The iMedia Brand Summit opens with a shot across online publishers’ bows and plenty of discussion about how brands can leverage new personal media.

Yesterday was unseasonably cool here on Florida’s Gulf coast, but things got hot bright and early today, thanks to Grad Conn, managing director for Grey Direct in Toronto. The theme of this event is empowering the consumer, which is good news and bad news for publishers.

Conn told the opening session of the iMedia Summit in Bonita Springs, Fla., that CPG firms have been quietly using more and more CRM to amass huge online direct marketing pools, thanks to television’s newfound inability to aggregate an audience. In addition, firms like Procter & Gamble, Starbucks and Pedigree are weaving themselves into viral communities, blogs and other new ways to interact online.

All that poses a significant threat to online publishers—a CPG brand only has to get a consumer to opt-in once via a publisher’s site.

“When CPGs buy online, they’re harvesting users—then they don’t need to go back again. They push them into retention programs. What the CPG industry is doing has been under the radar… by the time you get there, they will already have been there littering the landscape,” Conn said. 

Mass media fragmentation launched CPG’s search for the next big thing, and they’ve found it in community, CRM and direct marketing.

“Mass marketing is under siege,” Conn said. “In 1965 you could reach 80 percent of customers with three TV spots. Now you need 117, and no one can afford that. The net impact is that you’re not reaching as many people. CPGs are finding TV to be less efficient, and they’re really worried. They need a new route to market.”

That new route leads straight through the wacky world of bloggers and peer-to-peer players, who link each other into impressively effective informal networks. It doesn’t take deep thought to realize how effectively viral that can be, and how it bypasses publishers completely. Outside the blog bog, there’s a whole world of sites like Friendster, Orkut and Kazaa. Not to mention advergaming, multimedia messaging, IM and the Skype peer-to-peer telephony model—anything that creates a non-advertising network.

“Consumers don’t like to be ‘sticky eyeballs.’ They’re becoming less passive and more active,” Conn said. “Only 14 percent believe information from advertisers and the government. Ninety percent believe information from friends. It’s an information-glutted society. You can’t trust the broadcasters, but you trust the re-broadcasters. It’s all about personal recommendations.”

Is it any wonder, then, that CPGs see these viral communities as the Yellow Brick Road to a better bottom line? And it doesn’t matter to them whether they create the community or tap into an existing viral stream. When they target high-consumption household denizens online, it’s all good for sales and not good for publishers—unless publishers find a way to play along.

“It’s no longer marketing to a consumer, it’s marketing with a consumer. You have to have a relationship,” Conn said. He cited Pedigree’s “New Puppy” program as a good example. Pedigree doesn’t actively try to sell members anything, but instead sends out a regular email newsletter about how to care for that new puppy.

Viral word of mouth (WOM) communities are especially hot for reaching younger customers, Conn said. P&G’s Tremor is an excellent example—it has more than 300,000 teen connectors already. Other similar CRM databases are positively staggering in their magnitude—IAMS has more than 40 million names in the United States and P&G has more than 385 million names in Europe.

So back to the publisher problem. “CPGs are using you to bootstrap them, then the communities grow on their own. They don’t need to spend it with you anymore,” Conn said.

The secret to successfully playing catch up is in three other letters: CPA, or cost per acquisition. Is there a way for publishing to become more CPA-friendly, he asked? Conn says he has clients who simply cannot buy enough CPA impressions to make putting cash into online a worthwhile effort. In addition, he says, online publishers have to be able to give CPG advertisers more psychological demographics about the people who come to their sites.

The other way to compete is to fight fire with fire—and that’s a huge opportunity for publishers. “I’m surprised none of the big properties have tried to create their own viral networks to create a CPA-based model for marketers,” Conn said. “If you can get users to contribute content, you can have a psychologically targeted group.”

And publishers will have a chance to avoid being left out in the cold.

If You Can’t Stand the Heat, Get Into the Kitchen

Jeff Cole, who heads UCLA’s landmark World Internet Project, told the summit that one of the biggest changes in year four of the project is that family computers are migrating into the kitchen.

“When people have had broadband more than two years,” Cole said, “the PC tended to migrate from the den or the bedroom to the kitchen—the most humanly networked room in the house.

The always-on functionality turned out to be far more important than the speed. Where marketing and advertising is concerned, that’s a unique opportunity to reach people right where they can use information.”

The latest report, which will be released next month, also shows people are over their initial discomfort about using the Internet. They have realized that “a misstep online doesn’t mean they’re going to blow up their computer, their neighborhood or their country. Most things can be done remarkably simply, and people are figuring that out quickly. Nothing is more simple than TV, but this isn’t far behind,” Cole said.

Not Dodging the Issue at Hand

Bonita Stewart, Daimler Chrysler’s director of brand communications, spoke with Editor-at-Large Joseph Jaffe about the role of online in growing the automaker’s business. She made several comments that I think point to interactive marketing doing what iMedia President Rick Parkhill called, “taking a seat at the grown-up table.”

When the company launches a new Jeep, Chrysler or Dodge model, “instead of starting with the traditional launch, we start on the Internet first. We’re not running scared [of the Web], we’re taking the intelligence from the medium. We have information on which of the models are going to be selling, we know which colors customers will want,” she said. “It’s up to us as marketers to take that info and work it into our overall media plans.”

And the key to selling interactive throughout the company, she said, was that they spent several years building a rock-solid infrastructure that simplifies data collection, which offers total accountability.

She’s also eagerly awaiting the next big thing online—and it isn’t 30- or even 15-second TV spots translated for the Web. “There’s an e-commercial coming. I’m not quite sure what it will comprise, but I’m sure it will be quite powerful. It will provide invaluable info about the consumer. The technology is available, now it’s getting the creative juices flowing… actually developing a commercial that is for the Web. If you think of radio, there’s a certain way you approach it. I just think there’s another level [on the Internet].”

And More…

The rest of the morning featured a Creative Showcase with Jaffe and Visa’s John Raj, Denise Garcia’s look at what GartnerG2 has discovered about personalization and customization, and ING Direct CMO Dave Lewis explaining how the company built the country’s fastest growing bank from scratch—and online—and how CRM drives ING’s growth.

More on that when I get back… and more from here tomorrow.