April 13, 2010
 

A Conversation with Michael Hirshoren, US Director of Media Sales, Rhythm NewMedia

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I had the pleasure of first meeting Michael Hirshoren back in 2002, in front of the Japanese Consulate in New York. It just so happened that we were there attending a mobile media conference!

At that time he was with Salon.com, when that property was on the vanguard of inventing the magazine model, online. Needless to say Salon was one of the most talked-about properties in the business.

I had heard of Mr. Hirshoren prior to our meeting. It was before he joined Salon. He was at Ogilvy working on IBM. When he left Salon in 2003 he went to AOL Media Networks. His move was well-timed. It was shortly after AOL's "cowboy culture" had left the building. Michael was part of the team brought in with the mandate to transform the company into a viable, respectable business.

In essence, Michael has often been on the vanguard of change; joining companies at pivotal moments in their growth and development. When I learned of his appointment to the position of US Director of Media Sales at Rhythm NewMedia I was delighted, but not surprised. Rhythm is also on the vanguard of change.

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Tim: Michael, congratulations on joining Rhythm! How's it going?

Michael: Thank you, Tim. It's going very well!

Tim: Before we cover industry events and trends, tell me a little about yourself. What got you interested in new media and your path to Rhythm NewMedia?

Michael: I began my career in advertising at Wunderman (division of Y&R) and then I moved over to Ogilvy & Mather. The internet was just beginning to develop so I was immediately drawn towards the web. I always enjoyed technology and was interested in the new balance between technology and advertising.

Tim: That's great.

Michael: I left the agency world to work in sales at Salon.com, an early web magazine and then moved on to AOL. At AOL I saw first hand the direction and growth of mobile. I was excited by the growth of the mobile industry and its potential as a new medium. Rhythm has an exciting lead in this space with their video ad serving technology and carrier relationships.

Tim: For those who have not heard of Rhythm or are fully aware of what it does, could you provide a brief overview? How does it differ from other companies with similar goals?

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Michael: Rhythm NewMedia offers a full suite of mobile advertising solutions, including video, games and banners. Rhythm's offering includes ad serving, ad sales and content sourcing. Our ad platform, which is patent-pending, enables broad reach, sharp targeting, precise frequency management, high customer satisfaction, extensive reporting and automation of business processes. We also provide unique real-time measurement of ad effectiveness and customer satisfaction.

Tim: Sounds like you have all the promised elements of mobile under one roof.

Michael: That's been our goal. We currently have deals in place with leading mobile operators 3-UK, Telecom Italia and T-Mobile-UK, with several more coming. We work with everyone along the way to deliver ad funded content to mobiles including operators, top brands, content providers and advertising agencies worldwide.

Tim: Is there a difference in meanings between the terms wireless versus mobile? If so, what are they? If not, does it impact the perception of the wireless/mobile medium?

Michael: To me, the terms wireless and mobile are interchangeable so I don't think it impacts the perception of the medium. If you look to the past, we used multiple terms including online, web and interactive to describe the early days of the internet.

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Tim: Give us the cliff notes on the evolution of mobile advertising as a platform. What factors have impacted the growth vis-a-vis other parts of the world?

Michael: Mobile advertising has come a long way and still has plenty of room to grow as devices get more sophisticated and faster networks become a reality. I think the mobile platform is going to be one of the largest advertising channels in the world because the devices are already in the hands of the consumer. Further, people bring their mobiles with them everywhere so they are essentially carrying the medium with them throughout the day.

Tim: How is the industry going to get around the carrier issue; on-deck versus off-deck? I expect this deserves a series of interviews in and of itself. Can you top line it? Can you talk about what carriers are the ones to watch?

Michael: Sure. We feel that at this stage in the evolution of the mobile advertising market, the carriers are not actually an issue, but rather an enabler for the growth of the market. We're currently working very closely with operators 3-UK, Telecom Italia and T-Mobile-UK, with several more coming to create the best experience for the customer.

Tim: That's very interesting.

Michael: At this stage, most of the inventory is currently "on deck," or on the operator's main portal, but that could change as devices improve their web browsing capabilities for inventory off the main portal, or "off deck."

Tim: Definitely.

Michael: Another factor that will increase "off deck" usage is the rise of the "all you can eat" data plans that new devices like the iPhone are encouraging.

