Old Media Rules

5:15 PM -- PALO ALTO, Calif. -- I'm at the 14th annual symposium put on by Stanford University and Accel Partners , this year's focus being on "The Future of Advertising in Digital Media."

It's all about new ad models for Internet-based services and the next batch of startups chasing ads and/or mobile services. But old media got some respect, too, at least in the morning keynote.

"If you said to me, 'Who's the person you'd watch most closely?' I'd say Rupert Murdoch," said Sir Martin Sorrell, CEO of WPP Group plc, a massive advertising services company with offices in 106 countries.

Murdoch understands that traditional media (newspapers, TV, etc.) is still a big growth industry in emerging markets, Sorrell said. So, Murdoch is buying TV stations in Poland, expanding MySpace into China, and, just today, bidding $5 billion to buy Dow Jones & Co.

Sorrell's point was that traditional media isn't dead, if you know where to look. But that doesn't make him a paper-and-ink fogy. WPP puts 20 percent of its spending into online ads for its clients, and Sorrell wants that figure to be more like 33 percent in five or 10 years. Aggressive, considering Internet ads represent just 6 or 7 percent of the worldwide total.

But what's really happening is a shift in power, he said. The way the Web works, power is shifting to consumers and away from content producers, and that's going to change the rules of who can make money. "Traditional media will not be as profitable as in the past. New media will probably not be as profitable as it is now," Sorrell said.

— Craig Matsumoto, West Coast Editor, Light Reading

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