Advertising will change more in the next five years than it did in the last fifty

In the words of IBM:

The next five years will hold more change for the advertising industry than the previous 50 did. Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are re-defining how advertising is sold, created, consumed and tracked.”

From The end of advertising as we know it, IBM 2007.

Spot on. There are huge budgets at stake in a rapidly evolving market place and that means good opportunities for startups.

For IBM there are four drivers:

  • Attention is increasingly controlled by consumers as media consumption moves away from the TV and due to ad skipping/blocking technologies
  • The rise of UGC is enabling engagement marketing
  • New channels and technologies are enabling measurement of advertising effectiveness for the first time
  • The rise of exchanges is changing the way advertising is bought and sold

….. which will demand two key changes (and this is IBM plus a bit of me)

  • Demand from advertisers for transparency on how their budgets are spent and what the results are. Over time this could go as far as cross channel comparability and allocation of budget to different channels and formats based on performance. This might even get automated.
  • Greater creativity in advertising – traditional and online. This will take many forms, a lot of which I suspect haven’t even been thought of yet – but are necessary to overcome online ad-blindness and ad-skipping technologies in video. Part of the answer could well be innovative models that make explicit the exchange of advertising attention for content, and potentially even for cash. (Check this out for a fun example.)

If you read the IBM presentation (which I warn you is a bit of a slog…) then you will see they have a lot of survey data to back these ideas up.
Credit goes to Tomoaki Sowada for the pointer to the IBM presentation.

  • It would be great if advertisers offered us ‘advertiser generated content’ that we could better build into the heart of sites. All done on a CPA basis such that the effort needed to generate creative advertising content is rewarded by a low-risk ad model. Yes, there are glimpses of this now in product data feeds and some interactive ads but still pretty crude. Advertising mostly still feels like a ring-fenced area on a site. I’m guessing it’s on the way and would be a great help for people building sites.

  • It would be great if advertisers offered us ‘advertiser generated content’ that we could better build into the heart of sites. All done on a CPA basis such that the effort needed to generate creative advertising content is rewarded by a low-risk ad model. Yes, there are glimpses of this now in product data feeds and some interactive ads but still pretty crude. Advertising mostly still feels like a ring-fenced area on a site. I’m guessing it’s on the way and would be a great help for people building sites.

  • nic

    Thanks James.

    Some of the stuff going on in virtual worlds like Habbo is exactly as you describe (except for the CPA bit), e.g. in-world events to promote films that people are keen to attend (via their avatars) combined with promotional virtual goods which people buy and take to their virtual rooms to talk about with their friends.

  • nic

    Thanks James.

    Some of the stuff going on in virtual worlds like Habbo is exactly as you describe (except for the CPA bit), e.g. in-world events to promote films that people are keen to attend (via their avatars) combined with promotional virtual goods which people buy and take to their virtual rooms to talk about with their friends.

  • Morning Nic,

    It’s the CPA bit that’s most compelling for me. On a practical level, what if buy.at evolved from a network into a platform from which site owners/entrepreneurs could take a wide range of content (CPA feeds, ads, product specs, competitions, reviews, images, videos etc, etc). This would encourage advertisers to innovate and would unleash creativity in site owners.

    The growth of social networks has come from the demand side, ie individuals wanting to express themselves or communicate. I think the advertising industry could help unlock a similar pattern of growth if they morphed ad networks into platforms. All CPA, all accountable, low-risk for advertisers etc.

  • Morning Nic,

    It’s the CPA bit that’s most compelling for me. On a practical level, what if buy.at evolved from a network into a platform from which site owners/entrepreneurs could take a wide range of content (CPA feeds, ads, product specs, competitions, reviews, images, videos etc, etc). This would encourage advertisers to innovate and would unleash creativity in site owners.

    The growth of social networks has come from the demand side, ie individuals wanting to express themselves or communicate. I think the advertising industry could help unlock a similar pattern of growth if they morphed ad networks into platforms. All CPA, all accountable, low-risk for advertisers etc.

  • nic

    Don’t get me wrong James, I’m a big believer in CPA, hence the investment in BuyAt. That said it isn’t applicable in all situations – a lot of advertising is about building brand as well, and that means other forms of measurement become appropriate.

    In the Habbo example the advertiser was looking to build awareness of the film (i.e. brand) – there was no purchase or other action that they could tie payment.

  • nic

    Don’t get me wrong James, I’m a big believer in CPA, hence the investment in BuyAt. That said it isn’t applicable in all situations – a lot of advertising is about building brand as well, and that means other forms of measurement become appropriate.

    In the Habbo example the advertiser was looking to build awareness of the film (i.e. brand) – there was no purchase or other action that they could tie payment.

  • @ Nic….in one of the interviews we did for our Advertising report earlier in the year, one chap came up with a very interesting point – he noted that most of the big Ad agencies “DNA” comes from the evolution of the TV Ad era, and that the future “big beast” Ad agencies of the next era are now just small companies.

  • @ Nic….in one of the interviews we did for our Advertising report earlier in the year, one chap came up with a very interesting point – he noted that most of the big Ad agencies “DNA” comes from the evolution of the TV Ad era, and that the future “big beast” Ad agencies of the next era are now just small companies.

  • Emily Potter

    that awkward moment when it’s been the craziest ever in advertising…yup and it will only get worse