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High-level media and advertising executives are to meet for a brainstorming session aimed at capitalising on the surging popularity of social networking websites.
McKinsey, the management consultancy, is understood to have asked senior executives from old and new media groups alike – from Yahoo to YouTube – to a session with advertising agencies to discuss ways of turning the hugely popular internet sites containing photos, videos, blogs and other user-generated content into viable media businesses.
The meeting, which could take place in New York within the next month but no date has been finalised.
Plans for the meeting reflect the rapid shifts felt by the media industry as people, particularly younger internet users, spend increasing amounts of time on social networking sites such as MySpace and sharing photos, videos and blogs created by themselves rather than professionally produced content.
In addition, the growth in high-speed internet connections has led to a sharp increase in video viewing on the web. Content from movie studios and television networks is increasingly available online.
So far, advertising linked to online video is estimated to be worth about $300m but this is expected to grow to $1bn within the next few years, according to Merrill Lynch. Of the record $12.5bn spent on internet advertising last year, most of it was spent on search and this remains the biggest source of online ad revenue.
“Advertisers are looking for leadership on how to find ways of reaching the growing audience for user-generated content,” said Aaron Cohen, chief executive of Bolt Media, who is involved in the meeting plans.
The Interactive Advertising Board will be asked to attend the meeting. One of the subjects that could be discussed is whether certain standards should be developed for user-generated content, such as always ensuring that content with ads has been deemed appropriate.
Most online video advertising is linked to professionally produced content, reflecting concerns that home-made content could be inappropriate or offensive.
However, technological advances are making it easier to insert video ads into online content.
The focus of large media companies on ways to attract advertisers to the web is expected to push this area. “Video [on the web] is a big deal,” said Jonathan Miller, chief executive of AOL, last week.