Bottles of champagne were popping outside Nada Stirratt’s 15th floor office at MTV Networks (NYSE: VIA) Thursday afternoon as staffers prepared for the Viacom company’s Christmas party. Stirratt, EVP for MTVN’s Digital Advertising group, and Jason Witt, SVP and GM of the group’s new creative unit Digital Fusion, were in a celebratory mood, relieved that the background work behind this week’s $500 million ad serving and content deal with Microsoft is done. Also, the two have been putting together Digital Fusion over the past few months and are poised on the next step in MTVN’s evolving digital strategy.
“I got here in July of last year,” Stirratt said. The first thing “was creating a centralized digital organization around sales. Now, we’re focusing on offering ad agencies and marketers our creative capabilities and consumer insights. That’s where Digital Fusion comes in.” Stirratt and Witt discussed the details of the group’s formation and its plans over the next few months. In particular, she sees MTVN focusing on two things from an advertising standpoint: becoming “screen agnostic” and pushing greater levels of “convergence” between the TV and digital sides and “taking mobile anywhere we can.” Continue after the jump for excerpts about the deal with Microsoft, (NSDQ: MSFT) DoubleClick, plans for 2008, why they think convergence ad selling will work this time, and more.
— The Microsoft deal: Stirratt: “Microsoft is one of the few partners that can take advantage of everything from distribution to event marketing to technology. We’ve done a lot of work with Microsoft for many years from a technology standpoint. And so we’re very excited about using the ad serving platform and working with [aQuantive’s] Atlas, in part, because of the technology Microsoft can bring to bear on those capabilities. Plus, they have a thousand-person global sales force and that’s fantastic to have a partner that can help sell our available inventory. That all goes toward allowing us to place more of our focus on Digital Fusion and creating branded advertising.”
— Not Viacom vs. Google: She was emphatic that Viacom did not dump DoubleClick as its ad serving partner in order to punish Google, (NSDQ: GOOG) the target of its $1 billion copyright infringement lawsuit. Stirratt: “As anyone who knows this business can tell you, you would never switch an ad server for petty reasons. You just wouldn’t do that because your business could crumble in five nanoseconds. I’ve heard those comments and it’s only made by people who don’t have a clue about the function of ad operations. We are still a partner with DoubleClick and they will continue to do our ad serving internationally for us. It doesn’t turn off on Jan. 1. Migrations take time. So this is not about being mad at another company, because there’s always going to be room to work with other partners. That’s the nature of this business.”
— Refining, not a reorg: Following the centralization of digital ad sales, MTVN’s TV advertising group was organized along the same lines in February: three separate groups to handle music and news, kids and family, and entertainment. Stirratt said the announcement of that change was not as big as it sounded: “The press releases that all came down in February made it sound like a big corporate reorg and it wasn’t. It was just a much closer alignment. Unrelated to all of that was, a couple of months ago, Brand Solutions, which had been a centralized group that did media planning and selling for a select number of clients within Viacom’s portfolio and the MTV Networks. What we had found was that a lot of properties had their own scale, and servicing was being done within the three different groups. So it wasn’t that Brand Solutions went through a demise, it was that a number of accounts got smaller and smaller and were shifted.”
— Ad solutions, but not an agency: Stirratt and Witt are sensitive to Digital Fusion being perceived as an encroachment into ad agency functions, taking great pains to say that it’s meant to agencies in finding creative executions within MTVN. Witt: “We work with agencies and, the way I like to describe it is, there’s no agency out there that’s going to focus on how to take one of the character from The Hills and use them as a vehicle for connecting consumers and advertisers. We’re growing to thousands and thousands of connection points – not only sites, but within that. There’s no external organization that’s going to invest the time to figure out how to tap into them.”
— 2008 goals: Stirratt: “We are going to focus on convergent deals. That’s our point of difference. We’ve got the collaboration between the different parts of the company nailed down. When we’re sitting down a year from now, not only are you going to see us grow this business significantly, but you’re going to see this tremendous balance between digital-only and convergent deals. And we’re going to bring mobile everywhere we can. Our big dream is that we as a company become screen agnostic.”
— Making convergence work: Past attempts at linking MTVN’s various platforms weren’t always seamless or successful. Stirratt and Witt insist there has been progress, but they are emphatic that what they are putting together qualifies as an entirely new approach. Furthermore, Witt said that marketers have a greater understanding of what they want to achieve from the cross platform deals: “The internet is not about taking old media models and reapplying them. The process of setting up the ad sales function and now, having the ability to bring creative and analytical methods from all parts of the company into that mix was the missing piece.” On the subject of pricing, Stirratt and Witt were reticent, saying only that the increased levels of scale thanks to its new structure, along with added tools from its Microsoft relationship, would naturally result in more favorable rates.
— New products: By the end of next quarter, Digital Fusion expects to have several new products in place but Stirratt and Witt were short on details. Witt: “The general answer is I would expect to see new ad products within casual gaming and interactive video overlays. The third piece is mobile and the fourth is social media open platforms. Last month, we launched a widget program with a fast food marketer that worked across multiple sites and had a 360 degree grab-and-hold experience. One of the things that you can’t do with sales — but that Digital Fusion can do — is tap into viral traffic. There’s a big audience out that that’s doing stuff with respect to MTVN or about us, but that aren’t on sites that we officially represent. One of the ways we crack open that conversation directly is with [Viacom-backed social media aggregator] Flux. I can’t tell you we’ve got anything immediately on the horizon. But I’m not going to call it a day by having a sponsorship on a widget.”