Host:

         Id first like to introduce our panelists, Larry Liason, senior

vice president GMC Cyberworks.  GMCyberworks is responsible for the

execution of GMs vision of new technologies.  It manages the interactions

between the numerous creative, technical and media suppliers, supervises

interactive testing, negotiates all contracts and seeks to share learning

among GMs divisional marketing and advertising staff.  Dennis Brodesure VP

of advertising for Proctor and Gamble.  Dennis is responsible for the

worlds largest media budget and presides over P&Gs North American Brand

management org.  He has lead the creation and oversight of P and G

interactive the companies newly established marketing team.  He is VP and

general manager for P and G in Japan and China.  He is ranked in top 50

power marketer.  Mary Ann Capanetto is director of world wide media

strategy and operations since April 94.  She is responsible for the

corporate management of IBMs global advertisement media investment

strategy and operations.  She was director of corporate marketing of Dow

Jones where she created landmark strategic branding initiatives.

Larry:

        


Larry Lozon, Senior Vice President/Director, General Motors Cyberworks General Motors Cyberworks is a new concept organization responsible for the execution of General Motors' vision in the area of new technologies. General Motors Cyberworks manages the interaction of numerous creative, technical, and media suppliers, supervises interactive testing, negotiates all contracts and seeks to share learning among GM's divisional marketing and advertising staffs. Mr. Lozon is widely recognized for his innovative contributions to the new media environment, and his knowledge of both the technology and media landscape have led to several industry innovations which have been employed by General Motors and within the new media industry at large.

Gmcyberworks was created in 1996 as a shared learning catalyst

org.  to support the brand management system with GM.  What we have by way

of the automotive category is one of the most interesting and compelling

market applications you can put on the web these days.  Weve been doing a

lot of learning.  It includes top line issues around what Dennis mentioned

earlier, areas of measurement and convergence and where the medium will

take us next.

Dennis:


Denis Beausejour, Vice President, Advertising, Procter & Gamble Denis Beausejour is responsible for one of the world's largest media budgets and presides over P&G;'s North American brand management organization. He also has led the creation and oversight of "P&G; Interactive", P&G;'s newly established interactive marketing team. Prior to his current role, he served as Vice President and General Manager for P&G; in Japan & China. For the past two years, he's been ranked among Advertising Age's "Power 50" Marketers

 

         Were at a moment in time where the medium is at such an infantile

and opportunistic stage that we really need to break out of what were

doing right now from a marketing and advertising stand point to facilitate

the expansion of the web into meeting more consumer needs in more profound

ways and engaging more world wide advertising and marketing communities in

the delivery and evolution of their brands as this medium takes hold.  Its

a time of terrific opportunity from our standpoint that we want to reach

out and push the envelope and to do that we have plans for this summer

where we plan to get advertisers and industry participants to look at the

barriers and come up with some breakthrough new ideas about how we can

move forward and capture that full potential.

Mary Ann:

Marianne Caponnetto, Director of IBM Worldwide Media Strategy & Operations, IBM Named Director of IBM's Worldwide Media Strategy and Operations in April 1994, Marianne Caponnetto is responsible for the corporate management of IBM's global advertising media investment strategy and operations. Prior to joining IBM, Ms. Caponnetto held the post of Director of Corporate Marketing at Dow Jones & Co.

         The Internet is IBMs defining medium.  We really feel that now

more than ever that its very strategic for us.  Its really the core of our

business strategy and I dont know if I asked the question, Is there

anybody out there who hasnt heard of ebusiness.  Im assuming that this

audience is familiar with ebusiness.  Its IBMs core strategy.  Its the

area that we intend to carve out leadership now and in the future.  It

really centers on connecting a businesss processes and systems directly to

customers, employees, suppliers, business partners, all through the

Internet to expand business.  Its the center of our media strategy.  Four

years ago we started in the medium with the presence on one site hot-wired

in the US.  We were really just feeling our way.  Now in 1998, we have 800

sites in 50 countries.  Its become the strategic medium for us.  Its the

place we go first when were looking at medium investments, in fact, in

many countries the Internet is the only medium we employ.  Thats quite a

difference from four years  ago.  In addition to being centered as our

business strategy, the web provides us with an audience that is

pre-qualified.  The people that use the web are on the cutting edge of

technology and they tend to be younger, which is important to us because

we want to make sure we engage not only with people who make decisions to

day, but people who are going to control our future.  We see the web as an

important marketing and market prep medium.  Were focused on many issues.

