June 11, 2003 - By Chris Marlowe, The Hollywood Reporter

The advertising industry is in a state of confusion caused by entertainment technology, a panel of experts said Tuesday. But while some ad firms are struggling to maintain the status quo, the panel believes that the smarter contingent is looking toward new alliances and strategies as a way forward."

I can't imagine a more exciting time to be in this business," said moderator Jerry McGee, co-president and executive creative director of J. Walter Thompson L.A. He made it clear that this is both despite and because of the rapid changes. "Everything in the advertising business is upside down, and nobody has the answers," he said.

A generally positive tone had been set early in the day's proceedings when, in his role as host, Digital Coast Roundtable chairman Robert J. Dowling observed that there was conflict between the promise and the reality of technology that could be resolved by the combined effort of those affected.

"Unless there is change, there is no opportunity," said Dowling, editor-in-chief and publisher of The Hollywood Reporter.

No clear picture of advertising's future has yet emerged, but McGee said it will be shaped by people who are their own programmers because they use technology to put their personal media experience together.

Advertising is responding by forming new relationships with movie and television creators, said Christopher Gebhardt, a partner at Integrated Entertainment Partners, a newly formed venture of Walt Disney Co. executive Richard Frank and Ziffren Brittenham Branca Fisher. "It's a shotgun marriage between advertising and Hollywood, and technology is the shotgun," Gebhardt said.

It is also important to realize that many metrics are no longer valid, said Lucy Hughes, vp and associate director of IM Futures Initiative Media North America. Now that people are in charge of their media and content experience, she said, "connecting with — not reaching — consumers" was essential.

Carol Terakawa, head of entertainment sales at Yahoo! Movies and Yahoo! TV, said technology offers new data that helps solve these problems. It is now possible to accurately determine not only how many people saw the Web page a movie ad was on but also how many watched the trailer, entered the sweepstakes and offered data for further marketing messages. Still, it is difficult to quantify an ad campaign's effect. "It's a strong dotted line," rather than a solid one, she said.

Meredith Momoda, vp integrated marketing and promotion at ABC Television Network, noted that entertainment creators are more involved in advertising than ever. She gave as examples "The Matrix Reloaded" and her own experience working with Sprint and Toyota to make "Push, Nevada" a reality. "Everyone is rethinking the business on a daily basis," Momoda said, but agencies "still had the power of negotiation."

Forward-looking ad agencies are changing their function by bringing in best-of-breed expertise in interactivity, direct response and other disciplines, using outsourcing when necessary, McGee said. "But the client has only one throat to choke — mine."

The panel discussion took place at the Peninsula Hotel in Beverly Hills. The Digital Coast Roundtable is a nonprofit leadership organization whose members are at the forefront of the convergence of entertainment and technology.