Digital dreaming

Aegis Media heads into 2008 with some solid momentum. The company saw out 2007 with a 25% year-on-year increase in revenue around the region and some major moves on the online and digital fronts. Heading into 2008, Aegis will continue to rollout its digital iProspect agency and focus on integrating its many offerings, which could see the launch of Aegis companies such as its outdoor Posterscope business, Viseum and potentially the Aegis-owned mobile media agency Marvelous Mobile. Patrick Stahle, CEO of Aegis Media Asia Pacific, tells Marketing why measuring return-on-investment is so critical today and why digital will soon sit at the heart of all media.

What are some of the challenges for Aegis in the Asia Pacific region?

A key challenge in general is to embrace the growth of the region and manage the growth of the region. That goes both for offline and online businesses. That also means embracing some of the new services and new opportunities that come up in terms of digital solutions and anything from mobile to classical web marketing. We believe Asia Pacific is really the growth region of the future. It will not take many years before China is the second largest spender in advertising in the world. Because the growth is so much quicker it's going to be very important to have a strong network.

How much of a focus is digital for you and the APAC operation and how important will digital be over the next five years? 

Our view is that over the next five to seven years, almost every media is going to be digital. The way we define digital media today is going to be redefined over the next five years.

Will digital make the ad models that agencies and clients understand today, a thing of the past? How quickly do you expect things to change from here on in? 

The biggest revolution that we believe in is that classical media and tradition media are going digital and that is going to change the way advertisers use them. We will move from classical mass communication much more closer to a version of one-to-one communication, where digital allows you to measure the effects of the media in a much more detailed way. It doesn't matter if it's out-of-home, television or the internet, when you're digital you can actually create a dialogue. We're now seeing more and more platforms coming out in the market, for example digital television, which allows advertisers to create a dialogue with consumers. The same with out-of-home, which is now becoming much more digital with tools like Bluetooth, so suddenly you can have a dialogue with consumers and not just show them a poster, but talking to them and giving them a response like a coupon or a web address or a even a file direct to their mobiles if they want it. Technically you can be much more customised, you can marry for example digital radio with out-of-home.

What are the benefits of all of this? 

One of the biggest opportunities is that all the activities are going to be much more measurable in the future, which means that the media will have to prove that they can create sales for advertisers otherwise they will not get the advertisers money. This will rock the classical models that media owners have today. They have been used to selling eyeballs, but advertisers are not going to take that in the future. It will be a much more sales driven model. If you take something like search for example, you can actually optimise and see exactly which words are shifting your product. For most media it's going to go that way.

What will happen to direct marketing in all of this, because this is all sounding a lot like direct marketing. 

Direct marketing agencies have a great advantage because they have been brought up in the world of measuring and always having accountability as the key thing. And not just accountability of awareness, but the accountability of moving products. Over the next five years in some networks the direct marketing agencies will take control over the creative process. Which had happened for example in DraftFCB. Draft is a very good American DM agency and they actually swallowed FCB. I think that is going to happen more and more.

Where do you see the next big trends in online and digital marketing? Will social networking continue to be a major phenomena? 

Social networking is a very strong and interesting phenomena. What we haven't seen yet is the advertisers and also the agencies find a good way to tap into social networking and capitalise on it. You've seen all the chatter and they've tried to do it on Facebook, but they get massive negative responses from users. When somebody can find a solution of how to tap into social networking as advertisers without upsetting the consumers, that will be very important.

TV is still a mass medium for many big spending clients in Asia, especially China. Do you have to be mindful of this when you're constantly thinking about how to move the group further into the digital era and does it annoy you?

No. That's what so interesting about the market here in Asia. In many markets it's still very TV driven. So we don't talk about a shift tomorrow, but more about a rapid shift over the next five years. This comes hand in hand with the penetration of broadband, which is of course expanding. Broadband will enable IPTV, it will enable a lot of things. Television is still an important medium and in some markets is the only way to distribute information, but you need to understand when you should use television.

Do clients understand online and digital marketing and the benefits it can offer? If not, who's fault is that... the online industry, lack of time, or marketers just don't care - leave it up to the media buying agencies! 

Many marketers are not prepared to shift a proportion of their marketing budget into research and analysis and that is actually hindering them from using all the opportunities they should be, especially if you operate in the retail sector. My rule of thumb is that if people are spending 3% on research and analysis, they probably need to move that to 7% or 10%, because consumers behavior, in terms of media consumption and buying consumption, is changing so rapidly they need to understand what is happening. You can't do things the old fashion way, you need to understand how consumers are shifting. Competition for shelf space and consumer minds is ever increasing. The key thing is you need to me more pragmatic in terms of what you measure.

How much longer will tradition media like newspapers and radio play be a key and influential part of the media buying and planning cycle? Or have they passed their used by date already? 

When we talk about traditional media, the biggest change is not that we will talk about them as traditional media, but how we will use them when they become digital, so how do you use the newspapers of the future with a combination on mobisites, online magazines and printed magazines. The big challenge is how to make all these opportunities work together. Yes, TV, newspapers, radio and cinema will still be there, but they will be there in a different way.

Currently digital makes up about 35% of Aegis business around the region, where would you like that to be in five years from now?

That will almost be a complete turn around, so 65% of our business will be digital and 35% offline. It will be hard to measure in the future because everything will be digital. If you watch IPTV on the internet, is that considered TV or the internet? If you watch a screen on out-of-home which is digital and changing 85 times a day, is that digital or is it posters? So in the future it will be very hard to measure in the way we do today. We are really trying to keep up the pace, because it's too early to say we are ready, but we continuously make sure we are ready for everyday.