There are a few different people and companies who have a claim to inventing radio, but the most compelling one for me has always been AT&T. About a hundred years ago, a couple of researchers in their lab proposed a system where the broadcast from one tower would be picked up by another tower and repeated, all the way across the country. They essentially described the first real nationwide network where a single message could be heard simultaneously by many people, across great distances.
I think they get the title of the Fathers of Radio because they proposed not only the system, but also its use and business model. In an article, they described radio as being used to transmit news or music to the masses, as well as noted that doing so would be expensive and someone needed to pay for it. They suggested that the owners of the radio towers approach local businesses and sell time during which commercial messages could be broadcast. By the way, they also suggested that these messages should add value to the broadcast and not be distracting.
At the moment that radio was created, so was advertising. Or, at least, at the moment radio was created, the business model that tied advertisers and content providers together was created, along with a clear warning that, should advertisers get too pushy, the whole model would sink.
And so it has been ever since, as advertisers and publishers have found ways to either work together or push against one another in the development of all media, from broadcast to interactive to social to mobile.
This week, we saw another major move with the media agency Starcom hooking up with Yahoo, in a deal that promises to use big data to weave relevant ads into targeted content.
It is worth taking another step back and looking at the relationship between publishers and agencies and how it is shaping advertising. The most important relationship, bar none, is the one between the agency and its client. Closely tied to that relationship, however, is the one between the agency and the publisher and as we'll see, the publisher and the brand. The good news? All of this is generating some new creative tension in the market that promises something exciting.
The New Relationship Models
The old relationship model between agencies and publishers was easy: buyer and seller. Today, that is a bit more complex, and we see a few new models emerging.
Brand as Publisher; Publisher as Gatherer
This is practically an old story by now, but brands have fully come to realize that they can create their own content and post it up. This is a lot of what happens in social media and on corporate blogs as brands seek to become thought leaders or conversation gathering spots for their consumers. This, of course, cuts the traditional publisher out of the picture.
However, once a brand puts up its own content it needs to attract their audience. This creates an opportunity for publishers to offer channels that will get content a wider audience. Many publishers now allow for brands to place their own content on a site--clearly marked as sponsored--from a brand. Here, the publisher is leveraging their audience, rather than their editorial staff.
Publisher as Data Supplier
Publishers create content--stories, videos, games and so on--and people consume that content, based on their individual tastes and preferences. If a publisher has a broad enough array of content, they can begin to identify and segment people based on their interests. This is at the heart of the Yahoo/Starcom deal.
Yahoo has an enormous amount of content, from sports to celebrity gossip to stock news to world affairs, and the majority of people consuming this content have a profile and are logged in. This creates a massive data pool that can be marketed to brands and used in a myriad ways. The easy way is targeting. The deeper way is an understanding of consumers more completely, as whole people. Publishers as the suppliers of data to create more finely-tuned content offerings is a big wave rising in advertising today.
Publisher as Agency
This one has been a challenge to the agency model for many years. It has not cracked the model, but is definitely disruptive. Publishers are good at making stuff that people want to see, play and enjoy. They just are; that's their job. So why don't they just do that for brands (they think)? This is the native advertising revolution and we are in its midst. Publishers see the opportunity to interact directly with brands and build things that are not only highly customized, but fit right into the environment.
Publisher as Platform
This last one is really the biggest change of them all. Publishers have long been like those radio tower owners--they owned not only the content, but also the technology that the content was broadcast on. Today, we have an entirely new model: publishers who really just own the technology.
Consider Facebook as a publisher. They don't actually publish anything themselves. However, they create a platform upon which not only content can be published, but brands can directly interact with their consumers. This is the ultimate new play--the publisher who doesn't need to write anything, but still gets all that content on its system and gets to collect the data.
It's a pretty remarkable new world that is slowly emerging. I see that the Yahoo and Starcom deal is only for one year. I don't pretend to know the inside details of any of this, but I do find it a sign of the times that a big experiment is on such a short timeline.
Clearly we expect things to be even more different in 12 months.
Title image courtesy of Shutterstock.com
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Gary Stein is SVP, strategy and planning in iCrossing's San Francisco office. He has been working in marketing for more than a decade. Gary lives in San Francisco with his family. Follow him on Twitter: @garyst3in. The opinions expressed in Gary's columns are his alone.
March 19, 2014