Tim: Sounds appetizing! If you look at Facebook and how it has opened up its platform for almost anyone to develop some application, is there relevance to what they are doing versus how you see the off-deck side of the medium develop? Will the carriers open themselves up like a Facebook? What would you like to see happen?

Michael: For now, it's hard to tell what will happen. Some operators globally have tried opening up their portals while in the US, most of the operators are taking a more walled garden approach and keeping their portals closed.

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Tim: Mobile Media is ideal for our YouTube society. That brings up privacy issues that plague it. What's going on in Washington and what factors do advertisers need to be aware of as it relates to their brand advertising? Do you believe in brands "letting go"?

Michael: Brands need to be careful in any medium, particularly social media, but there is no additional challenge created on the mobile platform. The social media companies have already worked this out and we'll be able to have the same control as the web.

Tim: What do you think of Apple and how are they helping expedite the growth of mobile advertising as a medium? Aren't they the 800 pound gorilla threat to carriers?

Michael: Apple has done an impressive job with their iPhone and has helped encourage innovation on the handset front, but they have not significantly affected the mobile advertising market. At this stage, Apple still needs to work with the carriers, like they did with the iPhone launch, even though they are a big company.

Tim: What are the criteria that advertisers and agencies must be sensitive to make sure mobile advertising will be effective versus a vast turnoff. Is it the difference between branding versus acquisition? Is it just one more line item under the online bucket?

Michael: We definitely believe that mobile can be its own medium and not just a line item as part of the digital plan, but first let's discuss brand versus transactional ads for mobile. In brand ads, the advertiser is hoping to make a positive impression on their consumers, while in transactional ads, the advertiser is hoping for an immediate or very near term transaction. Immersive experiences like watching TV where the consumer is in "lean back" mode are the best situations for brand ads. Transactional ads work optimally in "lean forward" environments like internet search. These different environments have made it so that certain media turn out to be either optimal for brand ads or transactional ads. TV is used for both, but the majority of ads on TV are brand ones and the internet on the other hand is mostly transaction oriented.

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Tim: How will it fit into the media mix?

Michael: Mobile can be used very effectively for both transactional and brand advertising as mobiles create both "lean back" and "lean forward" consumer experiences. We believe that transactional advertising opportunities on mobiles may be more limited than brand because transitional advertising must be justified by measurable revenue generated and it's more difficult and less likely that users will purchase expensive items with their mobiles.

Tim: Really? Why is that?

Michael: Right now, mobile "video snacking," or watching short clips on your mobile, is on the rise. It's one of the fastest growing mobile content categories providing a large brand opportunity.

Tim: You mentioned things like addressability and localization earlier.

Michael: Mobile answers some of the age-old problems with TV targeting and brand effectiveness in that the ads can be finely targeted by age, gender and zip code, with precise frequency control in an uncluttered setting with little ad skipping.

Tim: Cool.

Michael: We see mobile video delivering a very powerful message, to the right consumer, in a very engaged environment as the ad appears as the only message on the mobile device.

Tim: Let's talk about the people side of the business. Is there a certain type of person or job title who is best cut out to work within the mobile advertising business?

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Michael: Anyone can work in the mobile business if they have the passion to develop a new medium-it's an exciting place to be.

Tim: Who do you see "owning it" at an ad agency?

Michael: We're beginning to see that the digital groups and larger brands have "emerging media" specialists. This is very encouraging as the planning responsibility is falling within these groups. We also work with large brands who are interested in reaching consumers with a specific video creative.

Tim: What business categories are closest to "getting" Mobile Media?

Michael: We've already worked with a handful of brands from all of the prominent categories including technology/digital, entertainment, automotive and CPG. We're also seeing great interest from automotive, mobile finance, technology and travel companies.

Tim: That's interesting. Why do you think the interest is coming from so many categories?

Michael: By their nature, these types of companies have a mobile message ingrained in their business and/or product lines.

Tim: I never thought of it that way. Can you give me some names of companies you're working with?

Michael: Some of the brands we've worked with include Microsoft Windows for Mobile, Nike, Unilever Lynx, Cisco, Intel, Nivea, Mazda, Paramount, Nikon, BMW, P&G, Sprite and Toyota.

Tim: How prevalent is the pre-roll/in-stream model right now and where do you see it going? Do certain pre-roll companies also offer Mobile applications of their own?

