blaming advertisers for being slow to realize that advertising revenue is being wasted on newspapers. But people have relationships, want to US Open tickets, want to go golfing. What can we do to break down the resistance to trying new platforms?

A: That notion is a crutch. If Twitter had a salesforce, they’d be buying US Open tickets for people, too. The issues are much deeper, much more systemic, much more rationale why this is the case. Distinguishing between cost and value is nearly impossible for a large advertiser. Also, the process flows for managing media campaigns is critical. You can take $100k and spend it on search, or build a widget, or PR. For a smaller brand, and you need to make an impact nationally, you need to start with the most effective way to reach the largest part of you audience.

A: You don’t get fired for buying advertising on NFL football. You get to talk sports, go to games, go to lunch. The same question was asked when cable TV emerged. People said, “Our brand is showing up on crazy networks like Discovery. Lets just wait.” It takes a long time for people to adopt and adjust to new platforms. Now the same thing is happening for the web. Advertisers have resisted new platforms from Day One. The hypocrisy and slowness that advertisers are moving into the medium is a critical problem.

A: Until someone creates a workflow that allows advertisers to evaluate cross media and figure out which medium works best, then we’ll continue to have these problems.

A: Eyeballs are key, and it is changing. There are enough eyeballs online to rival TV. Google has made online accountable.

A: Do you know how you get an invoice from Google? Fax!

A: Agencies need to go to advertisers and be able to explain to them what is happening in the real world. The second fasted growing ad medium right now is in-store advertising. The Wal-Mart network offers more reach than any cable network, and delivers provable ROI and moves products.

A: There are pockets of people that are taking advantage of what is going on right now. But it is complicated to get your head around everything that is happening online right now. But you still can’t get engagement and interactivity on TV. The brands who want to engage in a conversation with the consumer are the ones leading the way. But there are some inherent flaws in the way business has been done.

Q: Isn’t part of the problem with video that there isn’t a great way to advertise on video?

A: We aren’t going to get stuck with :30 ads. It is very early in the game. There are companies that are solving the problems of video monetization with technology. Freewheel and Tremor are doing very interesting things to address the issues. Way more people watched Sarah Palin and Charlie Gibson on the Web than on TV. There was a $21 difference in CPMs in the medium.

A: (Lee) We’re an investor in Tremor. Too often we see companies with strong technology, but try to forcefit a solution into an advertising model. With Tremor, they are tyring a lot of different things. Some will work better for different advertisers. Tremor doesn’t try to force any one solution. They offer a wide variety of formats and help agencies make the right choices, experiment, and figure out what works for them.

A: It is still the early days. YouTube is a cable channel that people will figure out how to sell.

A: People are also experimenting with other forms of marketing, not just advertising. If you look at the expenditures between the marketing expense line and advertising expense line, you see a dramatic shift in budgets. Money is moving into other vehicles.

First Point: There is a flood of content.

Second point: people obsess over quality. Walt Disney made sure that the theme parks were impecably clean. Disney couldn’t be as successful a park without keeping it pristine. Hulu is the same way. The want to make sure that everything about Hulu is about quality. “We have heated discussions over every pixel. We’re very odd birds, and we know that, but that’s our version of street sweeping.” The details – important, but subtle – tell the users that there is something different at Hulu, down to the 16:9 thumbnails. Hulu is obsessed with quality.

Their mission is help people find and enjoy the world’s premium content when, where and how they want to. The rallying cry is more casual in tone. They want to deliver a server that users, advertisers and content owners “unablashedly love.”

First time user from Chicago, in user feedback, “My first Hulu experience made my head explode in a brain spray of awesome.”

Currently Hulu claims 8 million uniques, 119 million streams monthly. PC World Mag named Hulu #1 product of the year, ahead of the iPhone. There is tremendous advertising demand that significantly exceeded their plan, and Fox, a content partner, has seen their overall online business more than triple since the launch of Hulu just 6 months ago.

For marketers:

Take advantage of the unique power of the environment. For example, Hulu allow users to pick from three different ads from a brand, rather than trying to target the specific user. Let them decide. For example, instead of showing an ad for a sports car in front of sports content, let the user decide. Jason is a father, and actually in the market for a minivan, so the sportscar ad is wasted on him.

For entertainment clients, Hulu offers user a choice. You can watch a trailer or preview of a show as a long pre-roll ad, or the user can watch programming with the normal commercial / mid-roll interruptions. Again, giving users a choice about their experience is very much appreciated.

Be a part of a strong user experience. For long form programming, they start with a :15 second branded slate. A very simple execution. They are finding that the branded slate, plus companion banner, provide higher recall among users. The “Ad Load” on Hulu is one-quarter of what you’ll find on TV.

Leverage the power of influencers. Take advantage of people who are embedding content into their own content.

To conclude: First, there’s a big wave. Second, obsess on quality. Third, marketing.

For those of you who couldn’t make it, or had other things to do, or more likely just aren’t PR people, you missed a fun day at the PRSA’s Theory, Tactics and Technology Conference.

I had the pleasure of sharing a panel with Jordan Fischler, from Allison Partners (repping YouTube among other clients) and Doug Simon, from DS Simon Productions. The event also featured a keynote from my friend (and fellow BU Terrier) Peter Shankman, who never, ever fails to entertain and inform.

Even cooler, though, was meeting George Wright, from BlendTec, creators of the Will It Blend videos. How is it fair that I sat on a panel in a hot, stuffy room while he gets to blend a rake? Some people.

Unfortunately I had to get back to the office, so I didn’t get to meet Leslie Cauley, technology reporter at USA Today, or Saul Hansell, technology reporter for the New York Times, or Vishesh Kumar of the Wall Street Journal. But hopefully they’ll still take my calls and pitches.