Aegis North America CEO Sarah Fay, in a conversation with Andy Serwer, Fortune’s managing editor, at Future of Business Media conference hit on all the touch points facing the ad industry right now: the state of ad spend, the divide between traditional and digital, the Google (NSDQ: GOOG) issue and M&A activity. In general, Fay expressed a relatively sunny take on the turbulent media industry at the moment. Some silver linings and highlights below:
— Bullish on M&A activity, display: During the audience Q&A, Fay noted Aegis’ eight digital acquisition this year — a company called IF based in Malaysia — and added that the company has no plans to pull back on digital M&A, especially in emerging markets. She added that while search’s accountability is even more crucial to marketers during an economic downturn, the importance of online branding will make display more attractive as well.
— Google/Yahoo: Fay said she’s not a fan, though she was hopeful for a Microsoft/*Yahoo* combo, simply because she felt there was more complementary aspect to both. With Google, Fay said: “I worry about the impact on competition.” More after the jump.
— Staring contest: Is it really all that bad? Fay: I think there’s the expectation that we’re looking at a severe downward trend. There’s a staring contest going on right now among a variety of players. Ultimately, I think that spending could be more up. We projected down to the high teens from 20 percent in China. As for the rest of the industry, some parts are expected to do worse than others. We’ve seen a drop off in autos and finance. But we’re waiting for the other shoe to drop.
— Traditional vs. new media: Fay talked about integrating strategically: We used to begin every product launch with, “What do we want the customer to see or hear?” Now, it’s “What do we want the consumer to do?”
— The *Google* strategy: Fay: They’re a huge partner in search. We’re also using *Google* TV Ads — but it’s not a big enough footprint to make a difference — and some of their other properties. We believe in YouTube and there is a commercial model there. There’s so much innovation going on with *Google*; who knows what’s coming up next?