iMedia Brand Summit opens with what works, what is broken and what needs to happen to bring it all together.

If there is one word to sum up on- and off-stage discussions at the first day of the iMedia Brand Summit in Deer Valley, Utah, this week, that word is integration.

AOL Chairman and CEO Jonathan Miller  -- interviewed by marketing consultant Neil Perry in front of a packed audience of nearly 400 of today’s brightest and most influential brand marketers -- discussed AOL’s growing pains. He focused on those trials of evolving the company that originally made a name for itself by making the Internet easy for everyone to get on to via a simple telephone cord, to the broadband world and what that demands of AOL in terms of content and programming.

“It’s a great market,” Miller said. “There is a long-term shift going on. We’re just getting started. The mistake would be to assume that just because we have the wind at our back everything is going to fall into place.”

The challenge for the company, Miller said, is to make AOL a “much better place to advertise.” He said that buying performance-based leader Advertising.com earlier this year was a step in that direction. Miller admitted that AOL to date has not been very successful in sufficiently utilizing its inventory and Advertising.com “has the systems in place to help us do that.” Additionally, broadband is great for advertisers, he said.

Inventory aside, it’s all about content, Miller said, explaining that AOL.com “has to be a great destination so people want to go to the site.” To that end, one of the things that AOL focused on in the last year is “getting pretty good at programming content.

“Our programming numbers have really taken off,” he said. “We’re now a programming-rich environment and a brand-rich environment. We have a lot of assets we can mine better,” he added, with the caveat that AOL is in the phase of “building the real thing, but we can’t take it for granted.”

Content is the primary asset, he said, as people are not paying subscription fees for content today, but “in the future they will be.”

Another asset is AOL’s Instant Messenger -- an “extraordinary medium” and a “true phenomenon.” Citing his son as an example of a typical AIM user who regularly has multiple simultaneous AIM conversations with friends, Miller said, “The phone is a boring device right now in the home environment because you can only talk to one person at a time -- who would want to do that?”

However, he said, older people are also starting to adopt instant messaging in significant numbers. “Integrated marketing -- that’s what people are doing now -- looking at all those screens simultaneously.”

AOL’s future? Miller predicts that broadband penetration will be the first tipping point followed by wireless devices, which will skyrocket. Integrating all the pieces is where the opportunity lies. “The real growth is in the always-on, always-with-you environment. We’ve only just begun -- all of us.”

Real integration

Continuing on the theme of integration, a duo of experts from the Cendant Car Rental Group and Mitsubishi Motors answered a few “from the trenches” questions.

One thing the panel made clear by the panel from the start is that integration is not about slapping a URL into a TV ad. Scott Deaver, EVP of marketing at Cendant, said, “People graze across media. Most marketers are not recognizing that. It’s not just a marketing or a communication strategy. It’s channel strategy.”

Speaking of channels, Mitsubishi's SVP Ian Beavis was treated to a round of appreciative applause after revealing that Mitsubishi, which used to spend 75 percent of its media budget on network television, this year has reallocated those $120 million. “We don’t need to be in network television," he said, “but we do need to be on cable television; we need to be online.”

In contrast, Deaver said that Cendant will continue spending on network television because “it works,” but quickly added that the second biggest slice of the company’s media pie goes to online because, “I can trace the online ad all the way to revenue.”

As to who’s responsible for integration, both panelists agreed that real integration happens on the management level of the client side and “the smaller your budget, the more important integration is.”

Media is broken and must be fixed

If all that wasn’t enough to think about, the last speaker of the day was Northwestern University professor Don Schultz, Ph.D., who asked the audience to throw out old notions and completely rethink how media advertising works.

The basic premise of Schultz’s presentation: Most, if not all of our media advertising models are “broken,” or even worse, irrelevant, in the 21st Century marketplace. “We have no proof about how media advertising works, with the exception of online,” he said. “We hypothesize that television works; we hypothesize that magazines work … but we don’t know.”

Schultz went on to posit that some of the oldest marketing principles are fatally flawed, starting with the 4Ps of marketing (product, price, place, promotion) -- a concept developed in 1957. He went on to dispel the mythical power of customer relations management (CRM) as a joke -- “You can’t manage customers. It’s like herding cats.”

Another erroneous assumption marketers fall prey to, according to Schultz, is that each medium works separately and independently of any other and therefore should be planned and measured separately and independently.

“I am terribly concerned how successful we’re going to be with these models,” he said, adding that marketers outside the U.S., specifically in China, have a huge advantage over the United States because they think of media holistically as opposed to sorting them into silos and, “They don’t have the historical baggage that we’re bringing to these things. Our media systems are based on still unproved hypotheses.”

To a wave of several hundred heads nodding in agreement, Schultz continued to stress that marketers have to adjust to a multimedia world where information overload forces consumers to extend, expand and change their media usage. “Consumers have figured out how to use multimedia,” he posited. “They take it all together. They don’t say, ‘I really like your media advertising, but I thought your PR really sucked.’”

Simultaneous media usage research, in Schultz’s view, challenges almost every media information and planning model currently in use and “there is no media synergy measurement anywhere in our media planning models.”

In summary, Schultz offered the following:

•  Today, media advertising likely works based on consumer media consumption, not on advertiser/marketer message distribution.
  
  
• Our media planning models need to be re-thought, revised and revamped to deal with consumer simultaneous media consumption.
  
  
• New media measurement systems are needed.
  
  
• Media pricing models need to be re-visited as advertisers currently assume they’re buying a specific audience, when in reality they’re only getting a part of that audience, with the rest lost to other media consumers use simultaneously.

“The difference is not how many messages you send out … it’s how much media is consumed by consumers,” Schultz said. “Our media planning, measurement and evaluation models are broken and they must be fixed.”

The iMedia Brand Summit continues Tuesday with discussions on proof that online marketing drives offline sales, a creative showcase presented by industry pundit and iMedia editor-at-large Joseph Jaffe, a keynote presentation by Odyssey’s managing director Sean Baenen and a set of breakout sessions on CRM, emerging media, user experience and social networking.