We are a major supporter of the media, but were not Pollyannas.  We

recognize that there a number of challenges that exist.  Theres a wide

range of them, but what were focused on include measurement and

accountability.  This medium does take up a significant piece of our

budget.  We have to make sure that its working effectively for us.  We

recognized early on that the Internet provides with the opportunity to

have the most effective share of voice or presence in a medium relative to

any other medium choices.  So for relatively modest out of pocket

investment, we were able to capture a share of voice and presence that was

unachievable in any other medium.  As such, we really wanted to make sure

that we capitalized that and we developed pervasive presence.  But being

accountable for that is critical to us and its really on our mind, and I

believe the second area is one of really pushing the creative and

technical envelope and making sure we are giving users more control, more

choice, more interest opportunities to also have utility and transact

through our marketing and advertising messages.

Host:

         You hit on some of the issues that this room deals with a lot and

it kind of tackles those right up front.  Lets talk about measurement and

accountability and tractability.  When this thing started in 94 and 95, a

lot of you guys were experimenting, lets try this and try that, now youre

into borderline, at least from a media company standpoint, borderline

serious money.  What are you look for in response from a measurability,

accountability, and tractability standpoint?

Mary Ann:

         We want to know more and more about whose using the web.  Were

obviously the issue of putting your messages out there and getting page

impressions or even visits is small comfort.  Theyre numbers but they dont

tell us an awful lot.  Really understanding whats behind those numbers and

being able to measure what the reaction is to our communication, so were

in addition to working towards a supportive third party measurement which

is pretty basic.  Were also developing our own ad serving capability so

were in total control instead of relying on other people to tell us what

our numbers are.  Also, were investing an awful lot in what I call more

qualitative research.  Were actually going online as part of our marketing

if you will, even before we start some of our programs and ask people what

their expectations might be.  This is particularly true when we invest in

a sponsorship or a very significant presence on a site.  We want to make

sure that we have a read on what people are thinking about IBM, what their

expectations for the site might be, what their expectations for the

communications might be.  We measure pre and post what the results are.

Were really looking to a variety of traditional measurements, but using

the Internet.

Host:

         P&G, Youre into this interactive big time now.  What are you

looking for accountability?

Dennis:

         Many of the same things Mary Ann mentioned.  We want to be able to

do the kinds of things were used to doing.  We want to be able to track

first of all, the effectiveness of the creative in terms of its impact on

awareness and purchasing time.  We want to be able to track what happened

on the site.  Who are the users?  We are very interested, and weve shifted

from a click-through to a click-within thought process, where were very

interested in the degree engagingness that the add unit is having with the

consumer.  That tells a lot obviously about the creative, but also the

brand experience.  Wed like to ultimately track it all the way through

click-to-buy, and be able to know what our total value chain efficiency

is.  That in a strange way, would get us back to the very beginning with

Clod Hopkins, the father of modern day copywriting, who would take his

advertising messages door to door and wouldnt stop until he got ten out of

ten to buy.   In a way, weve come full circle.  Wed like to be able to

have those kind of measurements and obviously creative and business impact

measurements.  I think as I see some of the initiatives under way, were

gonna get there.  Theres a period that we need to be in right now of

experimentation.  We need to be flexible.  We need to hear the ideas and

the learning that the providers are having on what the users are doing and

experiencing and we need to be willing to experiment.  For us, its not so

much, lets drop the rules today, but its very much a learning experience.

Larry:

         I think at GM, we share what IBM and P&G are thinking and feeling.

