Tomorrow's Ads session at World Economic Forum?
I've been asked to moderate a session called "Tomorrow's Ads" at the World Economic Forum in Davos later this week. It a panel made up of folks from ad agencies, satellite television, publishing, and internet infrastructure (and surprisingly, not really anyone from what I'd consider a next generation ad platform, despite the presence of many such people here in Davos. However, there are many such folks in the audience, and I'm hoping to bring them into the discussion.) Here are some of the questions that I've been wanting to ask the panel, off the top of my head. I'd love your suggestions for more.
- Imran Khan of JP Morgan already estimates global internet ad spending for 2007 at about $30 billion (and even that seems like it might be rather low given that Google and Yahoo alone ad up to about $22 Billion in revenue.) But according to his figures (sorry, no link available--I have only a paper copy), the internet's share of global ad revenue appears to be only about 5.3% worldwide, and 6.3% in the US. Given that the internet now accounts for much more than 5-6% of media consumption, how far and how fast are other advertising channels going to fall, as ad spending follows media consumption?
- Given the breakthrough that Google's attempt to select advertising for relevance rather than simply for reach, with a model of pay per click rather than pay per impression, how are you rethinking the basic model of intrusive advertising? Will other media also need to adopt the relevance model rather than the intrusive model? How will they accomplish this technically?
- Relevance in advertising requires understanding what users are looking for. That means knowing way more about them than at any time in the past. Old style thinking sees this as an invasion of privacy, but Google and others have demonstrated that if advertising is truly useful to the recipient, they will accept a much greater degree of knowledge on the part of the advertiser. How do you create trust with the recipients of targeted advertising such that they are willing to have you know more about them?
- How do ad agencies, publishers, and advertisers take advantage of the conversational nature of the internet, where word of mouth may carry more power than even the best crafted ad campaign? How do you create and harness "viral advertising"?
- Obviously, some advertisers have already figured out how to harness "viral" advertising that users customize and pass along by themselves. Elf Yourself" from OfficeMax was briefly one of the top internet sites this past Christmas. Is this the dumbing down of viral marketing?
- How does the role of an ad agency change as the opportunity changes from matching large advertisers with large publishers to a horizontal aggregation of passionate "long tail" audiences? Google aggregates these audiences algorithmically, but there are also next generation intermediaries like FM Publishing [disclosure: I am an investor] who are working to bring together those audiences that were previously unreachable by large advertisers.
- What are the risks to advertisers of bringing user generated content into their ad campaigns? There have been a number of notable gaffes when companies aren't liked or trusted by their marketplace. Does the increased transparency of the internet change the compact between advertisers and their audience?
- In many ways, advertising was the first web service, since web ads are usually placed by automated cooperation between an advertiser site, a publisher's site, and an ad broker. What risks does this web-based ad approach carry? (For example, an O'Reilly-managed site recently appeared to have been hacked. What happened instead was that a domain belonging to an advertiser whose Javascript was running on the site had its registration lapse. A porn site snapped up the domain and and injected their ads instead.)
- Television is one of the largest ad markets -- $164B worldwide by JP Morgan estimates. As YouTube increasingly competes with television, what kind of advertising do you see taking hold there? Pre-roll and post-roll seem very 1.0 to me. Maybe even .5.
- What do you make of experiments like RyanAir's incorporation of an advertising revenue model into an industry not previously seen as an advertising vehicle? Where else are we going to see advertising cropping up?
- What kind of content is not likely to be subsidized by advertising?
- How do you react to the threat of competition from low-cost competitors like craigslist who are happy to give away for free what you used to charge for?
- Mobile may soon dwarf the web in its importance in the media landscape. Yet we have no breakthrough form of advertising on the platform. What might lead to a google-like breakthrough? Location as relevance?
tags: web 2.0
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Please get the advertising industry to pay more attention to the Publisher and Viewer. Nobody ever wants to talk about them. Advertising is not just about the Advertiser and Agency.
I'd add to Q1: "What is the broader societal impact of a drain of ad revenues from high quality bundled content, e.g. magazines & newspapers".
Are there saturation limits to advertising, or can every square centimeter and second have some exposure to an advert? Is there a "tragedy of the commons" in the making in this regard?
The ad industry needs to push out more relevant ads. Simply using the shotgun approach of "demographics" is ineffective. Google's use of search and browsing history is promising, but is only partially relevant and effective.
Why isn't there some industry-wide standard established where users can create personality/interest profiles on their machines? These profiles could be read by the ad server before posting ads on the page. Seems like this might change ads from being an annoyance to a value-add. With such a standard in place, the question then becomes--Do advertisers have the inventory to handle the long-tail interests of consumers?
More thoughts:
1. When does the add stop being the message and become the product or service itself?
2 examples.
a. There was a vogue for scratch & sniff ads for perfumes. What if the capsules contained enough perfume for a single use? (free sample approach in print ads?)
b. Software [as a service] launched directly from an advert, maybe even contained with the add space? (advert as portal/platform?)
How would this change the balance between user acceptance of adds and the desire to push more ads? How might the revenue models change?
