Eric Picard is clearly one of the smartest people around. Its no wonder he’s one of Microsoft’s online advertising thought leaders.

He’s providing an overview of manual vs. automated optimization, and the pros and cons of exchanges for both publishers and advertisers. Blind bidding is bad for both the advertiser and publisher.

As campaigns run, if campaign goals aren’t being met, there is a flood of data to review in order to make the appropriate changes to the marketing and creative mix. Just as goals can be translated into a media plan, they can also be translated into business rules for automation. The end result? An automated agency.

But is this a good thing? Lets turn to the panelists. However, ironically, there’s a technical snafu that held up Eric presentation, and could “de-optimize” the panel.

Strategy will continue to be done by humans. Execution and optimization will be automated. And, until we can track online ad exposure to offline conversions, we’ll still need people to place value on the media and its effectiveness in the real world.

Automation will provide more data to enable better decision making. But decision making should ultimately stay in the hands of real people. People who don’t have the strategic hat on will need to reconsider their role in the media buying and planning process.

While relationships are important, media is a commodity, and the media buying process should be more about supply and demand, and less on relationships. Automation can tremendously reduce the amount of sales friction in the buying process. The value of the impression is in the impression itself. When free markets are infiltrated by people who don’t understand the value of the media in the marketplace, people can artificially bid-up the value of the impression, which reduces the overall ROI on the marketing effort. Automated markets need to be smart, not just free.

“The most important, most valuable ad bought is the one that the buyer sees.”

Just weighing in before the panelists take the stage. I think there are a lot of media buyers and planners who are definitely afraid for their jobs if media planning becomes totally automated.

Conversely, Cory Treffiletti believes that technology will enable media buyers to handle larger budgets more efficiently, which is true, of course. But it will also cut the need for all those 25 year old media planners (who consistently take a bad rap for their ability to digest all the data thrown their way) dramatically as well.

The panel generally believes that automation will change the industry over the next five years, creating new data pools and the ability to manage thousands of categories, sites, keywords, etc., which is currently not scalable.

Mediapost’s Joe Mandese is leading a panel discussion on “nomadic consumers and nomadic media,” with Alan Cohen from Initiative, Cathleen Campe from RPA, Shawn Gold from Social Approach (and formerly MySpace) Ed Montes of MediaContacts and Scott Sorokin from Carat.

Kicking off the panel, for some reason, is a check in on which candidate the panelists are endorsing. A good laugh from “Obama probably looks better than Hillary at 3 in the morning.”

Widgets again? Yep. Jeez. I’ve tuned out for a bit. Too much widget chat at the show, but I’ve had some healthy conversations with people about them and how they may put an emphasis back on Marketing 101. What are your goals, and does a widget help you achieve them? But we digress….

The core issue is media fragmentation, reach and frequency, and the thinking that needs to go into developing a holistic marketing plan rather than just a media plan (see previous post).

Radio used to be scary because there were 1,000 radio stations. Now the issue has magnified. But social media enables consumers to say “I’m not going to have ads that I don’t want on my Facebook page.”

But there’s still a built in fall back that TV has reach and is a safety vehicle for marketers. “Broadcast is dead is one of the silliest things people are saying right now.”

Nothing worse than your laptop battery dying while your boss is speaking on a panel. Well, a few things are, but I guess that depends on who your boss is. So pardon the cut-and-paste job from my notes that are now a few hours (and a few vodka tonics) late.

I walked in late to the “How to Buy Video and Look Smart Doing It” panel because the previous panel ran over. The core question is how to hit scale and how to buy it. Buying across a lot of publishers in a seamless way is very dependent on the backend technology. Tremor’s Randy Kilgore believes that technology will be they key to breaking out of the pre-roll vs. overlay box that the industry is stuck in. “People are turning offline dollars into online pennies.” There’s a need to do better.

Reset Media’s Chris Bryant believes that the content distribution model needs to change before premium content owners see a real shift. Hulu’s model starts a bit of a stir on the panel. Finally a bit of excitement, but it was short lived. Everyone wanting to get to the cocktail party definitely stifles a heated debate….and so does having companies in symbiotic relationships on the same panel. But we digress.

Chris Johnson from Brightcove says that no single format, and no single distribution channel will solve all of the issues that the industry faces. Content owners need to get content where their users are, and not wait for users to come to them. Over time, experimenting will get results, and then “lather, rinse, repeat.”

Original content for online can’t be compared to long form, TV content. Even for TV shows ported online, users are only consuming about 10 minutes online of an hour long show offline. Very utilitarian. Better targeting for the content in the video rather than site level will help. Chris Johnson disagrees: “If I’m watching Grey’s Anatomy, I’m not looking for a doctor, so that kind of targeting won’t work.”

YuMe’s Stephen Comfort said that the biggest advertisers are being the most pro-active, and bringing concepts and ideas to the market. “Just like the 1950s when Tide would bring a concept for a show, big advertisers are doing the same thing again.”

