Ballmer: All Traditional Content Will Be Digital In 10 Years

Steve Ballmer said Wednesday that the global advertising economy has been permanently “reset” at a lower level, warning that media companies should not plan for revenues to bounce back to pre-recession levels.

Speaking at the Cannes Lions International Advertising Festival, Ballmer argued that traditional broadcast and print media would have to plan business models around a smaller share of the advertising market, as revenues continue to move to digital outlets. “I don’t think we are in a recession, I think we have reset,” he said. “A recession implies recovery [to pre-recession levels] and for planning purposes I don’t think we will. We have reset and won’t rebound and re-grow.”

Ballmer, named media person of the year at this year’s festival, also painted a bleak picture for the future of traditional media, arguing that newspaper publishers have failed to generate new revenues from the digital opportunity. He said that within 10 years all traditional content will be digital and yet, Google (NSDQ: GOOG) aside, publishers are failing to generate serious digital revenues.

“All content consumed will be digital, we can [only] debate if that may be in one, two, five or 10 years,” added Ballmer. “There won’t be [only traditional] newspapers, magazines and TV programmes. There won’t be [only] personal, social communications offline and separate. In 10 years it will all be online. Static content won’t cut it in the future,” he added.

“Some say that the ad-funded model has not led to profitability. Google’s search site makes money but past Google is there a publisher with an ad-funded or fee-based model that has made lots of money? No.”

For media businesses to successfully evolve they must provide the right combination of context and relevance to make a compelling online proposition for consumers, according to Ballmer. “There are problems with digital advertising. Start with content and the website environment and [ask] is it suitable for advertising. [That] question is somewhat in the balance as we move forward,” he said. The old approach of simply trying to replicate a print newspaper online is doomed to fail, Ballmer added.

During a question and answer session after his speech, Ballmer was also asked about Microsoft’s interest in acquiring Yahoo.“We have no interest in acquiring Yahoo (NSDQ: YHOO). What we have said is that we will continue to remain open to a partnership with Yahoo,” he responded.

Source: http://paidcontent.org/article/419-microsofts-ballmer-all-traditional-content-will-be-digital-in-10-years

Tags: Steve Ballmer, Microsoft, Technology Prediction, Digital content, Analog content, google, Yahoo, Cannes Lions International Advertising Festival, Ad-funded model, Global Best Practice, Print media,

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Microsoft and Publicis Strike Deal

Microsoft (NSDQ: MSFT) and Publicis Groupe, owner of ad networks including Saatchi & Saatchi, have struck a deal to tap into data from TV set-top boxes to deliver highly targeted TV ads. The deal, which will also create new digital advertising formats, was struck with Publicis Groupe’s combined media operation Vivaki and announced at the Cannes Lions International Advertising Festival.

“Everything in this announcement is about digital media,” said Curt Hecht, president of Vivaki Nerve Centre. “It is about more accountability in TV advertising, which is long overdue, using data and technology. On the content side, it will allow companies to better build brands and we are also looking to the future of advertising with new formats.” Vivaki will develop an advertising exchange using Microsoft’s Admira technology, which taps into user data in set-top boxes.

Publicis Groupe clients will be able to buy audience-specific ads based on information gleaned from the viewing habits of US households who watch TV using set-top boxes.

The second part of the deal involves developing new digital ad formats and will build on Publicis Groupe’s existing initiative, called the Pool, an alliance involving Microsoft, CBS (NYSE: CBS), Hulu, Yahoo (NSDQ: YHOO), AOL (NYSE: TWX) and Discovery (NSDQ: DISAB) that has created a new pre-roll advertising format expected to launch in January.

After today’s deal, Microsoft will help develop and launch 10 advertising formats in different areas, including user-generated content, mobile phones and social marketing. The two companies will collaborate on creating digital content for Publicis Groupe clients.

Microsoft will support Publicis-owned PBJS, a production studio, to develop digital content and programming ideas that Publicis Groupe advertisers will be able to sponsor, ad fund or otherwise support.

“Marketing is not an exact science, it is the last great area that needs to be made more efficient,” said Scott Howe, corporate vice president of advertiser and publisher solutions at Microsoft. “The famous quote that advertisers don’t know which 50% of their advertising is being wasted [can still] be true. This collaboration could change the industry.” The deal is non-exclusive.

Microsoft has come out with a flurry of media buyer announcements this week to capitalize on the focused attention of the ad industry at Cannes. A few days ago, Interpublic Group’s Mediabrands unit said it will be working with Microsoft on software that automate certain functions in the media buying and planning cycle.

The Vivaki arrangement is essentially an small expansion of the “open source” platform that Publicis Groupe unveiled a year ago this month when it announced a partnership with Microsoft, AOL, Yahoo and Google (NSDQ: GOOG). The agency’s alliance with Microsoft on targeted TV ads also suggests that media buyers are waiting for the slow movement of companies like the MSO-backed Canoe Ventures to produce an actionable addressable TV platform.

Source: Microsoft, Publicis, Interpublic Group’s Mediabrands, Publicis Groupe, AOL, Yahoo, Google, Vivaki arrangement, Global IT and Business News, PBJS, Discovery Channel, Cannes Lions International Advertising Festival, Saatchi & Saatchi, Vivaki Nerve Centre,

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