BY JOHN ECKBERG
The Cincinnati Enquirer
Denis Beausejour, vice president of worldwide advertising for the Procter & Gamble Co., announced at last week's Internet advertising summit that he had the eggs, milk and flour before him.
What was unspoken was obvious: Who among you has the recipe for the cake?
Representatives from the world's largest advertisers, dozens of advertising agency representatives and a handful of high-tech swamis traveled to Cincinnati for the two-day conference to chart the future of the World Wide Web.
The event was loaded with Internet jargon -- traffic aggregation, media optimization, allocation models, convergence -- but it fell short of identifying a pertinent model of Internet advertising two or three years from now.
The structure of the conference, attended by about 400, was in large measure restricted to concerns about branding and selling consumer packaged goods rather than, say, offering examples of profound Internet advertising.
Brainstorming sessions were often more drizzle than hurricane. Left off the agenda were topics like execution, database marketing and direct-response capabilities of the Internet, areas with thorny Big Brother overtones.
When America Online's Bob Pittman spoke on the second day, P&G Chairman and Chief Executive Officer John Pepper listened attentively from his seat at the rear of the auditorium, taking notes and nodding attentively at key points -- one mass-market titan listening to another.
At least two sweeping questions remained at the conclusion of the summit: How long will it take to bake that Internet cake? What will it look like a couple of years hence?
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WHO'S SURFING
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Who are they? A study from Nielsen Media Research and CommerceNet released last week shows that for the first time, 50 percent of the population between the ages of 16 and 34 are Internet users -- about 40 million people.
The study also found:
About 43 percent of Internet users -- 34 million -- are women.
About 64 percent of online shoppers and 74 percent of the purchasers are men.
Seventeen percent of people 50 or older -- 13 million -- are Internet users. The number of users in that age group is growing at about the same pace as overall users of the Internet 16 years and older.
People who are 50 or older are half as likely to use the Internet as the overall population.
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While those attending were buried in statistics and nuances about the Web and interactive advertising, in the end, they received little in the way of here-and-now vision, said Larry W. Smith, chief executive officer of US Interactive and a leader in the emerging field of Internet advertising.
"One question should have been asked and fostered for discussions, and it is a simple question," Mr. Smith said. "They should have said, "Paint me a picture of what marketing looks like in five years.' When you have gathered 100 of the best and brightest, it would have been interesting to have different groups of people talk about the vision -- about what it will actually look like."
Still, Mr. Smith, who heads a company that employs 185 people at five U.S. offices with $20 million in annual revenues, came away from the summit a P&G booster.
"I feel like in their first time at bat, P&G hit a home run," Mr. Smith said. "By having the summit, they fostered an openness to communicate among otherwise vicious competitors, and that's a second home run.
"The big question here, which time will tell, is this: Will anything come of it?"
For Bob Schmetterer, chief executive officer of Messner Vetere Berger McNamee Schmetterer - EURO RSCG Worldwide, a global advertising agency with 7,000 employees and $7 billion in annual billings, the Future of Advertising Stakeholders summit meant a break in a Martha's Vineyard vacation.
At the conclusion of the second day of meetings, Mr. Schmetterer lingered after a luncheon panel about advertising agencies adapting to the new era to say he feels the pulse of a new and mysterious current.
"There is a magic (to the Internet)," he said.
"It's as if we are in England at the beginning of the industrial revolution and you want to tell people, "Yes, sell the farm, build . . . build a factory!' "
Though the summit was illuminating, he said, much of the work occurred outside formal settings -- in one-on-one exchanges between advertising specialists, technology providers and manufacturers. "There are heads of agencies and heads of companies who are clueless. But they all sense that this holds tremendous opportunity," Mr. Schmetterer said.
For the first time in the history of television, another medium has come along that has eaten into the time the average American household spends in front of their television set -- from about seven hours and 20 minutes a day to seven hours a day.
That drop led competitors to set aside differences during closed-door, off-the-record breakout sessions. Consumer product manufacturers like Kraft Foods Inc., Unilever and P&G cooperated freely.
"Seeing Unilever in the P&G building was worth the trip," Mr. Schmetterer said.
Competing advertising agencies shared luncheon observations. America Online walked the same stage as the At Home Network. Sony Online Entertainment lunched with Warner Brothers Online.
Never far from mind was the realization that American consumers might be on the cusp of a significant change in how they shop. Peapod and Netgrocer are two companies attempting to lure consumers to their online grocery stores.
But do not look for packaged-goods companies to start selling directly on the Internet to households anytime soon, said Marc Johnson, senior analyst at Jupiter Communications, who attended the summit for the interactive research company based in New York City.
P&G wants to sell detergent by the ton to megastore chains, not by the ounce directly to Aunt Lucy.
But do not rule out P&G moving to sell products on the Internet sometime in the future.
"Long term, it is not out of the realm of possibilities," Mr. Johnson said. "For now, it makes more sense for them to sell through third parties. It's wise for them to look into and work with bigger retailers as they get online because a portion of the business will come from online."
Tim Smith, founder and chief executive officer of Red Sky Interactive, a San Francisco-based interactive agency, said many people have a fear about buying products over the Internet.
That could one day disappear, particularly if trusted consumer product companies of the future put detergent on household doorsteps as needed, when it's needed and in the amount that's needed.
Advertising on the Internet is not likely to be much different from advertising during the early days of television, Mr. Smith said, when advertisers sponsored shows with a "brought-to-you-by" tag line.
Mr. Smith, whose company builds Web sites like Nike's Tiger Woods site and Land's End's first online catalog, said the promise of the Internet is one of convenience, say, eliminating trips to grocery stores for household supplies.
Mr. Smith said it is one thing to plod through a store to shop for wine and cheese -- that is fairly entertaining. It is something else entirely to shop for fabric softener.
"I frankly don't enjoy going to a grocery store to buy Tide," he said. "But if you place Tide at my doorstep with the periodicity that I use, well, when that happens, I'm all over that."
For Mr. Smith, whose agency managed the real-time Internet broadcast of the summit, the trip to Cincinnati has already been productive. An e-mail this week from the At Home Network means he will be making a pitch to a company that is already bringing the Internet to the living room television set via cable modem.
"The most important potential point out of the FAST (Future of Advertising STakeholders) summit is this: Some groups are scared, and some have their eyes glazing, but we need to take our eyes off the technology and put our eyes on the consumer," Mr. Smith said. "Rich media is a term that everyone is talking about. Rich media is nothing without a rich concept."
As American industry refines its Internet advertising, some programmers have embarked on a parallel initiative to guarantee that consumers do not have to suffer ads while surfing the Web.
The Seattle-based company WRQ Inc. has software called At Guard that blocks advertising, provides privacy for users and prevents outsiders from inappropriately accessing personal computers, said Craig Schmidt, director of network access management for At Guard.
Will programs like the $30 At Guard thwart Madison Avenue's billions? Mr. Schmidt thinks so.
"We are starting to see that click-through rates on advertisements are beginning to drop," Mr. Schmidt said. "Many advertisements are just annoying. The message is becoming clearer and clearer. Users are getting inundated by too many advertisements.
"That's what we are about -- giving the consumer the power to choose."
