Reach influencers in small groups: FTC consumer forum

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WASHINGTON -- There is no doubt this is a time of chaos for marketers, but it is also a time of great opportunity.

This was the key premise of Alan Schulman, chief creative officer of Brand New World and a panelist at "Protecting Consumers in the Next Tech-Ade," the Federal Trade Commission's public hearings taking place Nov. 6-8 at George Washington University's Lisner Auditorium. Lydia B. Parnes, director of the FTC's board of consumer protection, was the panel moderator.

"We've gone from a mass marketing world to a micro marketing world," said Mr. Schulman, whose New York-based creative agency specializes in emerging media. "What we have to do now is reach influencers in small groups…and that will push the marketplace outward virally. Our model is changing."

Mr. Schulman said there are new technologies that allow advertisers to target people at the sub-DMA level, such as technology from a company called Visible World. He said this technology allows a cable operator to deliver a commercial to a set area, such as a micro-segment of a ZIP code.

"It used to be that through network television you had to buy a whole city," Mr. Schulman said. "Now we can shave that down to small cities."

But he doesn't think one-to-one individual marketing is the future.

"We are not at the point yet where we are reaching you at a one-to-one basis through your cable box, nor do I think we will be at a point where we are even interested in a singular message for a singular household," Mr. Schulman said. "It's just not going to be efficient."

Mr. Schulman said another technology that helps companies to micro-target is podcasting.

"Podcasting give us the opportunity to get more finite about targeting people who are interested in certain subjects," he said.

Another trend discussed was the fact that currently consumers are in control of content - not Hollywood.

"The consumer creates a video for YouTube, posts it online, and millions of people see it," Mr. Schulman said. "The question for advertisers is, 'How do we align ourselves with user-generated content that protects our advertiser brands?'"

He said that there are many examples of user-generated content where the content is being shared legally as well as illegally.

"We have to be very careful about appearing alongside user-generated content because of the digital rights management issue," Mr. Schulman said.

The last trend highlighted was how marketers will have to change their pattern of creating traditional, 30-second commercials with a beginning, middle and an end. They will have to switch to creating both shorter and longer-form commercials that can be used with the new digital platforms, such as video-on-demand.

"So, while it is a time of chaos for advertisers right now, it also a time of great opportunity," Mr. Schulman said.

Fellow panelist Joseph Bates, director of research for the Arlington, VA-based Consumer Electronics Association , also gave an overview of the types of electronics products that consumers are buying now and in the future.

The most important shift is the movement away from analog to digital products, Mr. Bates said. And while this has already taken place, it will grow and improve in the coming years.

MP3 players, digital cameras, digital video recorders and digital televisions, for example, have all grown over the past few years and will continue to grow for the next few years.

"We see all these digital technologies, and that's where the past meets the future," Mr. Bates said.

In the future, people will also continue to use cell phones, portable computers, cordless phones, game consoles, DVD players, and televisions -- they will just replace or upgrade these products as new features are added.

As for other new technologies to watch for, Mr. Bates said, "As we go forward, consumers want to take control of what they are watching, and what they are doing, and when they are doing it, so home entertainment will continue to increase.

"In terms of entertainment, we'll see [more] media center PCs, home theaters, high-definition displays and video games," he said.

In terms of connectivity, he sees home networks that are enabled by wireless technologies such as Wi-Fi, as well as Internet-enabled services such as Internet TV and Internet telephone.

He also said they'll be a movement toward robotics.

"Maybe not the Jetsons' stuff yet, but something like the Roomba, which goes around and sweeps stuff up off the floor," Mr. Bates said. "That is a robot, and these robots will increasingly be seen in the home."

He noted there will be a movement toward convergence in consumer electronics with home appliances.

"We'll see brown goods - what we traditionally call consumer electronics goods - merge together with white goods - which is what we call home appliances - that [will allow for] Internet-enabled refrigerators and ovens," Mr. Bates said.

For example, he said that at the Consumer Electronics Show in 2005, there was a $4,000 refrigerator/oven on display that allowed its owner to call it up on a cell phone to tell it to start cooking whatever was in the refrigerator form that morning.

There also will be more innovative hand-held communication devices, such as fully equipped cars with Internet access as well as high-definition or satellite video and wireless broadband connections allowing drives to get information on the go.

In general, all this new technology means "advertisers will have to change their business models," Mr. Bates said.

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