We took an early lead and it was really because of forming a learning

organization early on and that was our big boss, Bill Gracio, whose the VP

of marketing and advertising for GM, had the concept of forming the

organization  The early days were looking at whats big and whats important

here.  One of the fairly simple observations was the mediums measurable

therefor lets measure it.  We began an assessment whats going on with site

based measurement as well as our own sites as well as media sites.  We

came to a conclusion that the only way we were really going to take what

was, in effect, a limited reach medium, and give ourselves some sensory

perception of audience exposure was in effect to build an ad server,

technology, and so we worked early on in creation of that ad sever

technology, and basically today from an ad model have an advertiser driven

method of getting an accurate count, as accurate as the technology will

give us, to account for cash and non cash impressions to drive a measure a

reach in frequency across the board.  We do that through a supplier that

maintains a proprietary database for us.  The supplier called match logic.

Host:

         Larry, you and I were talking earlier.  Someone counted URLs was

it fortune?  What was the statistic?

Larry:

         A little stat from my cyber workers.  How many pages in the May 11

issue of Fortune magazine, answer around 225.  How many URLs, answer,

around 212.  So basically, a URL per page.  A URL a page.  Ninety-five

percent of those URLs were advertising URLs and woven URLs within content.

Host:

         Heres a question of concept.  This medium in Fortune, youre not

looking for how many people saw this ad and then clicked on it.  Well keep

advertising in Fortune and kill those ads because they didnt work.  Is

this in this medium, were looking for click through, for real serious

accountability that its not just CPM not just a pile of people on TV which

is sort of old mode.  Are advertisers asking too much from this medium?

Mary Ann:

         I dont think so.  I think its a combination of not just the

transaction, but also the branding.  We value the medium as an effective

branding tool.  Right now, there are ways to measure whether or not its

working or not.  You have to invest in it.  You have to put the money

behind it, but there are certainly ways to do it.  It is the medium of

greatest promise when it comes to accountability.  Its up to us, the whole

industry, to make sure that we invest in it.  We do it early on.  We make

it something that is a priority now because otherwise, were not going to,

I mean technology companies and some of leading advertisers will support

it, but unless it becomes measurable, and its something that any company,

any market director can stand up in front of their chair person and say,

this is an effective and efficient use of our money, the medium is not

going to be successful.  Its really up to us to have high standards, but

to invest against those standards.  I think we can ask ??? if we dont put

the money down, its not going to happen. 

Larry:

         I think that from the automotive category itself, weve seen a

channel emerge here, or an engage of what well call the lower end of the

channel, the lower end of the funnel, if you look at awareness,

consideration, shopping preference, purchasing, over a span of months or

years as each of think of buying a car.  Not each of you think of that

every day, yet youre being exposed to our messaging and others in the

industry literally every day through television and the web.  This medium

is all about the ability to understand preferencing pattern and the

triggers by which you are ready to make that purchase and be able to

engage the lower end of the funnel that typically has happened in the past

at dealerships, franchises, and stores, are taking place on the web.  We

want to be able to measure all of that at the end of the day.

Host:

         That implies that it has to grow together.  The tracking

measurement has to grow as your ad allocation budget against it grows, is

that accurate?

Mary Anne:

         I think that you make an investment up front and making sure you

have the right system and methodologies and it doesn't necessarily have to

grow to proportion obviously.  You do need to do research, and I think

this is true an any medium, I think all of us know when youre investing in

a medium, a lot of people invest in creative, and they test creative every

which way from Sunday.  They dont invest enough in whether the medium

itself is delivering in a proprietary fashion, really understanding the

dynamics of your advertising in that particular environment.  I think in

this meeting, its particularly important to make those investments early

on, so you can make a base.  I see it as a priority for an industry thats

young and needs to continue to have advertising as a support.  We all as

major advertisers have committed to that.

Host:

         What do you see, things have changed a lot since, I can remember

back in 94 and 95, P&G, I know Dennis wasnt running this then, but

everything was click-through, thats how were gonna measure.  IBM was just

doing some RND and saying well, its just an early medium, and pretty much

everyone was nuts saying both.  Now were talking about pre-sophisticated

interactive ads, transactions, dadada.  What are you seeing thats working

for you right now?  Is it bare ads? Interactive ads?  What is it that you

really like? 

