The Commoditization of Advertising

Earlier this year, I gave you my 2006 predictions. One was that ad servers would extend their reach to new channels. I was thinking of the new advertising outlets being developed as digital media when I made that prediction, but a couple things are happening that put an interesting twist on the story.

One thing that’s separated large advertisers from small is the ability to afford to create and place ads in the mass media. But soon, it will be easy and affordable for any size company to use TV, print, and other media to reach their audience. Digital specialists such as Google are making it easy for small advertisers to place ads in traditional print media. This story is well covered, so I won’t go into it here.

New entrants such as Spot Runner make it easy for small advertisers to create ads and place them on TV. The Los Angeles-based startup was launched last month to help companies create TV ad campaigns that can be repurposed across any digital medium for as little as $500 and in less than a week’s time. Spot Runner is able to deliver these commercials economically and quickly by utilizing a library of stock ad templates that a small, local business can customize. Additionally, it has a Web interface for local advertisers to easily place their spots in local or regional markets, a task that’s usually time-consuming and difficult.

We had a lively discussion inside my agency about what this means in the short and long term. In the short term, we feel it will lead to the commoditization of commercial creative and media placement at the lower end of the market. In many cases, the quality will improve because really small advertisers will have access to capabilities they couldn’t get before. The danger is the ad playlist will be bland and boring because stock imagery usually gets caught in viewers’ authenticity filters.

Long term, more advertisers will pump out ads targeted at an already overwhelmed target audience. But these targets, who already feel hunted, will continue to build walls and use filters to avoid interruptive, irritating messaging. Over time, the market will bifurcate. Major advertisers will continue to up their game by creating richer, more engaging brand experiences. They will seek out placement opportunities that are exclusive, unique, and very relevant. And that’s where we want to play.

I’d like to hear from you about this prediction. What do you think this means for traditional media agencies? For ad servers? For creative shops? How will consumers respond?

Meet Mark at Search Engine Strategies in New York City, February 27-March 2.

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