No Control, No Rules, Few Business Models

Nobody ever called direct marketing easy, but more measurable ways of selling things are beginning to look mighty simple compared to the current interactive advertising and media environments.

Consumers are in control. There are no rules. Those were the resounding messages at ad:tech this week. Not big news, perhaps, but certainly an indication that advertising 2.0 presents just as blank a slate as online advertising did back in the early days of Web 1.0.

BBDO North America chairman and chief creative officer David Lubars opened the overstuffed event with a keynote in which he pooh-poohed the very notion of rules. Instead, he advocated being simply brilliant, “so brilliant that work just spills out.”

Most of the heavy-hitting speakers danced around the elusive engagement metric, instead advocating getting consumers to spend quality time with advertisers’ products. Lubars opined, “If anybody thinks something is cool, they’ll engage voluntarily. Time is the most precious thing anybody has.”

Sarah Fay, president of Carat’s Isobar, echoed Lubars’ notion of creating quality time with brands for consumers. She cited work for client adidas. A MySpace page was created for the brand, which made 55,000 “friends” on the social network.

Not huge numbers, she admits, but hopefully it’s an influential audience. “We’re trying to get our arms around how to look at all this, and how to play off it, too.”

At least the notion of time is more concrete than engagement, very much the topic of ad:tech a year ago. But add consumer-generated media (CGM) to the time mix, and the waters muddy again.

Procter & Gamble’s Ted McConnell, interactive innovation director, nailed it (as he so often does). Deciding how much control of your brand to relinquish to consumers is like “deciding how much money to give up when you have a gun to your head,” he bluntly stated.

In an ad:tech panel I moderated on social search, Technorati’s chairman Peter Hirshberg showed off campaigns the blog search engine is powering that actively encourage consumer input and debate, positive and negative. Many of these center around intrinsically controversial topics that are fueled (and sold) by debate. Shut Up & Sing, the documentary about the Dixie Chicks anti-Bush sentiments, is the perfect example.

In real life, most advertisers don’t want to convince consumers theirs is the most controversial product, they want to convince them their offering is the best. What about that classic of reputation management, I asked Hirshberg, running a search on your brand name and the word “sucks”?

“It’s a really bad time to make a product that sucks,” he wisely countered. “You shouldn’t run from this conversation… You should join in it, and do so authentically. Avoidance won’t help.”

Online Matters More Than Ever

Issues such as control, engagement, metrics, and strategy are more up for grabs than ever in interactive advertising. Meanwhile, they’ve never mattered more. These issues were debated at ad:tech this week against a backdrop of true, irrevocable convergence.

Ad dollars are indisputably flowing into interactive now because that’s where the eyeballs (and time spent) are. Newspapers just marked their fourth consecutive decline as U.S. daily circulation fell 2.8 percent and Sunday papers slumped 3.4 percent during the six-month period that ended in September, according to the Newspaper Association of America. Online revenue for these publications, meanwhile, is nipping along at an extremely healthy 25 to 30 percent annual growth rate.

No wonder Google this week pulled its print program out of beta. It announced a line up of 50 traditional newspapers and print publishers, including “The New York Times,” “The Washington Post,” Gannett, “The Seattle Times,” “The Philadelphia Enquirer,” and The McClatchy Company.

Television broadcasters, meanwhile, are increasingly Web dependent. Just the other day, CBS replaced the head of its digital division, Larry Kramer, with acquisition-oriented Quincy Smith. At the same time, CNN USA’s chief Jonathan Klein told an ad:tech audience that all of the network’s online video inventory is sold out through the fourth quarter. The priority is to create more inventory. “You can really think of the Internet as a prime delivery vehicle for CNN,” he remarked.

Why the major broadcasters are racing to get their interactive offerings in order is obvious. Questions surrounding financial models persist, however.

Robust growth in online ad revenues help sustain the flagging newspaper industry, but not enough to offset the overhead of running a print publication. Will Google’s auction marketplace for print help — enough to counter the lost print revenues and readership?

That same model can be applied to broadcast as well. CNN may be selling out its video inventory on the Web, but it’s doubtful that brings in enough to cover round-the-clock Iraq coverage. CNN doesn’t produce as much saleable content as the networks (think “Lost” episodes on the iTunes store for $1.99 a pop). Does that alone cover the nut?

Both the media and the agency sides of the equation still seem to have their work cut out for them when it comes to selling people things in digital environments. No one has real solutions. And that’s what keeps it all so very interesting.

Meet Rebecca at Search Engine Strategies in Chicago, December 4-7, at the Hilton Chicago.

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