Larry:

         Ill just answer, and youll think Im working for P&G, but I sent a

kiss to mom a couple of days ago.  I love it.

Host:

         There goes Hallmark.

Dennis:

         Part of the measurement approach, and I said earlier, weve got to

be flexible, but the reason for the measurement and the reason for the

assessment, not only of the media aspect, but of the creative aspect, I

think is integral to the point I was making this morning about not

settling.  Its integral to measure to really understand the consumer

experience, to understand the edges of that envelope to push that out, to

understand what we can do in terms of creating that brand experience for

the consumer on the web, and knowing quantitatively what that is doing to

that brand, to their experience, and to your business results.

Measurement is not just a way to govern the interaction between

advertisers and providers.  Its a method of working as a community to make

this medium all that it can be.  Its just not settling.  Our point on

click-through was the best surrogate that we could figure out at the time

as new information comes through.  I mentioned click-within as a build on

that.  Were getting some great measurements on the Scope unit.  The active

engagement of the consumer and unit is incredibly important to us and

engaging to convey that.  Measurement, continual improvement, seeking for

breakthrough to drive the quality of the entire medium long term.

Host:

         Where do you weigh when you look at things like tide, when your

measuring this medium, do you look for, we sold this many boxes of it, or

people feel better about buying it?  Where do you draw the line?  Is that

part of the equation?

Dennis:

         Both, because youre evaluating where to be and what to say.  You

have to look at both.  For some whose business model is directly connected

to the purchase and the delivery which ours is starting to be in limited

places.  We dont have a lot of data, so were not at that point yet, where

we actually know, but were learning a lot.  For those who are already

connected from front to back, its a very precise science, and its also

still an art.  Both are important.  Creativity is going to be a major

determining factor in this medium.  Its not going to be the transparency

of information, so much as, the interactive capability, and how the

consumer gets that information thats going to be important.

Mary Ann:

         What weve found is that was our strategy, we want to be able to

enable ebusiness.  Whether thats on a banner, or whether thats in a

sponsorship, whether thats through an event, we want to make sure there is

some kind of a transaction or engagement.  In an ideal world, banners are

not dead.  If you make them smart, if you give people choices, if you give

them some control as to where theyre going to go, what kind of information

theyre going to get.  If you allow them to transact right on the banner,

making it very easy and accessible.  Thats valuable.  Were experimenting.

We found that events are very big for IBM.  Weve been in the events

business for quite a while and we know that as a medium, we had an recent

experience in Japan with the Olympics.  That website was phenomenal.  We

got more traffic than we ever anticipated.  Were predicting that come the

Sydney Olympics, the web is going to give broadcasters a run for their

money because its a medium where people are looking for results and

information and they need it now.  So when you have a time delay, when you

have the frustration of the broadcast not being on until prime time.  The

webs the place where people will go.  So certain kinds of events have been

very effective for us.  As sponsorships of certain kind of material that

are very very relavent.  I think the key word is relavency, and for us wed

like to see engagement and transaction.

Host:

         Lets talk about ebusiness.  It wont be the same as you define it,

maybe it will be the same as you define it.  This is not a plug, but I

have a new book coming out in December called Net Future, and were looking

at the cyber trends that are chaning everything and when you tie this

together, what youre doing is and we look dynamically in different markets

here.  This is the advertising marking market, but were getting closer to

linking everything through the back end.  When you have a main street

economy happening, you have a wired work force through intranets.  Youve

got now extranets wiring distributors, and then youve got real time

education happening, and youve got people connected.  At some point, you

guys have a marketing message that you hit.  In the future, in the car

business, hypothetically, someone is researching buying a car.  What youre

finding out in real time is in that geography the demand is different than

your six months ago production was planning on making, so youre actually

starting to use real time data, and you actually build and manufacture

really just in time, not just the old fashion just in time.  Its really

just the demand driving the supply versus the other way around.  What do

see, in terms of this is not traditional advertising because we could not

do this before and I look at ebusiness as that whole end to end thing.  Is

that how you look at it and if so where does advertising go in terms of

real measurement in this arena?