2. Another is how does the presence of adverts affect the perception of adverts? I notice that Sebastopol looks very advert free, almost "quaint". Almost, I might say, lacking in visual stimulation. Is this teh result of my living in major cities and conurbations like London, NY and Silicon Valley altering my need for different visual stimulation? (My kids don't like adverts, but do seem to need plenty of visual stimulation, whether from tv or video games, sports etc).
Two questions:
1. related to valentin's idea, how has / will new media (most notably, the Internet) change the way you advertise on traditional media (magazines, newspapers, television, etc.)?
2. MTV is reportedly toying (search media post for the article) with the concept of running L-Shaped advertising content adjacent to live programming, reactions?
"There was a vogue for scratch & sniff ads for perfumes. What if the capsules contained enough perfume for a single use? (free sample approach in print ads?)" I swear I have a memory of someone (in a TV show or movie), rubbing one of those perfume-ad-stuffed magazines behind their ears. I think the current ads contain more than enough perfume, thanks!
Riaz --
You're right. I typed the wrong URL. It's fixed now. That's the problem of writing a post when you're offline and can't check.
What about new approaches and technologies to allow the viewer to edit and limit ads they are served (old examples: pop-up blockers, no-call lists): how can they be supported? What would advertisers do to "manage" the limited reach.
Infrastructure business model -
all of the new advertising relies on the Internet backbone for connectivity and performance. Yet the business model which supports that model doesn't support profitability for the Tier 1 backbone providers. Is there a business model which would support rapid increase of backbone bandwidth, so that more people could have complex screens update quickly, and so more information/design/presentation in pictures delivered easily to them ?
[this is intended to be about backbone bandwidth, which is the relevant international issue - access bandwidth is a different issue, addressed very differently in Asia than in the US]
Elfy: Apologies for the mistake about Office Depot vs. Office Max. I fixed the post. A piece as entertaining as Elf Yourself at least deserves to get the brand advertiser right. But my mistake does illustrate that viral marketing is as subject as other forms to brand confusion. What lessons might be learned from mistakes like mine?
Meanwhile, I also heard from someone at Office Max's ad agency, who bristled a bit about my comment about "the dumbing down of viral marketing", and gave me some jaw-dropping statistics:
“Elf Yourself” was created by digital content marketing firm, EVB San Francisco, and partner agency, Toy New York. The campaign was created for OfficeMax (not Office Depot as you referenced) to build brand preference among all ages and distinguish the office supply retailer through entertainment and humor.
After six weeks of being live, the holiday site attracted a booming number of visitors and hit the bull’s eye of viral success - it seeped into pop culture. Broadcasters at several stations, The Today Show, Good Morning America and CNN American Morning, created their own dancing holiday greeting for viewers, and thousands of blogs, such as Rosie O’Donnell’s Blog & TBS The Daily Flog, also added personalized versions.
The success of "Elf Yourself" is in part due to three fundamental characteristics 1) Keep it Simple 2) Make it Personal and 3) Give People a Reason to Pass it on. Below are the final statistics for the 2006 and 2007 “Elf Yourself” campaigns, including some data from a recent follow-up survey. Let me know if I can share anything further with you.
Elf Yourself 2007 (six weeks, 11/20/07 to 1/2/08)
- Over 193 million site visits
- Over 123 million elves were created
- 60 elves were created per second
- Users spent a combined average of 2,600 years on the site
- One in 10 Americans visited ElfYourself.com, according to Nielsen Online Strategic Services
- Ranked #51 most visited site on the web during December (HitWise Intelligence)
- Ranked #1 on "Movers & Shakers" during December (Alexa Rankings)
- Ranked as top 1,000 website in 50 countries (Alexa Rankings)
- Featured on CNN American Morning, ABC World News, Good Morning America, TOADY Show, TNT Sports News, Fox News, Rosie O'Donnell's blog & TBS The Daily Flog.
2007 Survey Results
- 63% of participants who shop for office supplies 10+ times per year were aware of Elf Yourself.
- More than 1/3 of those that visited ElfYourself.com claim that Elf Yourself influenced their decision to visit OfficeMax.
- 1/3 of participants who were aware of Elf Yourself claimed that Elf Yourself improved their perception of OfficeMax.
- 95% of those that visited ElfYourself.com claimed they would likely visit Elf Yourself again in 2008.
Elf Yourself 2006 (five weeks, 12/1/06 to 1/7/07)
- Over 36 million site visits
- Over 11 million elves were created (41,000 per hour at its peak)
- Users spent a combined equivalent of 600 years on the site
- Over 79,000 MySpace hits
- Fastest “Mover & Shaker” on Alexa Rankings, reaching 267 most visited site
- #2 on Entertainment Weekly "Must List"
- Over 100 User created videos on YouTube
- Over 2 million Google search results
How do aggregator sites (allowing people to do comparison shopping
among airline flights, hotels, etc.) fit in with advertising? How does
it benefit a vendor to be listed on such a site as opposed to running
an ad--and will the two types of exposure come together? Can search be
extended through APIs to aggregate results and allow for on-the-fly
comparison shopping? This might require metadata (with all the
overhead and fussiness that comes with metadata). And if vendors don't
see a benefit to comparison shopping, they'll never use the metadata
or APIs. (I talked to one would-be aggregator company three years ago
that suffered from that problem.)
