2008 Digital Trends Part I: Media Battle Advertisers for Eyeballs

Over the next two weeks (like in years past) I am going to post a series of essays on what I see as the big digital trends to watch in 2008. All of these are less about individual sites and technologies. Instead, what I hope to do is connect dots and start a dialogue with you about how technology will impact the media, marketers and consumers in the coming year.

In addition, to be quite honest, this is also my way of getting more disciplined about blogging more often. I really miss posting here regularly (beyond just the links). Further, as much as I love Twitter, it's not a medium that permits thoughtful analysis. As always, I am eager for your feedback. Your input makes me smarter and keeps me motivated.

Here's the first piece in the series...

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For decades media and advertisers have thrived as two peas in a pod; a symbiotic ecosystem that benefits both equally. However, this is all starting to change.

Today, thanks to the web, every brand can become a media company if they put resources behind it. This means that the media and advertisers are increasingly battling each other for your constricting field of attention. In 2008 and beyond this will threaten to undermine the entire notion of ad-supported content and perhaps change the economics of both industries dramatically.

There are several forces at work here that are coming together to form a perfect storm.

For starters, there's the trust picture. Traditional advertising - especially online banners - are not trusted. Recent data from Nielsen shows that consumers put far more weight into individuals. This validates what the Edelman Trust Barometer has revealed over the last several years.

Second, we are seeing a critical mass of consumers using new technologies that let them bypass ads or even ad-supported content altogether. These include blogs, RSS, TiVo, DVRs, iPods, satellite radio and browser ad blockers.

Last but not least, the biggest story is that marketers are becoming a lot more confident online. They are starting to plow a significant portion of their budgets into digital media. As they do, they are investing in creating their own content. These properties leverage the same distribution channels that we, as individual publishers, use - most notably informal word of mouth networks, structured social networks and search engines.

If advertisers start creating their own online content in droves and find they can distribute it efficently, they may elect to bypass the media middleman. And why not? After all, they can build a direct relationship with their customers and achieve greater efficiencies in the process.

Already some of the biggest global brands, including several of our clients, are investing in creating their own content. Wal-Mart for example recently launched the Checkout blog. Dove has seen a lot of success in 2006 and this year with their series of striking videos. (Note: I am a consultant to Unilever but did not work on these videos.)

They aren't alone. Others like Sony and JC Penney are taking a different approach by aggregating content.

The media's challenge is to figure out how to thrive in transition as their big advertisers recognize they can use the web to bypass them. The key for the media is to use their reach to help marketers quickly build scale for their own content. This is no easy feat for businesses that have long fulfilled the producer role. However, they may increasingly need to find a way to balance their own content with advertiser-created offerings they host.

Should the media fail to transition in 2008, it's conceivable that more marketers will go it alone and the media will see their audience and dollars erode.

Comments

[E Gordon]

If advertisers like JC Penney can produce content that is more attractive to a worthwhile customer segment than media producers can come up with, the media producers will lose and deserve to lose. And they will lose not because of technological change but because of they are incompetent at doing exactly what they exist to do.

If Unilever can produce more appealing movies than Disney, better recordings than Sony Music, or a better newspaper than the New York Times, it's about the dismal failure of the latter.

[Alan]

Despite more and more advertisers creating their own content, I think the symbiotic relationship will continue to exist for quite a while. Content is still king and most of the time, advertisers ain't got it. Marketers ARE figuring out that their dollars can go farther online and I agree that will drive more and more creative uses of those dollars in order to stand out from the crowd. In 2008, we'll probably see more singles and doubles (and strikeouts!) than home runs though.

[Sean]

I agree, but marketers still have a long way to go. The notion of ad-supported content (and advertising as we know it) began in the 19th century with newspapers, which offered distribution. The traditional ad-supported content model will not make it very far into the 21st century as marketers find they can reach people more effectively and efficiently on their own. But they will need expertise and tools to get them there. And there aren't too many marketer-driven content experiments that have won me over, as most have only just started to grasp that transparency and authenticity are absolutely essential to gaining an audience.

[bart Stevens]

Steve,

Hi there from Belgium.

With great interest I've been following your blog for the last couple of years.

(This being the first time I leave a comment, it better be a good one ... ;)

Anyway.

