One of the biggest challenges faced by agencies is how to grow and evolve right along with media, and this is where David Verklin, the chief executive officer of Carat North America and chairman of Carat Asia-Pacific, has made his mark. From his early days at Young & Rubicam to his stint as managing director of Hal Riney & Partners, Verklin has always been interested in finding unexpected ways not only to connect with consumers but to anticipate their needs and wants. After joining Carat in 1998, Verklin pushed the independent agency into email marketing, interactive television, event management and other nontraditional areas of media. In his new book, co-written with the late Bernice Kanner, Verklin describes some of these strategies to a non-media audience. The book, called “Watch This, Listen Up, Click Here: Inside the 300 Billion Dollar Business Behind the Media You Constantly Consume,” is aimed at giving consumers a look at how and why media decisions are made, and it forecasts upcoming trends in the business as well. Verklin recently sat down with Media Life for a wide-ranging chat covering the media economy, social networking, the future of the sitcom and the changing media landscape. Part one of the interview runs today; part two will run Thursday.

When you're talking to media buyers, what is the single most important trend you point out? The trend you think they should most be aware of?
 
I think the biggest trend is the vision of where I think the agency business is going, which is toward advertising to the interested. Where we’re moving is a place where you put dog food ads in front of people who own dogs. It’s an exciting idea.

If you think of Google and search, you type in the word “duck boot” and the L.L. Bean web site pops up. If you type in "cell phone," Motorola shows up. That goes from an interruption to being useful information.

Forty percent of America owns a dog. That means 60 percent of people seeing an ad for Iams just aren’t interested. If you don’t own a dog, great reason to turn the channel. If you’re the media buyer, you’d rather sell it to people who are interested.

What’s a really exciting trend is the technology that's taking us to places where PoliGrip ads are only in front of people with no teeth. I think that’s the single most important thing I point out to media people.

In the changing media landscape, as we see more targeted advertising, are advertisers becoming less fretful over content?
 
Well, if you think about it, with more target opportunities you’re able to be more cognizant of the content.

As an example, we just created a show called “Be Real” for Stoli vodka that runs on the gay-themed cable network Logo. That’s a really interesting example.

By there being more content niches, and super-concentrated, you’re able to decide if you’re in that or not.

So on the one hand yes, clients are being less fretful, they can be more selective, they can choose the content environments they’re a part of. 

Don Imus was pulled off the air. The final decision was made when sponsors didn’t want to be a part of it.

I have certainly seen no less concern by major advertisers by their comfort level about being in environments that are controversial, so in that sense, no, I think they are as fretful as ever, and they’re quick to pull out. In some cases our country has gotten more conservative than ever, but also we now have liquor advertising on television.

On the other hand, Imus shows how fast advertisers will pull out.
 

You talk much about user-generated content and about the rising power of the media consumer in your book. In this new world, where everyone has a voice, how will ideas be shaped and spread to and among the masses? If traditional media told people what to think, spreading ideas that way, how will opinion be shaped when the top-down model becomes outmoded?
 
I think user-created content is here to stay, and I think it’s going to continue to get bigger.

If you look at MySpace and Facebook, to share content virally is amazing. You see a video you like, next thing you know you send it to a buddy. The way content can spread is amazing.

Facebook right now has 27 million users, and a year ago it was 4 million. At that rate, Facebook adds 175,000 users a day. MySpace has about 105 million users.

Not all people understand these sites. Their ability to pass along and share content is increasing geometrically, so anyone who thinks this thing isn’t going to happen is sadly mistaken.

If you and I wanted to start a company together and create a user-generated company, we should maybe come up with a competitor to CNN, basically turn the population at large into a news-gathering device.

Think about Katrina. You could show stuff before anybody else. I’m convinced we’ve just begun to see what it can do, but the quality needs to get better. 
 

There's so much talk now about the weaker ad economy, following Robert Coen's revised forecast. Are you sensing a weaker ad economy, or are we simply at a pause point, so to speak?
 
I would say what Bob said was pretty expected and close to what we’re seeing.

I think you’re seeing in general a movement from legacy media to digital delivery media. I think part of the thing that’s driving this is transforming the media process toward spending money laterally. But it’s not at a one-to-one ratio. Instead we’re taking a dollar out of TV and putting 60 cents into the internet, so it’s slowing the growth of media generally.

Frankly, I thought his original numbers were the surprising numbers. It’s kind of a magic period right now.

What was it like between when radio was fading and TV was coming on board? Back then it probably was a period of years, but in this case it will be a year or two while we make this transition.

Now we’re just in the midst of a transition cycle. We’re moving to a 15-channel palette – TV, radio, newspapers, magazines and outdoor, plus search, online, sports entertainment, wireless, gaming, etc. It’s moving from a five- to 15-channel world.

I think the bleeding of the money from five to 15 takes little bit of time. Like a wave, it takes a while for it to reach the highest point of the beach. We’re just in the middle of it. It will take some time, but it will only be another 18 months or so before we see robust growth.