Mary Ann:

         Clearly, the end to end process is ultimately what ebusiness is

and will be about, and the impact is going to be making sure that your

product development, that your manufacturing, that everything is some how

tied into your up front marketing which in some companies is does exist

and in some companies its not as tightly woven.  I think the challenge is

to make sure that we are getting all of this information and using it

properly.  The key to this meeting is that there is a lot of data, but

making sure that it is really funneled properly and in a timely fashion so

all the other pieces of the organization can use it, so that we can really

capitalize on the ebusiness opportunity.

Host:

         When that happens, what happens to things like CPM?  You may not

care about those kinds of things, you may actually care about you created

production efficiencies and eliminated cost in the channel.

Mary Ann:

         Exactly, youre going to have to weigh all of those measures.  Its

going to be a lot more sophisticated and a lot more complex.

Host:

         So who will do that?

Mary Ann:

         Well, its still going to be a marketing function at the front end,

but its going to have to be integrated and connected with all of the other

pieces of the organization.

Host:

         Well three people out there ???.   You have cars.

Larry:

         Yeah, we have cars.  If you look at the opportunity.  This is a

personal observation.  I was having a discussion the other day with [Karl

Goofynuts?] CEO of Thunderhouse, and we were talking market numbers.  Now

lets just say for a moment that the value of the advertising is roughly a

billion.  Putting that in context thats against 170 billion in terms of an

overall marketing effort in the US.  If you say that its growing and some

estimates say 6 billion, keep in mind thats probably against 200 billion

when we get to 6 billion.  In the relative scheme of things, its growing,

but it may not be growing to take over what was the 170 billion.  The

other area that seems important to look, if the department of commerce

says three hundred billion in ecommerce.  Thats the other end of the

funnel that revolves around shopping and purchase.  Traditionally, things

that advertising has focused on to a certain extent but not all the way.

Weve left the art of persuasive salesmanship to the last mile in the

funnel.  Its still going to valuable in our business to have those

infrastructures in place, but whats really important is that youre going

to have to translate a lot of that into the electrosphere.  That means you

are going to have to have execution programs around content and creative

and many of those thing may be steeped within media itself, be they on TV

or websites.  Its almost like you cant look at the vertical growth of

advertising on the internet, but the application of creative practices and

marketing practices as you move horizontally as you move these value

chains online.

Dennis:

         Youve got the scenario, the outline describes the consumers

experience within the brand as they move through the decision making

process and a brand experience process.  The web is going to give the

opportunity to severely alter the value chains of a lot of businesses.

Within that world you are going to have a lot of real people who are being

born, who are growing up, who entering market categories for the first

time and the operative job of consumer awareness and new customer

acquisition is still going to happen.  We cant confuse those things.  As

we get into that world, even the totally electrified business model is

still gonna reacquire the acquisition job.  Tim Demello from Streamline

will tell you its very difficult to acquire consumers to come on to his

system.  Theyre doing it, but it doesnt just happen.  Once they are

on-line, you are still marketing because the actual experience of using

the service, the experience of having you photos developed on line and

selecting the ones you want, instead of throwing out double copies of all

the bad shots.  Thats a real benefit that you experience and drives your

loyalty to that service.  Getting a Crest toothbrush in the mail every

three months the way ADA recommends is a benefit.  Its a decision we make

for the consumer in the Dont run out program.  That is an example of how

it is an on going marketing process of cross selling and raising of the

standard, but he still has to acquire consumers.  Marketing still remains

a profound function in the business that has to be performed, its not

going to go away.

Host:

         In the future, which is of higher value to you, is it the

aggregation of product, or the aggregation of customer?  Where do center

your focus?