(this is where my battery died, and now I have to re-read my hand-written notes)

The discussion turned to widgets, despite the fact that the widget panel was going on in the next room. Chris Johnson talked about “marketers as publishers,” including Kohler’s branded content promoting kitchen and bath design, as well as Stop & Shop’s “why S&S is good for me” as examples of marketers leveraging their audience and their interests. He also cited Heavy.com as a publisher who clearly understands their audience, and delivers content that is totally for them.

Randy Kilgore reminded the audience to not lose sight of the fact that advertising is about selling products. The most effective advertising are the ads that sell stuff, not just the ads that make people laugh. Creating fun ads is fun, but not necessarily effective when measuring ROI.

YuMe’s Comfort said that the best campaigns are the ones where advertisers user multiple creative assets. “Go the extra mile and do the overlays and banners, too. It opens doors. There is a limited amount of content that makes sense for a :30 pre-roll.”

Brightcove’s Chris Johnson agreed, saying that leveraging offline ad content with overlays and banners makes a lot of sense and costs very little compared to the original investment.

An interesting conundrum that was discussed was the online vs. offline buyers market. Having traditional offline people enter the online space can be interesting because they don’t want - or aren’t used to - all the data and reporting that online advertising can produce. It can be overwhelming for them.

Randy Kilgore wrapped up, mentioning Microsoft as a good example of a brand embracing the online model. They spend 2.5% of their media budget just testing new formats, and more advertisers need to follow their lead.

And that, our dear readers, wraps up day 1 of the OMMA Hollywood conference. Day two updates to follow shortly.

From the Pitch Your Niche panel….

FoxSports is producing 4 hours of web-only video per day. Ed Bunnell said that video is their top priority. Peter Tyrrell from The Enthusiast Network represents about 30 sites for automotive enthusiasts. He sees video as the top demand for the audience. National Banana was founded by panelist Patrick Panzarella and the creators of the Airplane movies.

How do you create content that is appealing to advertisers and to audiences alike? Patrick is looking for advertisers and marketers to be smarter about racey content. Is Elliot Spitzer content ad friendly? Need to figure out innovative ways to incorporate a brand.

TEN Mags gets their content ideas from their audience. They are focused on evergreen content that appeals to auto enthusiasts at all stages of enthusiasm, from “how to” content to event driven content around auto shows. When developing a niche market, you have to listen to your audience.

FoxSports reaches males 18-35 and is news cycle driven, but they try to create more evergreen content as well. “Every day is a pre-game show.” As sports producers, they are also sports fans, so they are able to ask themselves “what do we want to watch,” and then create it.

AP is also (obviously) news driven. They look at their affiliates first, and compliment that experience. Newspapers lack the same content as TV news. They recently created a Citizen Journalists Network to cover politics, bringing the local flavor to similar content.

One of the challenges is helping people find the actual content. Tagging content isn’t as effective as people may think. As convergence continues to happen, we’ll lose the distinction between TV and IP based content.

National Banana doesn’t consider themselves a destination site yet. They produce content and super-syndicate it across multiple video distributors. One challenge is creating content that people are already searching for. Marketers aren’t sure what they want right now. When they want ‘celebrity content’ do they mean Brad Pitt or Elliot Spitzer’s hooker, who is a much bigger celebrity online right now.

Building an appropriate strategy is also a challenge. Joost has been struggling with traffic, and Hulu hasn’t become mainstream yet. FoxSports syndicates some pieces of content, but has a partnership with MSN to deliver sports content to their homepage. TEN Mags uses syndication of content as a promotional tool, rather than trying to monetize “the third screen.” TEN wants to play nicely with the big boys. AP is experimenting with a few different relationship models beyond their content licensing.

For third party content, National Banana will hire 3rd party writers, but doesn’t buy third party content. TEN Mags works with freelances to create spec content, but is rare that they pick up a finished piece and always maintains final cut approval. FoxSports works in conjunction with the major leagues for live events, but is primarily the sole content provider for their site. They allow advertisers to “own” a show, surrounding the content in whatever way the advertiser wants, and syndication interferes with the control of the user experience.

TEN Mags has endemic advertisers that support the network of sites. Tracking the content is key to monetization. When people pick up content, they can easily cut out a pre- or post-roll, but mid-rolls are more challenging to remove. AP is mostly monetized through pre-roll, but is playing around with the other ad formats. FoxSports mostly sells sponsorships of channels and particular content.

in the first keynote of the afternoon, Keeping Up in the Digital Age, eSurance’s Chief Marketing Officer, John Swigart provides the audience with 3 key lessions:
1- The Triumph of Action
2- No Media is Dead
3- The Defeat of the Uncertainty Principle

Unfortunately, insurance is a pretty stale topic to wrap these lessons around. The guy sitting next to me just asked me, “Is this guy at the right conference?” Ouch. Rough room.

Crazy Monday. Sorry for the lack of posting. But its all for good reason.

One thing keeping me busy is that I was asked to be the program chair for the video track of the OMMA Global Conference, held March 17-18, in Los Angeles.

So, with that, I ask you, what do you want to see and hear? There’s no shortage of conferences out there to attend, and plenty of topics have been beaten to death. Who do you want to hear from? What questions do you want answered? What information have you been seeking that you just can’t seem to find? Email me and let me know!!!