Ad, Interrupted

The single most powerful force in business is the disruption.

The disruption is what big companies worry about and small companies dream about. It comes quickly, sometimes unpredictably. No one’s immune and precious few are even aware when it starts to happen. The disruption is the thing that forces us all to be good and keep our eyes open.

The only problem, of course, is knowing it when you see it.

Strictly defined, a disruption is something that forces all the businesses in a particular category to immediately and dramatically rethink their offerings. Sometimes the disruption happens because of a particular product introduction. Apple’s launch of iTunes and the iPod disrupted the music space. Sometimes, it’s simply a shift in culture or consumer interests. The craze (and eventual crash) of low-carb diets did this to the food industry.

The ad industry, of course, isn’t immune. We’ve been struggling with a series of upheavals and reshufflings ever since those darn kids in Illinois released Mosaic, spreading the graphical Internet around the globe. But we’re more than 10 years past that moment, and I don’t know if we’ve completely sorted out what ended, let alone what began, at that point in our history.

But clearly, the advertising industry has been existing in a disrupted world. There are flashes of brilliance in this new world, but I honestly don’t know that we’ve clearly established the new way to operate. This isn’t necessarily a problem, but we do need to realize we haven’t sorted it out just yet.

Let’s take a moment to identify the five forces that are disrupting advertising:

  • The broadcast breakdown. This is the oldest story in interactive marketing; we went from a world of three TV stations to zillions of channels. It’s an oft-told story because it’s true. As channels fragment, targeting gets more challenging. Efficiency goes away, prompting a rethinking of both the methods and the means of messaging.

  • Consumer data availability explosion. As more everyday tasks, such as looking up phone numbers, researching vacations, and thinking of baby names, move online, tons of data are generated. All these data are slowly getting standardized and shared in such a way that consumers are now starting to move around the Web and world in a data bubble. This new element of the environment disrupts much of our thinking in how we address consumers. This data bubble allows advertisers to adjust relevance on many levels, including messaging and even pricing.
  • Amplified consumer voices. One of the accepted truths of advertising was always that it was a one-way street. Advertisers got to do the talking; consumer’s didn’t have to listen, of course, but they sure couldn’t talk back. That’s not the case anymore. In fact, its apparent that consumer voices are a primary driver of e-commerce (in the form of customer rankings and reviews). This disruption is barely being managed by the ad industry, but it’s the most important trend in at least 20 years.
  • Content mobility. The untethering of content from its traditional moorings has a profound effect on how ads attached to that content are consumed. Space and environment factor into the attention and reception of ad messages. It’s been demonstrated (and long known) that TV-watchers feel some guilt about the time they spend in front of the box. They assuage this guilt during commercial breaks by doing some stuff around the house. What happens when TV content is consumed on the road via Slingbox or on the train via a mobile phone? As we leave the living room, we must accept the fact content is perceived differently.
  • Rise of the offer. Paid placement listings on search engine results pages aren’t ads so much as they’re offers. That is, they’re a response to a particular request and their job is to channel demand. This is a markedly different task than a banner ad for a new luxury car. There, the task is to generate (or at least stoke) demand. The offer model is beginning to spread past search, thanks in many ways to Google’s ambitions and acquisitions. We’ll see more media opening up to offers rather than ads. This means inventory placement and pricing will shift, which will in turn shift budgeting and measurement.

Disrupt or Be Disrupted

These five trends are changing the underlying fundamentals of the advertising industry. Remember, they aren’t a result of sun spots or shifting gamma rays. They are a result of the work each of us does by ourselves. We’re the disrupters as well as the disrupted. The advertising industry values creativity above all things, and nothing’s more interesting than creating our own industry.

The way to be successful in a disrupting world? Simple. Get into the disrupting business yourself.

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