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@ Econ SM: Keynote Q&A Steve Wadsworth; The Problem Is Too Many Measurements

This story was written by Joseph Weisenthal.

Just in case you were curious: The Miley Cyrus pictures will not be appearing on anytime soon, at least according to Steve Wadsworth, President, Walt Disney Internet Group (NYSE: DIS). Stepping back from recent history to ancient history, during a keynote Q&A at EconSM, Kara Swisher asked Wadsworth to go back and discuss Disney's early (and largely failed) internet forays during the last boom: "Our experience with the internet pretty much parallels the history of the internet." Basically, like everyone else, Disney thought it was all about being a player in the portal space, and it thought it needed to own the gateway between the consumer and its content. Wadsworth: ""Let's establish our own position in the space. The thinking was a good one, but the timing was so off." Swisher: "Other than that Mrs. Lincoln..."

Business models: Wadsworth: "Ultimately, what this game is about is creating phenomenal creative product We're focused on creativitycreating content that engages a large audience." He then talked about the need to keep iterating, learning from what works and applying it elsewhere. For the company's organically launched Toontown, the initial business model was "sign-up for free and play for three days and if you don't give us your credit card, we kick you out." This failed. Only when it learned from Club Penguin, did it learn to let people play as much for free as they wanted, but then to charge them for certain specific things. Also, the Club Penguin franchise can go the other way. We're used to seeing web and merchandise base off of movies (eg Pirates of the Carribean), but there will be opportunities to do offline stuff with Club Penguin.

Deals?: Wadsworth was asked whether Disney could be interested in buying Webkinz, though he demured by insisting "I Don't know Webkinz is for sale." Swisher: "Everything is for sale except Yahoo." As for other startup trends that Wadsowrth is seeing: "there's a lot of versions of the same thing" (yes there are).

Advertising: One frustration of Wadsworth's: "As measurable as this medium is, there are too many measurements." Brand advertisers still don't know what kind of ROI they're getting, or really how to judge what they should be spending on a given chunk of ad inventory: "They understand TV, and they're familiar with what the metrics mean." To which he added: "To say they're slow means they're being savvy and smart." Google (NSDQ: GOOG) is the one company that offers a clear proposition, hence their success.

Video advertising: "We have tons of video mostly it's 15-second or 30-second pre-roll slots." This has to change, Wadsworth acknowledged, since pre-roll is an engagement killer. At "interactive ad experience leads to much higher engagement." The problem is that advertisers are hesitant to spend the money on new creative for these interactive ads at least that's Wadsworths view.

By Joseph Weisenthal

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