I was reading a recent article about consumer products giant Procter & Gamble's announcement of plans to cut its commitment to TV commercials and re-allocate those dollars to areas like product placement, print media, direct marketing and the Internet. Particularly interesting is the decision to cut cable advertising by as much as 25% (versus 5% for broadcast networks), which suggests that cable has done a poor job of defining clear, target-able customer segments for advertisers (or at least for horizontally broad ones like P&G). This got me thinking (always dangerous!), how does advertising morph as we evolve from a one-way broadcast oriented world to a mobile, broadband-enabled world?
By no means exhaustive, my goal is simply to build a reasonably strong straw man that can picked apart. So here are my thoughts on how advertising evolves:
- Narrowcasting and affinity marketing takes hold: In the language of Malcolm Gladwell's excellent book, "The Tipping Point," new market ideas propagate like viruses through a network of mavens (knowledgeable enthusiasts), connectors (people with large social networks) and salespeople (people who are good at persuading people to take action). With the emergence of syndication and subscription models (RSS), tagging to enable context setting and amplification, and blogging to provide the message containers about the good, bad and ugly of a particular product/service, all of the key pieces are now in place for advertisers to take an institutional approach to cultivating this form of marketing.
- Product placement becomes embedded but not invisible: One of the primary drivers for the dramatic increase in the number of products being placed in TV programs, video games and movies is that with the advent of TiVo, viewers generally fast forward through commercials, rendering the "reach" of an ad meaningless. Beyond that factor is the simple reality that we live in an age of short attention spans where separating signal from noise is non-trivial. This suggests that advertisers will not only expand the scope of where they place products but how they connect with and engage consumers. For example, why every TV program doesn't have a default link at the end of a program that enables consumers to get more information on the products placed in the program is beyond me. Wasted opportunity but advertisers will get smarter in this regard. Similarly, there are "out of band" ways that advertisers can connect with viewers of a program, such as contests and content aligned online services (the latter of which I blogged on for O'Reilly). Finally, advertisers will need to re-think how they connect emotionally with consumers when placing products, as the box of Cheerios sitting in the background of an "The O.C." episode provides no connection, whereas when Trump touts an M-Azing candy bar in an episode of The Apprentice it is novel but perhaps too heavy handed to work over the long haul. Expect huge experimentation in this area.
- Video ads: targeted, actionable and measurable: On some level, this point is kind of a "DUH" but when you peel back the onion a bit, things are a little more nuanced. TV advertising as it exists today is broadcast in one form with the identical message to all viewers irrespective of whether they are truly prospective customers (e.g., the Pampers ad viewed by seniors -- don't go there!). As IPTV, Video blogs, video podcasts and more targeted forms of interactive marketing take hold, advertisers have the potential to turn the model on its head. For example, if I could fill out a form that enabled me to meaningfully list the types of products I am interested in and those that I have NO interest in or could click a button that says "more like this" or "less like this" when viewing a commercial, I would actually pay attention during commercials! Similarly, if advertisers applied a formal discipline to the type of actions that the consumer can take (preferably in a single click) when viewing the ad, such as "send coupon or free sample," "add to my product catalog," "tell me where I can buy in my area" or "research this product further," advertisers could begin developing direct relationships with customers and turn customers into mavens, connectors and/or salespeople. Minimally, through this process, they would enable the customer to self serve by deciding what level of engagement they are ready for. And guess what, each of these actions is measurable and mine-able.
- Ads get longer: There is an irony in this statement inasmuch as many people believe that as alternative forms of delivering video take hold, the traditional 30 minute or one hour format of TV programming will go away, or minimally be augmented by shorter (3-5 minute) programming segments. The logic is that who wants to stare into a handheld device to watch an hour of Desperate Housewives, whereas a fan of the show might very well spend five minutes viewing a short segment on their favorite character's travails over the past season. In any event, just as 30-60 minutes is too long for the attention starved to sit and watch a program, 30-60 seconds is too short to adequately deliver an advertising message that connects with the viewer, asserts a clear value proposition, espouses how the offering is differentiated, who it was designed for and the advertiser's proposed relationship with the consumer. Needless to say, the success of the infomercial industry and shopping channels like QVC validate this premise big time. As broadband takes hold, the potential for advertisers to embrace a long form advertising model just makes sense.
A fantastic book on the topic of advertising that I heartily recommend is Ogilvy on Advertising. Despite being written 20 years ago its core themes are incredibly timely. Stands the proverbial test of time.
What's your take? How does the model evolve in your mind, and are their obvious innovations that will transform the industry?