Dennis:

         We always start with the consumer.  How our categories and the new

categories we plan to get into down the track mix and match in terms of

product overlap versus product experience overlap.  I cant predict, but I

think were going to want to start from the consumer and the roles they

have in terms of their beauty care, their child care, their household

replenishment.  Were going to have to start with the task  and with the

consumer expectation.

Mary Ann:

         I cant think of a business that wouldnt start with the consumer

when you focus.

Host:

         A few years ago when media was acquired, you all would not have to

been highly technical.  We now have pretty sophisticated stuff.  We have

the head of advertising using a mouse.  This is innovative.  Were moving

to the technology being much more involved.  What has that done for your

organizations for skill sets that youve required, and how do you have to

look at things differently because of technology, if at all?

Mary Ann:

         You have to find people who are comfortable with technology.  From

the advertising side, you dont need someone who is an absent technician

who really knows all the speeds and feed etc, but you do need someone who

has a good appreciation for it and understands it, include being in a

company like IBM, it sort of just seeps into you no matter what your role,

not to say you become a technology, but you become very comfortable with

it.  Very importantly, you need someone who is a good marketer, who

understands all the fundamental marketing principles, and is comfortable

with both of those areas, and thats a tough mix, so if I had my pick, Id

pick someone who is a smart market because I think they can learn the

technology side of it, but I dont think its as intuitive the other way

around.

Host:

         Dennis, I meant that positively that you are using a mouse, not

negatively.  Thats a real statement.  There are CEOs that the higher you

go in the large company, present company excluded, the less people that

use technology personally.  In a lot of this, the next generation is

coming in, and basically a lot of those people will fall off and then the

generation thats wired will take over, and its like of course well do it

totally differently.  So to your credit, how do instill that deep?.  You

didnt have to do this a few years ago.

Dennis:

         In my case, eighteen months ago, I was in China, and I had only

been using email for eighteen months.  When I arrived in the US, it was a

major, I mean, I knew all the figures and all the statistics about the

web, but just personally experience and watching it flow into the daily

life of my four kids, watching it flow into our business, our customers

business, our consumers lives has been nothing short of unbelievable, and

there are days when I feel like the man from Jumanji.  Its not that

complicated.  If youre really interested in consumers, and youre really

interested in what theyre doing and why theyre doing things.  I think its

a natural flow to get into this and to have a curiosity about it.  It has

had, it has and it will have a profound effect on organizations.  Last

summer, we had a bunch of summer interns, who worked for P&G during the

summer, and we saw a huge difference between the undergraduates and MBAs.

The undergrads being even more competent with the technology than the MBAs

in terms of being just four years or five years younger.  We asked them to

look at our strategies, and tell what they think we should do, and they

made a presentation in a room about like this full, and it was a great

line because they made point that the web is not just a medium, its not

just a channel, its not just an experience, but its actually an organizing

principle.  They made the point, if the web is so important to P&G, why

are a bunch of summer interns asked to do our strategy.  They had some

absolutely fabulous ideas which weve implemented literally every single

one of them, and were doing it again.  The flow through that were seeing

is influencing how were doing consumer research, how were developing

product technologies by getting scientists and marketing people to

collaborate real time.  Its affecting organization structure, its

affecting innovation process, its affecting recruiting, and its affecting

company culture.  Its opening up the company culture.  We used to be a

need to know culture, highly confidential, and were gradually, but most

certainly moving to a open architecture kind of environment when

information is being used for competitive advantage.  You got to be

curious, youve got to be consumer centric, youve got to be practical, and

do whats right.

Host:

         We had the presidents of the six search engines here yesterday.

Seventy percent plus of people use search engines.  We dont know where the

other thirty percent find anything.  They were saying that the hockey

stick going up hasnt really occurred yet.  They are positioning themselves

to be the new media companies.  Now we have a lot of old media companies

here, or least there not the new ones.  How do look those as a media

placement, and what do you think of context in this environment.  Context

of information, magazine, versus context of simply trying to get people in

this electronic environment?

