Where’s Digital Advertising Headed?

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” –Winston Churchill

The more time I spend focused on the inner workings of the industry, the more I believe we’ll see more change than is commonly thought. Churchill spoke with great hope for the emerging world order of his day in the above quote. Yet I believe what we’re doing today is just the beginning of the beginning for digital advertising.

I say “digital” instead of “online” advertising because people equate “online” (rightly or wrongly) with the Web. We’re about to see a media explosion, a seismic shift in the way we deliver all existing media (TV, radio, outdoor, and, yes, even print). As all media are delivered via IP, we’ll begin applying all the knowledge learned over the past few years in online advertising to the emerging digital advertising landscape. All media are headed this way, albeit some sooner than others. The 600-lb. gorillas, TV and radio, are headed there first.

TV will be delivered in an increasingly nonlinear fashion until eventually no linear content broadcasts remain. TiVo and other DVRs are just a simple bridging technology. They allow viewers to break an unfortunate model they simply don’t prefer and slice linear broadcast media into chunks that are time-shifted to correspond with their own schedules.

Yes, we’ll still see live events broadcast as they happen. News will have to cover events in real time (maybe more so, in many cases, to compete). Other content is currently only delivered in a broadcast format because it was the only method available when TV was invented. It was also a logical extension of radio, which was a single linear stream of sound.

If all media will eventually be delivered in a nonlinear format, which means the end of “broadcast” media, all advertising will be dynamically served, just as we serve Web-based ads today. This means massive shifts in the way advertising is planned, bought, and sold. Massive for the offline guys. For us, it’s just an extension of what we’re already doing.

Consider this. If Web media’s complexities are daunting to marketers who are just testing the waters, what will happen when every piece of their marketing budget is handled this way? It won’t fly. Online advertising’s complex landscape and negotiation tactics are simply not up to snuff.

So this column is a call to the technology providers to take their cues from the upshift in the current market landscape. Technologies languished during the past few years of market downturn. Most, frankly, are sorry shadows of the promise we saw back in 2000. The core technologies we built to serve ads, plan and manage campaigns, handle sales, implement insertion orders, and, perhaps most important, report results have been underfunded long enough. The industry must begin to focus on these platforms with an eye to the media future. It must create technologies to easily handle the transition to nonlinear video (and audio) ad insertion and become ready to handle the media shift.

Atlas certainly isn’t standing still. It announced a new VOD (define) ad solution and a partnership with Sea Change in the past weeks. Atlas should be applauded for seeing the potential of the industry’s evolution. We should all focus on seeing this type of vision through to completion.

At AD:TECH in San Francisco, the VOD panel was packed. Hopefully, this mean others see the importance here. The good news so far is VOD advertising is similarly priced (in CPM terms) to the same ad spots when the content ran as first-run or primetime programming. Justification: viewers watching on-demand programming select their own, personal primetime.

If this kind of thinking is nurtured and made pervasive among traditional media people, we’re looking at a whole new media buying world. It would be much bigger than “online advertising.” It’s not about the Web anymore. It’s about all media becoming digital.

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