Is Online Advertising a Disruptive Technology?

 

I was confused. About a month ago, I attended an Internet advertising conference where I heard the phrase, “disruptive technology.” It was mentioned during a panel discussing behavioral targeting, ad networks, and desktop/adware programs. I thought, “Oh, I get it. ‘Disruptive technology’ is the new euphuism for adware to help disassociate it from spyware.” So there I was, thinking I’d write a column on the latest in adware.

Delving further into the phrase, I found it means something quite different. According to Wikipedia, coined in 1997, a disruptive technology is:

A new technological innovation, product, or service that eventually overturns the existing dominant technology in the market, despite the fact that the disruptive technology is both radically different from the leading technology and that it often initially performs worse than the leading technology according to existing measures of performance.

That doesn’t sound like adware to me. I wanted learn why this term was even being used on the panel.

As I started talking with the some of the companies represented on the panel, I received empathy for drawing my initial inaccurate conclusion about disruptive technology and adware. “Yeah, a consumer could perceive a pop-up, an interstitial, or any kind of overlapping ad as disruptive,” offered Nick Johnson, SVP of business development and general manager of account strategy for Revenue Science. “But adware is not a ‘disruptive technology,’ and it’s unfortunate that advertising perceived as literally disruptive was being discussed on the same panel as behavioral targeting, which we’re defining as a disruptive technology.”

Those referencing the Wikipedia definition to describe their behavioral targeting technology boiled their cases down to something like this: Behavioral targeting is most definitely a disruptive technology because it’s turning advertising on its ear. Unlike ad targeting before it, behavioral targeting focuses on behavior rather than on demographics.

“Ten years from now, the majority of marketing will be based on behavior,” prognosticated Scott Eagle, CMO of Claria. “Isn’t that both radically different and likely to overturn the existing technology?” (A recent column by fellow ClickZ columnist, David Rittenhouse, though, may contradict the notion that behavioral targeting is something new.)

“Sure it is,” I replied. “But in the greater sense, isn’t all of online advertising?” Granted, behaviorally targeted advertising has proven effective. The advertising industry had better pay attention, because behavioral targeting should play a significant role in the media mix, much as search must.

Let’s break it down further. Internet advertising as a whole is radically different from offline advertising, as any traditional media buyer trying to make the transition will tell you. It’s changing the way ad agencies and media planners must think. When big-brand, big-dollar advertisers demand more online advertising inventory, whether search, behavioral targeting, or premium home-page placements, and moving 20 percent of their ad budgets accordingly, a seismic shift is in the works. When consumers are more in control of their exposure to ads than ever, you can be sure advertising must change. Logically, when developing ad technologies specifically to address these kinds of consumer controls, something radical is going on.

Why would online advertising, after at least 10 years in existence, only now be so respectably defined as a “disruptive technology”? Maybe because, after years of being considered as everything from flash in the pan to a dismal failure, Internet advertising no longer suffers from the Rodney Dangerfield complex. It’s earned its stripes and, in fact, made the advertising world reconsider the way it reaches consumers.

I loved hearing Johnson describe his take on the ad agency of the future: “The heart, soul, and brains of the agency needs to shift. Media will be taking more control. More and more, media will be the core of the agency, and the media buyer will need to play a greater role in total strategy than ever before.” His words echoed a column I wrote on this topic. So critical will the online media buyer’s role be, suggested Johnson, that “tomorrow’s chief marketing officers [are] today’s Internet media buyers.”

 

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