ATTENTION, PLEASE

DIRECT TALKED recently with Rob Norman about the current state of direct marketing media buying. Norman is director, interaction at Group M Worldwide in New York, the media investment management arm of WPP Group.

DIRECT: What are the biggest challenges right now in DRTV media buying for you and your clients?

NORMAN: It's attention and audiences. The media wants to sell us audiences, which is fine. But we in the direct space want to buy prospects and the two currencies aren't the same. The magic is using our direct response data and analytics to identify in a particular program or subset what could be the highest [possible] conversion of that audience to prospects. And we all know when we're buying CPMs that we're buying CPMs of programs, rather than commercial breaks.

DIRECT: How is the inventory situation?

NORMAN: It's OK. Our clearance rates, if anything, are down year over year, which is an issue. I think the main reason is the general rise in demand in cable vs. network, and obviously vast chunks of the inventory we'd buy on a direct basis are from cable. But I wouldn't describe it as a crisis in any sense.

DIRECT: Is the audience issue specific to television? Would you apply the same thoughts to the Web?

NORMAN: I don't think we have a problem with audiences on the Web. We see the Web as still being dynamic and effective. We're seeing client budgets shift [there] more and more. We haven't had any instances this year of a client that's put less money online than it did the year before.

DIRECT: Are you seeing clients getting more adventurous about where they put their dollars online? Blogs, for example?

NORMAN: Our clients at the moment are not massively embracing that area, mostly because they have some fear about the context in which their message [will be presented]. Our direct clients are serious, grown-up kinds of organizations, like The Wall Street Journal, Pfizer and Progressive Insurance. We have very few clients that are happy to play randomly.

DIRECT: What about podcasting?

NORMAN: It's something that's happening and we are doing it — we have clients who are making podcasts and getting into the iTunes menu and so forth. The great thing is that people who are downloading podcasts are fantastically qualified as prospects. But the numbers [of users] aren't really there, so it's not really critical yet [to clients' media plans]. But I think podcasting is emblematic of the rebirth of long form, and that's something that interests us. Long form comes in various versions today — there's video on demand, download to DVR, broadband, podcast and so forth. There's more channels through which it can be delivered.

DIRECT: Is long form economically viable?

NORMAN: There was a period where companies like Apple and Philips did some long-form stuff, and I think we'll see that again. What's [probably] going to happen is more companies will crack the code on production costs. Clearly, long form doesn't work if [you're paying] 60 times what it costs [to produce] a 30-second commercial to make a half-hour program. The key is finding multipurpose video executions that we can take into long form, and then re-slice and dice for shorter form broadband and advertising, for use in store or wherever. We're starting to work with some partners who will create film with a production model that lets us advertise across a number of channels.

DIRECT: Do you see these as interactive TV-type options? Is ITV happening in this country on any scale?

NORMAN: If you take the best ITV executions, they all look like they could work in a broadband environment. I don't think ITV is going to be a big deal until there's substantial delivery. And then it's going to be super-hard to work out the difference between broadband applications and ITV applications.

DIRECT: Are you seeing clients integrating different mediums such as cable and the Web?

NORMAN: Oh, yeah. That's huge. And it's not just a drive to the Web. We're seeing that, across our client base, the percentage of responses that go to the Web vs. call centers is climbing. It allows us to run more and wider dayparts, because we know we've got the Web channel in back of it, which doesn't need anyone to answer the phone. The other thing we're using Web behavior for is as a diagnostic for our activity on other channels. One of the reasons we created the MEC Interaction [division of Group M] the way we did — in terms of integrating online advertising with DRTV, BRCs and so forth — was to create dashboards that look at cause and effect in [the light] of what happened on the Web at the home page, transaction, specific product group and application levels. [This way,] we knew what would happen to the Web traffic if we dialed up and down the volumes of inventory on television or wherever else.

DIRECT: What about search? How is pricing going?

NORMAN: You have to look at what you can buy. The buy side of search is dominated by cost per click. The issue is whether the sell side of search is dominated by a cost-per-click or cost-per-action model. There are a million different revenue events, because whether it's a visit or filling in an application, they've all got a benefit. We find our activity in the search space is focused on optimization, so we can differentiate between efficiencies and clicks. We don't always consider it a success if we're achieving tons of clicks. It's a greater success if we're getting tons of conversions. The great lie about search is that it's a free lunch because you only pay when someone clicks. That's nonsense. The engines are happy to sell us tens of thousands of keywords. Search is a game of relevance. We know that within that basket of keywords there'll be one lot driving volume; another, quality of click; and still another, consumer actions. We have to find a subset of all those keywords that's doing [what we want]. Sometimes it [creates] conflict with our search marketing partners, because they want to sell us stuff we don't want to buy.