I moderated a panel this past week at the AlwaysOn OnMedia conference in NYC. It was an opportunity to get behind what the “big media” folks are thinking in this economy, and how they interact with startups. The panelists were Jessica Schell, SVP, NBC Universal; Walker Jacobs, SVP at Turner Digital; Vivek Shah, Group President Digital, Time; Jim Spanfeller, President, Forbes.com; and Sanjaya Krishna, Principal & US Digital Services Leader, KPMG. Below are the most interesting takeaways I got from the session. For the full panel, click here.
· On the overall economy, as expected most of the panelists indicated it was tough going out there, and they were focused on partnerships that drove revenue. In fact, given the pressures in the broader market, they were “more open than ever” to partner. Some of the panelists highlighted their willingness to do deals in areas like content as evidence of that openness.
· One of the key challenges they saw in unlocking more digital dollars was translating brand advertising into value online. One of the more interesting ideas was from Vivek Shah, who said that while growth in performance based advertising in a recession is to be expected (as demonstrated by the most recent Google and Yahoo quarterly results), it is akin to harvesting crops. It’s easy to pull in more food near term by harvesting more (search) but if you don’t plant any seeds (brand advertising), you may find yourself without crops in the future.
· All the panelists want to find ways to drive additional lift and yield – the “optimization” problem has still not been solved. Each were working with various contextual, behavioral, and other techniques to try and improve CPMs and deliver a more compelling story for this medium versus other areas of spend to advertisers. There were a few areas of strength highlighted, including in QSRs (quick service restaurants) and entertainment, to go along the usual weak spots of finance and autos.
· In defense of traditional media, the panelists pointed out that people turned first to CNN when news of the airplane landing in the Hudson River broke, not the blogosphere. The panel expressed a need for better curation tools.
· There was lots of discussion around the dearth or plethora of data online, and the need to make better sense of it all. Data standardization continues to be a recurring theme.
· Time Warner and NBCU both highlighted their investment arms (Time Warner Investments and Peacock Equity Fund) as one way to get introduced and a way for them to learn about startups, but quickly pointed out that the best way was to get a direct operational relationship. An investment did not guarantee a deal, and a deal did not guarantee an investment.
· In terms of mistakes startups make when engaging with big media, the panel offered the following advice: 1) don’t present a deal that assumes you’d capture the lion share of the economics out of the gate; 2) set expectations appropriately – start small and prove success rather than promising the moon; 3) focus on how to drive revenues in this environment; 4) know what items they are willing to outsource and what items they would never (such as the sales relationship).
· I concluded asking the panel what company they would start knowing the problems they currently faced in their environments. The answers: a next generation data exchange, improving the mobile experience, new back office systems designed for the digital era, improving operational efficiencies.
It was a fun panel to moderate. The panel cited numerous examples of startups they have successfully partnered with to drive mutual value, but it was clear there was a long way to go. Those of us part of the startup ecosystem should take heart!