Michael: We see ad funded solutions in the form of pre and post roll working the best for mobile content, such as video. Consumers don't want to pay for video on their mobiles but they do want to watch short news, sports and celebrity clips on the go.

Tim: I agree with that! Do you have any research on consumer behavior?

Michael: Jupiter recently came out with a study that shows that 25% of consumers would be willing to watch video on their mobiles, but only 1% would be willing to pay for it. We've actually found similar numbers in our service as the operator 3-UK has over one quarter of their subscribers using mobile video from Rhythm which represents over 1 million subscribers.

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Tim: How do you view the larger media marketplace these days? How is it touching your business? Many marketers are just still trying to figure out email marketing, let alone rich media etc...

Michael: Agencies and brands are always thinking about "what's next" because the media market place is growing bigger and changing every day. Technology is one of the enablers that allows for the rapid changes in the industry.

Tim: Yes, but aren't they going to have to get through a lot of other apps with their business before they just leapfrog over them all and go straight on to mobile?

Michael: Marketers are beginning to fully understand the fragmentation in media consumption and the fact that consumers are not watching TV, reading magazines, newspapers, or even surfing the web in the same way they were a few years ago. What this means is that there is a great opportunity for new ways to reach distracted consumers, and mobile provides one solution.

Tim: But aren't there creative hurdles that present obstacles?

Michael: Rhythm makes it easy for anyone to place their first mobile advertisement by providing clear and easy ways to re-purpose creative campaigns and reach the desired target market.

Tim: Marketers are still trying to get their minds around search. No one knows that mobile has more relevance with a search strategy than other net access points. Why don't people know that?

Michael: Presently mobile search and discovery is difficult so it's hard to tell if mobile search will prove more relevancy than online. It'll be interesting to see how Google will act within the mobile search category.

Tim: That is interesting. We've spoken about the relationships with advertisers and agencies. How do you manage your publisher relationships?

Michael: Rhythm is actively growing our content globally. We have great interest in adding more content to our inventory. We're constantly signing new deals and acquiring new content. For the most part deals are non exclusive so it eases the competition for mobile content.

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Tim: That's very cool. You're definitely on the edge of bringing it all together.

Michael: We're enjoying the process!

Tim: How would you rank things like tech versatility, consumer experience, service, cost or creativity, the art of the possible?

Michael: Rhythm can help with any part of the process, but our largest asset is tech versatility and consumer experience. Since at this time it's difficult to even deliver a basic video ad online, it's even more complex to deliver a video ad on the mobile platform.

Tim: How early are you brought into conversations with creative teams in their campaign development?

Michael: We're the most useful to our partners when large brands are discussing distribution of their video assets to their target demographic.

Tim: Do you help them lay out story boards?

Michael: If they would like us to help. We have the capability to create a more efficient buy with creative storyboarding, an effective tool to use multiple creative.

Tim: Much has been made that mobile advertising is now largely in ad auction systems, which shows little demand. Is that due to lack of knowledge and/or interest, or is it due to the fact that the medium is not large enough to scale and therefore not worth the time?

Michael: I haven't seen mobile portrayed that way. Rhythm has developed more of a premium video network working with top carriers and content partners. The medium is much larger than you might initially think and is more easily measured than other types of media.

Tim: How much help has the IAB, OPA, WOMMA, and OMMA been?

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Michael: We're excited about working with all different kinds of associations to help grow the mobile advertising market and create standards that will enable future growth.

Tim: How about the MMA?

Michael: We've been very active with the MMA specifically to help drive new advertising standards and guidelines which are designed to increase the uptake of mobile advertising by brands as well as improve and protect the consumer's experience.

Tim: What does the future look like?

Michael: The future looks very promising, particularly for companies like Rhythm which are leading the next mobile generation. Carriers and media companies all see an amazing future for mobile. I fully expect this business will grow according to all of the projections reported Gartner Inc., such as its growth to $3.9 billion in North America and $14.7 billion worldwide by 2011.

Tim: We'll be watching. Last question. What advice would you give a person graduating college today about choosing their career?

Michael: I would tell them they have enormous opportunity in the digital media industry. I've always been a huge advocate of trying to attract recent college graduates into our industry as digital media provides a great mix of advertising, marketing and technology. Almost any digital group would agree that they are having a hard time finding great talent. Come on board!

Tim: I agree with you there! Thanks, Michael. This was great!

Michael: You're welcome, Tim. It was my pleasure!

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