I've been involved in the work done around VRM (which stands for Vendor Relationship Management). What this means is that we think that the consumer will take over the central stage from the vendors.
(it will be CRM 180 degrees ...;)

The consumer wants to take control again over his/her own data and ID. They do not want to buy a book, only after "presenting their CV" to Amazon ...

So they will take center stage again ... But then what?
Do these people (you and me) want to see ads all over the place? Probably not. They are smart enough to do their own research on-line to determine what is the best product. We also will "open the door" for deals when WE are ready, we do not want companies banging on our door day in day out.

But what's in it for the advertisement world? Do not BS us, tell us the truth, build a relationship with us based on facts, not fantasies. (maybe some people are open to receive fantasies, but at least, let them decide when to receive them)

So Madison Av. will become a huge HR shop, as in HUMAN RELATIONS. How can we best support the people in the field, what do they need, "we should ask them to see if they like this approach", etc etc.

It will be a long way, and not just something for 2008, but it will come. I'm convinced ...

Anyway, if you want to read about VRM and applications which will come to the market, see if you have time to come to ichoosr.com/blog (and yes, there are no adds there ;)

Cheers and happy Xmass to you all.

Bart

[marti garaughty]

Hi Steve, with so many things competing for our attention on the web, "attention deficit disorder" takes on a whole new meaning.

Traditional marketers seem to finally be getting the message but stil have a long way to go.

[John Ettorre]

This is hilarious: an Edelman "trust" barometer, supplied by a thoroughly untrustworthy flak organization that will say whatever the hell its clients pay it to say. Do you even occasionally stop to consider how ridiculous things such as this are? Or are you just so used to drinking the kool aid that you no longer notice?

[B.L Ochman]

While I agree that traditional advertising has lost credibility, and that the collaborative and viral nature of the Internet is lost on clueless Madison Ave, I don't think corporate content will gain credibility any time soon.

That's because corporations have to view the online audience differently before they can expect to gain trust. As long as they see us as a group they can influence with heavy-handed messages, or manipulated surveys, or brand-centric content, nothing will change in the relationship between customers and marketers.

I wrote me intrepid predictions at http://tinyurl.com/2m7p7u and i see subscription models for social media eclipsing advertising and marketing messages from companies.

Thank you so much, BTW, for all the great tech advice and how-tos you give to those of us, like me, who lack the tech gene but love to know how to use the tools you explain. Rock on!

[James]

I might be missing something, but I don't see this able to go to the length you're suggesting in the long term. Advertisers can only create so much of their own content. Regardless of "trust" over banner ads, I don't run out and trust a product comparison (for example) from Sony on what TV I can buy.

I look for a third party that over time I have decided is trustworthy enough to use as a starting point (more likely, I look for a lot of third parties). Sometimes these are users, but oftentimes I'm looking for professionals/experts/etc. This is just one example where non-advertiser content will be king. And as long as content like this remains (and it always will), advertising will always be useful. There's too much data out there on the effectiveness of advertising that proves that anywhere there are eyeballs, there are still going to be advertisements.

We'll certainly start to see more interesting marketing outside of the traditional channels, but I don't believe this is going to adversely affect the "traditional" internet advertising model at all.

[Ghetto Gates]

User-controlled Social Video Advertising + Instant Metrics that support video commerce. Blip'd is the model that everyone has been trying to figure out. Take the time to check it out blipd.com

[joaquin]

This sounds familiar as in 1999....

[Doug Simon]

Steve,

You echo one of my predictions for the New Year when I said that "social media video releases and B to F marketing will become common buzz words." But from what you are saying is that this has already taken hold: we have moved beyond the "buzz word" phase. Not only that, the thinking has gone beyond mere web video and we are applying social media tactics to all forms of traditional media. Just as every media outlet will eventually fall into the "social media" category, marketing and content will eventually fall into a similar, uniform category.

Doug Simon, http://www.dssimonvlogviews.com

[ian fenwick]

Surely the role of the media used to be to aggregate content to form programs and series of programs that attracted audience attention. Similar to the way distribution channels break bulk and assemble variety: rather than stop-by P&G warehouse, Lever warehouse etc etc we go to the supermarket. So instead of watching a P&G vdo here and Lever vdo there we went to the TV.
But now, I can assemble my own feeds, and visiting the P&G and the Lever and the ...and the... can be routinized...until I finish up with My Channel....so I think content will be atomized and probably provided directly by the advertisers