Mary Ann:

         I think again it gets back to the word relevance.  If you offer

information that theyre looking for at that time and its relevant, then

people are going to value it, assuming its good.  The search engines do

have the benefit of the fact that people go there to search for relevant

information, so that they can aggregate content thats meets those peoples

needs, then theyll be successful.  From that perspective, I do see them as

the new media companies, but thats not to say that theyre the only media

companies.

Host:

         A search engine that just does search.  Is there a market for

that?

Mary Ann:

         If theyre providing good search, absolutely, because its relevant.

If people are looking for something, and Ive got a message to connect them

to what theyre looking for.  I know Ill be successful.  Weve seen that

time and time again.  If buy the right key words and weve got the right

message.  We see the transactions moving, and we know that it can work.

Larry:

         Well, there are obviously great aggregation points.  They are the

portals.  Theyre a point where people gather.  Mary Ann mentioned events

earlier.  Events have worked for us too.  Any place where the audience are

pooling, there is going to be some opportunity.  It just so happens that

search is kind of perfect because of the fact that you have instant

targetability because of keyword.  I think you have to be careful what you

are doing with keyword.  Ive heard horror stories in that field.

Host:

         Like what?

Larry:

         Well lets see, I had dinner last night with one of our folks in

the industry who was buying competitive keywords and happen to buy one of

the competitive brand names that when input in a search engine result in a

pornographic references coming up.  It wasnt something they wanted to use

in terms of affiliating there brands.

Host:

         What do you think of the community type of environment?  We have a

lot of those now, but why do have more than auction sites now?  How do you

view those as target markets now?

Larry:

         Ill take a stab at it.  This is my own personal view of the future

is that the community building aspect signals that the consumers taking

control even more.  Communities will determine and place the filters in

front of themselves and those who wish to provide goods and services to

them.  Theyll be the determinates.  Theyll have some time to evolve, but

communities are really important piece of the web.

Host:

         How do you deal with a community who says Im a going to be the

aggregator of my information and I will ultimately select my advertising

set?  How do you position against that?

Larry:

         We havent really encountered to much of that yet, but my own

personal belief is that you have to understand the needs, wants, and

desires of that community, and figure out if youve got products to match

that and then figure out a way to communicate that to the consumer.

Theyll find you if youve got what they want.

Dennis:

         I think its a very positive development.  Not only does it

aggregate and build around common consumer needs and consumer issues, but

as Larry said, Theyll come to you if you got what they want.  For a

company the invests heavily in research and development and tries to have

leading edge products.  Being in that position and make that connection

and to have a kind of transparency of information.  It can make a big

brand over night and can kill you if you dont deliver over night, but

based a strong armed d background to what were doing.  Were going to find

those to be very very productive for our company.

Mary Ann:

         I would add that I think the other benefit of community is that by

participating in a community as an advertiser or a marketer.  Youre really

sending a very strong message and saying to that community, "Youre very

important to me, I want your business."  Its very targeted.  Youre there

because they are who they are.  Youre not just hitting them as a shot in

the dark approach.  Its a very strong and powerful message especially if

your communication is targeted to their needs and really reflects the

community.

Host:

         How do you keep your collective thinking moving towards this

medium.  All of your companies thinking as evolved a lot in the last few

years.  How do you keep that going?  At some point you have to processize

this and put it into five year plans.  How do you keep it as fresh as the

environment is?

Larry:

         I think the environment tends to keep it fresh in it of itself.

When we look at our industry directly, there are industry sources out

there and figures that are fairly credible at this point that say that in

1997, thirteen percent of all automotive shopping transactions occurred on

the web.  Projections say by folks like JD Powers and so on, that this is

moving anywhere to 34 percent on up of the entire annual vehicle sales

would take place in some form or fashion using the web as a key

determinant.  Those are things that you really cant ignore.  At the same

time, once you get critical mass at an organization and youve got a whole

bunch of people talking the subject, it feeds on itself, it rejuvenates

itself.  Our brand system today literally takes new media in the broadest

definition of the term and places it right within the brand level and then

that extends all the way through the chain even up to our dealers who get

involved.

