Advertising 3.0? Considering The Advertising Eco-system

By Joe Marchese
Some of you may notice that my attribution has changed. I can't say much about this right now, but will say that this entrepreneurial venture has influenced many of my Spins over the past couple of months -- and some, such as this week's, far more than others. When I can say more about this mysterious start-up here, I will. Hopefully the perspective of entrepreneur in the world of online brand advertising will prove at least entertaining, interesting and, once in a while, insightful. In the end there will be countless technologies, systems and business that will enable brand dollars to follow people's attention from outdoors to online; hopefully I am working on one of them ;-). For today I would like to discuss what I feel is the key to so-called "next generation" advertising.

After last week's Spin, a reader took exception to a statement I made: Building successful business models for tomorrow's advertising will mean first, and last, evaluating how to improve the entire eco-system you are attempting to enter.

The response implied that first, and last, advertising's goal is to increase sales. I can't imagine anyone disagrees with this. I certainly don't. But let me be a little clearer in what I was saying in this statement. While increasing sales is THE end, there are many means to this end. The goal of advertising will always be to increase sales, but the role of advertising has to evolve. Advertising is changing from the buying and selling of peoples' attention with only implied consent, to a system requiring explicit consent of the people. Advertising where people don't want advertising, or where it interrupts an eco-system (from outdoors to online), will increase sales marginally and for short periods of time while the market and technologies adapt to allow people to block those interruptions. This approach will result in constant battle between advertisers and consumers, one that in the end consumers will win. Sustainable business models throughout the media and advertising value chain will focus on how to seamlessly integrate, and even enhance, content with advertising (again, from outdoors to online). These will be sustainable; these will be the superstars.

What/who is included in the eco-system? In the simplest view, the eco-system includes the content surrounding the advertising, the advertisers themselves and, most importantly, the people (re: consumers, users, viewers). You can look at almost any place there might be advertising and find these components. But defining the components of the eco-system is the easy part. Building, placing and in some cases, even integrating, advertising that adds the necessary value to each component is the tricky part.

What are the goals of each component of the eco-system? For the advertisers, it's easy; increase sales and build brand equity. For the content surrounding the advertising, the minimum is not to disturb the content with advertising messaging; the Holy Grail is to actually enhance the content with the advertising messaging. For consumers, the goal is to receive only informationally and/or emotionally relevant advertising at the right point in time and space.

It may sound like a tall order, but as we all would agree, advertising that doesn't increase sales or brand equity is an obvious waste. The reality that we are dealing with in a world of TiVo, user-generated content and attention fragmentation is that an advertising method that can increase sales, but doesn't address the other components of the eco-system, will eventually be phased out by the people and/or content publishers. When this happens, the advertising certainly can't deliver any longer on its first goal of increasing sales. Since constantly reinventing business models for short-term success is inefficient, the solution it to create technologies and business models built specifically to address all elements of an advertising eco-system in the 21st century.

The solution is even more complicated than the problem. It requires blending the right brain and the left brain, blending creative and algorithms. It requires innovations in technology and levels of human interaction. It requires aspects of professional development and user-generated personalization. In the end, it requires finding the point where Madison Avenue can meet the people halfway, using the next generation of advertising technologies and philosophies.