Last Mass Medium Standing Could Be TV

One of your clients, General Motors, recently asked agencies to cut their fees back by 20 percent. And another Denuo client, Procter & Gamble, is on an austerity push. How you deal with that?

The key is, if you actually watch what all these folks are doing, they're not randomly deciding to cut budgets or scale back. What they're basically saying is, "We are going to be more careful. We're going to only fund things that have either a history or a chance of working or that are going to be increasingly important in the future."

A lot of what Denuo is doing is going toward that direction. So we're not seeing that as a problem for our small world.

If the market contracts more than it already has, will it affect the way that your company does business?

The only potential negative I can see is if there was a certain part of our business that was looked at by clients as experimental. The experimental tends to get cut whenever there is a budget shortfall. I never want to be in an experimental bucket.

Whenever there is a budget cut, there are two different things that go on. Some market leaders decide to stay or increase spending because they've discovered that the best time to pick up share is when other people begin to start cutting back. You will see certain market leaders continuing to do that. Then you will see other people basically cut back, but they will cut back on things that are not working. They will always move to stuff that's more target-able, more focused, more measurable. And they will put a massive amount of pressure on pricing.

Of the clients that you're working with, which ones do you consider to be the most ambitious when it comes to testing out new ways of getting their messages across?

I would not pick between my current clients because they're all ambitious in different ways. But, in general, two types of clients are intensely ambitious. One type of client is where the underlying behavior in how consumers buy their product is changing pretty dramatically. Those tend to be in the areas of automotive, technology, travel and, to a certain extent, finance. Those businesses have been changed by technology.

The other group of people are marketers who may not be in those categories, but who are finding that their key audiences are changing their media behaviors dramatically. So, for instance, the college students today in America probably spend more time on the Internet than watching television.

It's been a little over two years since Denuo was formed. As things have progressed in the business as a whole, were there any new twists and turns that took you by surprise?

Two-and-a-half years ago, clients wanted guidance of what was happening and what were some of the things that they should do. And today they're far more interested in finding out how to do the things that they know they should do.

Can you elaborate on that a little?

What tends to basically happen is you may tell somebody that they need to be more involved in word-of-mouth and social media. Two-and-a-half years ago, you may have had to convince people that that was important. Now they understand that, but they say, "How do we do it?"

The second big difference is that the content businesses, like the television stations, have started voicing interest in working with us.

Are there any changes that are very likely to happen that will dramatically alter the advertising landscape and, in particular, change things for the TV stations?

I think the Internet video experience will become more and more wonderful, and people will tend to watch more and more video via the Internet. So the share of eyeballs will shift. Second, consumers will spend more time with mobile Internet devices.

The third thing is, there may be at some particular stage a new generation of competition where the best parts of broadcast television, like the news, may find their competitors coming from Internet-delivered stations.

Suffice it to say that if TV stations don't get serious about the Internet, someone in the local market can get serious and compete with them. The next generation of local news may actually come from the Internet and not from a TV station.