Mary Ann:

         We keep it fresh by knowing that anything that we put down today

is going to change tomorrow.  Its an enormous amount of flexibility.

Also, its never definitive.  Youre always learning something and the world

is always changing, so it really keeps you searching for the best

information.  It think sharing information not just within the company,

but with other companies with colleagues in other industries is extremely

valuable, sessions like this are valuable.  You need to keep learning and

asking questions.

Host:

         You all have incredibly strong brands.  What risks does this

environment pose to you as you move forward with your brands?

Dennis:

         I think the biggest risk is the restructuring of business models,

the redoing of value chains by different players who are peripheral or

adjacent or even coming from left field in your business, and who have a

different paradigm and a different belief system about how the business

work, and who therefore you would be tempted to ignore at least in the

early days.  The time zones in this medium, whether theyre dog ears or

half dog ears.  Everything happens so fast and can get iterated so

quickly, that to me is the biggest risk.

Mary Ann:

         The risk for a technology company in this medium is when a

technology doesnt work or people are frustrated by the technology.  People

get frustrated because they cant download something because they dont have

the bandwidth and the capability, but were trying to push the envelope

from the creative point of view in offering all of these alternatives out

there.   The way we try to balance it is that we have enough presence out

there that we are going to frustrate some people who dont have the

bandwidth or capability, but were really going to engage people who do

have it, so we have a mix.  All of our communication is not at the highest

level, we have some fundamental stuff out there to make sure that the guy

who doesnt have the bandwidth can receive it and get the messages.  That

is a risk for us, and peoples interpretation whenever they see an IBM

message on a site, if that site doesnt perform, they might think that it

happens to be an IBM site powered by IBM, where the technology

underpinning is IBM, and thats not always the case because we participate

in many different sites where we are not the technology provider.

Larry:

         I think the only risk we have is rushing too soon to stabilize

business models.  Especially as advertisers and as media industry.  We

have to get some stable base to work on, but Dennis even mentioned as a

core theme of his speech, moving beyond the banner.  We cant be too quick

to try to package things up and say there Im done.  Number 1, the

technology doesnt allow us to do that anyway, and so therefore why fight

it.  Number 2, it doesnt make much sense, because were not there yet.

Host:

         Were dealing at this conference a lot with connecting a lot of the

technology, the marketing, the advertising, the placement, all of these

components because they are coming together.  There is a lot of innovation

in this room of companies as well as many other places in the world.  They

have innovative technologies that would be unbelievable for companies like

yours or brands like yours.  How do they get through all of the walls of

the company for someone to say, "GEE, This is AWESOME!" ?  Whats the

mechanism?

Dennis:

         The first mechanism is that our organization has to be extremely

focused, has to be out meeting, listening, sensing the marketplace for

these kinds of opportunities.  People come to us.  We had an interesting

experience in March.  We had an information technology fair, where we

invited a bunch of these young startups, MIT media labs.

Host:

         How did you pick who to invite?

Dennis:

         We just, from the contacts, the people who came to see us, the

contacts we have.  Just inviting people in and listening to what they have

to say.  Its not rocket science.

Larry:

         Our process is really at the brand level.  The advantage that

anybody has with good ideas is that there are a number of eyes and ears

that can hear of them.  We have within GMCyberworks today a focused

process that is shared research and learning that includes our alliance

with the MIT media lab all the way through to our own new media lab that

is in effect is a place where technologies are shown to our brand teams.

Mary Ann:

         At IBM, almost every employee has a stake in the internet and is

open to ideas and opportunities and often times, what happens is that

people who are in very distinct areas of the business, manufacturing or on

the sales side we get a lot of people who say Ive got this great company

that you really need to meet with.  It does filter through the company.

Many people will come to the marketing organization directly and through

our agency which we rely very heavily on.  Its making sure that we are all

accessible in one form.  The most direct way email.  I just find that to

be if you have a really good idea, you know, splash in an email to us, and

then there'll be follow up, but thats probably the most direct way.