Some questions
1. Do agencies fear the threat of Google moving into the creative side of the advertising business?
2. Who are the clients and agencies that are already practioners of "Tomorrow's Ads"?
3. Given that VC money in the Valley is being handed out to media innovators in regular fashion, why are the agency networks not participating. Why does the agency world lack innovation?
4.Given the increasing importance of content- are we closer than ever to true Madison Avenue and Hollywood collaboration?
5. How will agency structures need to change to be better prepared for "Tomorrow's Ads"
I should add a bit more about my "dumbing down" comment. I probably shouldn't have said that, or at least being clear that I was talking about the dumbing down of virality to put it in service of advertising, rather than that Elf Yourself was a dumb ad.
Consider it the bias of a software guy who thinks virality is great for useful stuff. But realistically, virality is a great filter for advertising. At least when you get an advertisement virally rather than shoved into your face whether you want it or not, there's a good chance that someone you know has vetted it for you. So overall, this is a good thing.
I got Elfed myself by someone who works for me, and my wife laughed so hard (she watched it three times in a row) that I then made an elf dance featuring her, Emily Dickinson, and Saint Francis (the subjects of a play she's writing.) She loved it.
So viral advertising works.
I'd like you to spend more time drawing out question 14.
Some forecasts suggest more people will access the internet by their mobile phone by the end of 2008 than the PC.
The two basic differences of the mobile to the PC it's always with & the network knows where you are.
What other elements/ad products/models have the panel seen working across the world that appears to have sustainability? Ie, presence, location, modes of use, micro-segmentation, micro-payments etc
Simon St. Laurent wrote in email:
A couple of friends of mine run small Internet advertising shops, and another works at a much larger demographics and advertising place. I asked whether they were battening down the hatches, and the response I got were along the lines of:
"We've talked with our clients, and they're cutting their TV and radio rather than Internet. They like that they can figure out how effective particular ads are, and keep track of who bought what. TV and radio is like pouring money from a helicopter, and there's no way to know."
This sounds like all that investment in analytics may give the web a major advantage this time around over other forms of media.
Paul Sagan of Akamai, who is on the panel, wrote in email:
"The web was supposed to be about personalization and targeting, and that was supposed to revolutionize advertising. Is the web capable of monetizing individual user attributes by providing what's really relevant to users, as advertising or other content? And will users accept this?
and
Is the debate settled between subscription vs. and ad-supported content models? Are there geographic differences globally over which models work?"
Both very good questions. I've mentioned them above, but Paul puts them more plainly than I did.
Finally, I want to talk about content itself as advertising. After all, my original vision of web advertising (and for those who don't know it, O'Reilly's Global Network Navigator was the very first site on the web to have advertising) was that content itself would be advertising. People came to think of the popup or banner ad as the advertising, and the destination as something else, but so much of what we consider content websites are actually advertisements for a company's products.
Older readers will remember the "bingo cards" that used to be inside any B2B magazine. You'd circle the number associated with the ad to receive more information in the mail. I saw the potential of the web to replace that with a direct followup for more information.
That of course is now taken for granted. But of course, it makes the size of the internet ad market far larger than anyone else is counting.
"After all, my original vision of web advertising [...] was that content itself would be advertising. People came to think of the popup or banner ad as the advertising, [...] but so much of what we consider content websites are actually advertisements for a company's products."
I think this is usually termed 'sponsored content'. The extreme (and unethical) version is the advertising masquerading as content such as editorial or news, for example Video News Releases.
Here is a question (sorry I didn't post this sooner): Is the 'chinese wall' to the benefit of the credibility of online advertising as much to the benefit of the content?
Michael --
I wasn't referring to sponsored content. I was referring to a site like oreilly.com, our online catalog. Or any other company information site. It's ultimately a form of advertising for our company and our products.
The point is that the stuff we call advertising is the tip of the iceberg, and that a huge amount of stuff that used to be considered advertising is now just part of a company's online presence.
Sponsored content also exists.
Unfortunately, the specifics of what actually happened in the session are off the record, per World Economic Forum rules, but I can say in general that the ad agency guys there were celebrating new kinds of advertising that do break down the chinese wall. One example was a recent Diesel campaign that involved effectively a soap opera, in which two "fans" kidnapped the sales manager to try to get Diesel to name the new underwear after them. It apparently became quite the media event.
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Valentin [01.24.08 07:51 AM]
I think you missed the category of question related to the digitalization of traditional advertisments such as posters and billboards. Questions such as:
When will we see impression counting technologies in posters (e.g. http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=199500223) ? How will this change posters & billboards?
What are the most promising ideas to make posters/billboards interactive? (think NFC, camera phones + visual codes, bluetooth, cheap printable circuits) When will we see interactive poster?