Shelly Lazarus, queen of corporate advertising, is living up to her name by breathing new life into marketing in a digital age, writes John Collins.

'SOMETHING VERY profound happened when gas went over $4 a gallon in the US. It was a tipping point, a magic point. From then on, people actually started to change their behaviour. The purchase of cars changed in what seemed like a three-week period." These are not the words of an economist, futurologist or some other professional soothsayer but one of the most experienced advertising executives in the US.

Shelly Lazarus, chairman and chief executive of venerable New York advertising agency Ogilvy & Maher since 1996, is clearly not your stereotypical advertising executive. Ogilvy & Maher Worldwide was founded by David Ogilvy in the 1940s and today, it's a worldwide marketing services firm that spans everything from public relations to direct marketing via event management and even in-store design. Just 40 per cent of its revenues now come from traditional advertising.

"We saw that coming a while ago, but we never thought it would be so much, so fast," admits Lazarus. Ogilvy espouses a multi-disciplinary approach to marketing which it has dubbed "360 degree brand stewardship". This is a concept that some of the largest brands and companies that Ogilivy represents, such as IBM, Dove, Kodak and American Express, have bought into.

"We follow what our clients need to build their brands," she explains. "Once you put forth this premise we have of 360-degree brand stewardship, our business plan practically writes itself. We have to be able to execute everywhere the brand should be, and so we have to either have the expertise somewhere within Ogilvy or have a joint venture, alliance or acquire it."

That has brought the firm into seemingly unrelated areas such as architecture. Ogilvy hires architects to design physical spaces in keeping with the rules of a particular brand. That might sound a little fluffy, but the shop in New York's Times Square that it developed for the Hershey chocolate company has been a huge success. It is also working with toymaker Mattel on plans for Barbie stores.

Lazarus was in Dublin to speak about another area that Ogilvy has successfully branched into - digital media. At its Verge event in the Guinness Storehouse, hundreds of brand and marketing managers turned up to hear how they can engage in the new world of social media online. Typically, the budget for the digital realm comprises the 5 to 8 per cent of budget left over after television, print and outdoor have been saturated. This is especially true in less mature markets like Ireland, where the online advertising market is estimated to be worth a paltry €150 million annually.

Lazarus says it takes "five hours of sustained evangelism" to get people to start thinking differently about digital. In an age when seemingly everyone has the ability to publicise their opinions, one of the fundamental changes facing brand managers is that they can no longer easily control how that brand is used and perceived. Surely that must cause her clients sleepless nights?

"It worries them enormously but as we are all saying, it's going to happen whether you like it or not. So you better get into the conversation rather than staying on the side and getting upset about it all."

She gives the example of beauty product brand Dove and its online real beauty campaign which, she says, started a dialogue among women about what is beauty.

This kind of thinking extends to all sectors of the media as consumers become creators of the news. Lazarus cites US research which shows that after friends and family, people trust "strangers with expertise" (eg bloggers) to provide them with accurate and reliable information. Traditional media didn't even rank in the top five.

Even brand managers who have had success with online campaigns are just not as comfortable with it as traditional advertising, she says. "It's just not as sure a thing to them as running a television commercial." This suggests, of course, that new media budgets are more vulnerable when a downturn hits. While that was a typical reaction during the last wobble of the US economy in 2002, Lazarus does not see it happening now. "I think one of the reasons is that we have made the internet more accountable, too," she says.

But isn't there an excessive preoccupation with click-throughs and other metrics when it comes to online marketing, that is not demanded from more traditional forms? Lazarus agrees that advertisers can over-obsess on the quantitative results rather than the quality.

"It always makes me laugh when people say, 'we got a million downloads from YouTube'," she says. "Of what? It is true that this message was created by a certain company or brand, but I'm not sure that just because these people are downloading it, there is any value in that."

She firmly believes that advertising and branding are a cocktail and that media forms should not be measured in isolation.

She also credits social networking with introducing a fundamental shift in how people interact, but says no-one knows how to use it as an advertising medium yet.

While she says Facebook Beacon, a controversial feature introduced last year which would have shared details of your online purchases with your friends, was a "brilliant thought", she describes it as an assault on people's privacy.

She believes the new technologies actually raise the bar for advertising rather than sound its death knell. Referring to video sharing sites like YouTube, she says: "If you want to think positively about what's happening, then consider this: never in our wildest dreams did we think that people would watch the advertising they like over and over and over again."

One group of media players that she regularly talks to, newspaper editors, seem to be particularly resistant to change and agonise over what it means to their business. But Lazarus, while choosing her words carefully, suggests that their concerns are overplayed, particularly given the advantages to the reader of being able to link to different media.

"I'm not sure our children are actually going to hold pieces of paper in their hands and read it every morning. If they choose to get it on a screen in some form, either on their telephone or on a computer, it seems to me that the content has to be created by the same excellent reporters and writers. I don't know why newspapers can't be indifferent to whether it's on a printed page or on a screen."

In fact, Lazarus believes the move from print to on-screen consumption of daily news will be more of an issue for advertisers than journalists or editors. "The advertising industry will have to rethink if there's a way of getting that impact you get from a full-page newspaper advert," she says.

She believes that the vast majority of web advertising, such as banner advertising, is "small-space print advertising" and doesn't even scratch the surface of the interactive possibilities. The notable exception is search-related advertising which has been pioneered so successfully by Google.

"If I can intercept someone that is interested in something, just at the moment that they are interested in it, the value of that is extraordinary," she says. "That's the killer app but that's just one small piece of everything you do."

Advertising agencies like to talk about "new media" as a catch-all phrase for the digital realm, but that's something of an oxymoron for Ogilvy. The firm established its new media division back in 1983. In those days, major players like Time Warner and AT&T were trying to popularise clunky services that provided consumers with more information and the all-important ability to carry out digital transactions.

"I remember visiting a household in California and we walked in and started talking to this woman about this new technology she was testing," recalls Lazarus. "She said, 'I sort of feel like I'm a 747 pilot'. It was this huge console that you had to operate but you could get a lot more content, you could actually order things. We just kept getting involved with these sort of things because we knew it was going somewhere but we just didn't know where.

"We've got to be in the places that consumers are going because that's where we've got to bring the clients' brands to life for them. Sure some of them are going to be blind alleys, there's no question about that. But the other good thing about new media is it's relatively inexpensive and easy to experiment."

Although new tools and outlets are emerging on a daily basis, Lazarus does not believe the fundamentals of marketing are changing.

"I think it's still all about brands," she says matter of factly. "Someone once said nothing compresses data better than a brand. As life gets more complex, you've got to have brands to help you sort through the choices. There's just too much choice. The way though that you build a brand today has changed so much, but it is still a constant dialogue with consumers."