The Vice President, Director of Media for Modem Media gives her perspective on the medium's potential and what it will take to increase online ad buying.

Sharon Katz is one of the world's leading experts on Interactive Media. As Vice President, Director of Media for Modem Media, she sets the department's overall strategic vision and direction, identifies Interactive Media trends, and provides industry stewardship. She has overall responsibility for what is now one of the world's largest full service interactive media departments. In addition, Katz holds the distinction as being one of the first Web-based media purchasers in the industry, and led the effort on the first industry insertion order. She also is active in industry organizations, working to help further the industry. We talked to Katz about the medium's potential and what it will take to increase online ad buying.

iMedia Connection: The industry has identified a chasm between Internet media consumption and marketers' investments in interactive advertising. Why aren't advertisers following consumer media consumption?

Katz: At this point it's really because they haven't been able to quantify return on investment. Even though they're not direct marketers that are going to attribute actions to sales, the brand advertisers are still used to advertising in TV and knowing how many GRPs are going to move so much product off the shelf. Even though it's a brand medium, they know they're going to spend a couple of million dollars in primetime TV and people are going to buy this many candy bars because it's something they've benchmarked for years and years. And in this medium there are no benchmarks yet because the medium is still too new. So it's a risky proposition for a brand manager to say, "How do I go ahead and take money out of something that I know works to try something new?" And especially in a downed economy, I think people are still scared.

iMedia Connection: How do we get over that? What is it going to take?

Katz: It's going to be benchmarking and research. It's going to be working together with the media properties and research companies to start to put together not just run-of programs but benchmarks for brand awareness and things like brand awareness studies and brand impact studies to be able to measure campaigns as they go along to prove success.

iMedia Connection: As an agency, what are some of the actions you're taking with your clients to help them move into this space?

Katz: We are actually doing research on everything we do. So if it's a direct marketing campaign, we're able to attribute banners by creative sale. If it's not, and it's more of a brand awareness campaign, we are doing a preview before the advertising goes live and doing a couple of waves of measurement during the campaign as opposed to after, combined with site activity reports and understanding what site activity means high value customers and all that kind of stuff. We're not just spending money for the sake of spending money -- we're at least able to start and say, "What does this mean and how can we prove success?"

iMedia Connection: As an industry, what needs to be done to help you sell interactive to marketers?

Katz: More sharing of information. There has been a lack of public case studies, of what has worked and what hasn't worked. There has also been a lack of help from our media partners as well to invest the money in terms of research to say what will work and what doesn't work. And then the metrics from a cost perspective have to work, too. The problem is the CPMs are still really high in the industry and we're trying to figure out what's the right cost-per and make sure this is a measurable medium and it fits within the equation of what works for our clients. You add in the CPMs, you add in the agency fees, you add in the fees for ad service and the fees to track it and it becomes a really expensive proposition for clients to get involved. So we all have to figure out as an industry a way to become more efficient so media properties can still make money but not have to charge such high CPMs to do that.

iMedia Connection: What are clients' expectations related to online? What are the biggest challenges in managing their expectations?

Katz: Their expectations at this point are that they're going to learn something, and it's really frustrating when they can't learn. Like if something comes into play in terms of tracking and they can't really learn what they want to learn about it. The best way we've been able to manage their expectations is to communicate that this is still a new and growing medium at this time and it's not perfect. There's always a problem when a campaign goes live and they're not used to that with TV, print and radio. With this medium the process isn't going to go smooth and it may be long, and all that, so we kind of walk them through it, communicating that it's really not turnkey or easy to execute.

iMedia Connection: In general, what types of advertising are you finding most successful for your clients? What's working?

Katz: What's working is when it's truly interactive advertising, when it becomes more of a product or service vs. just a one-way communication. So for Delta Airlines, for example, a visitor can click on a banner and get a great fare sale or be offered the opportunity right there to either price an itinerary within the banner space or to reserve the ticket. It's about offering a service back to the consumer vs. just a message.

iMedia Connection: What are your thoughts on the medium as a branding medium?

Katz: I think it works as a branding medium but you have to define branding in a different way than you do on TV. I think branding on TV is all about sight, sound and motion and branding in interactive is about experience. And the more you can get people to experience the brand -- they're spending 20 minutes in the applet you've created or the service you've provided -- that's a brand experience that's different than TV. I'm not a big proponent of just putting your TV commercial on a Web site.

iMedia Connection: We recently did a poll on our site in which we identified the top 10 issues facing the industry and the issue voted as the number one issue is branding and how to measure it and so on. What are your suggestions for helping clients recognize the medium's potential for branding and how to measure branding?

Katz: The best thing is seeing results, case studies. They want to know that someone has done it and has done it great, especially if it's a competitor. Case studies are everything.

iMedia Connection: Any other thoughts you would like to share with marketers that you think they need to know to help them move into online or help them further their efforts?

Katz: The biggest keys are not just doing what you're doing offline online. Really think about interactive as a different medium and take advantage of what the medium has to offer instead of just plopping assets onto online -- that's not going to help move the medium forward.