Ad spend to move from buying media to participating in it?


I have been wondering for some time whether the next wave of ad spending will be spent on participating in social media rather than buying media in the traditional sense.  I think this could be a very big deal for brands – as the promise is to be in perpetual conversation with their customers, which is great for both marketing and research. 

The implications for the advertising world would be profound, as budgets would shift from purchasing ad slots to paying for bums on seats to participate in conversations.

And, surprise, surprise, there might just be a startup opportunity or two lurking in here:

  • Technology for monitoring conversations
  • Analytics to tell us what they mean, and
  • Tools (and maybe people) to help instigate and manage conversations

European companies I can think of in this space from the top of my head include FreshNetworks, Whitevector and The Conversation Group.

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  • Nic, Hi there,

    One more opportunity is (I think) the space we, iChoosr, are active in.
    Organize a group buy with a large community and do a rev split.
    This way, they (the community) will do something extra for the community, namely to move from a centralized institution (like a bike wheel with the spokes), to a more “creating a leverage for and with their community) (sorry for my english)
    This way conversation will start as well.

    And yes, a new rev stream is created, next to the diminishing ad stream.

    If you or somebody else wants to know more, let me know.


  • Hi Bart – good point. That is another way of approaching the question.

  • My old business helps clients start the conversation in their research and planning phase. Now owned by Cello PLC.

  • Alan Munro

    Good point, Nic. Media in the traditional sense is changing so quickly that buying it in the traditional sense is on the way out too.

    The difficulty that large corporations will have with social media and truly interactive marketing is that it is so incredibly alien to their current culture. Old-fashioned one-way marketing is such an easy option when compared to the difficulty of actually engaging customers and maintaining a dialogue.

    I think you're right that there will be start-up opportunities around the support technologies but I think the real start-up opportunities are in creating brand propositions that embrace the potential for proper customer dialogue from the outset and build their businesses on strong relationships with their customers. Having said that, it is still difficult to find venture capitalists or other investors who are willing to back unconventional marketing strategies because they are 'unproven'. As ever, some of the pioneers will make a killing while others crash and burn.

  • Thanks Alan. As ever timing the market will be critical for entrepreneurs and investors alike.

  • Alan Munro

    Yes, timing is everything. And the would-be start-up entrepreneur's job is to just keep going until investors agree that the timing is right. Having said that, I think the best opportunities make the timing right because they change people's perceptions and shift market direction. That's a different debate though for another day …

  • Once upon a time I was always before my time! Time though, has moved on and finally I am in the moment! – famous people – famous brands… all good things come to those who wait! Needless to say I've agreed with the above for some time…

  • I'd been reading some contrasting perspectives on this theme and blogged about it here…. The trust of the recommendation or advertising source is shifting towards personal recommendation – this in turn will make social media much more valuable to brands that it has been to date. We've seen over 600 businesses start to use IGOpeople to converse with their customers, in just six months.

  • Hi Nic!
    I think it is the right time for new ad targeting technologies. What do you think?
    At least we started and the customer demand is really huge.
    Everytime we mention that we are currently building a new targeting technology for social networks everybody wants to have it. So not the badest time for a startup.

    We also wanted to do attention time based billing but the ad market is not really ready for this. Especially in Germany several social networks got bought by traditional newspaper publishers. They are not really ready for such a big shift, although it would be very fair.

    Greets from Mannheim

  • I think they are needed, yes, but also difficult.

    What is your proposition?

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