The Future of Online Advertising

The latest report from Jupiter about the future of online advertising is basically a “good news/bad news story.”

The good news for marketers is that online ad spending is expected to grow to U.S. $16.5 billion by 2005, mainly at the expense of direct marketing and newspaper budgets. And it makes sense that online ad sales are growing: More people are coming online, spending more time online when they get there, buying more stuff online (from traditional as well as online-only retailers), and have a lot more opportunities in the future to interact with more “experiential” branding via broadband, enhanced TV, and wireless.

Good news for us in the biz, right? So what’s the bad news? The bad news is that if you think the space is noisy now (as far as consumer-direct messages are concerned), your audience ain’t seen nothing yet.

The new Jupiter report predicts that the average web user can expect to see more than 950 messages per day, nearly double what he or she sees now. The good analysts at Jupiter counsel us that, in order to cut through the clutter, “more diverse ad models” will be necessary to cut through the noise. I say they haven’t gone far enough. I think we need to completely reconsider what “advertising” means if we’re going to be heard by our target markets in the increasingly noisy future.

If you think about it for a minute, the Internet has really thrown a wrench into the machinery we call “advertising.” On the one hand, we’ve got banner ads and email as ways of pushing out messages to consumers. Most media people I know, regardless of how Net-un-savvy they are, don’t have a hard time conceptualizing how these things work. Banners are just another form of buying space, and email seems to be yet another form of direct marketing.

But on the other hand, there’s a lot of stuff that doesn’t fit into the traditional models. Take web sites for example. Are they ads? Well, yes…kinda. Do they provide business-critical functionality? Yes, in many cases. But then these web sites start throwing some wireless stuff into the mix, and the waters start to get really muddied.

If we’re going to start crafting strategies that are going to make an impact in the increasingly noisy media space the consumers of the future must occupy, we have to start re-examining what it means to advertise. We’re going to have to really start looking beyond the medium the messages are contained in and start crafting plans that meet the consumer where they are. That means coordinating new tactics that combine the best features of all media.

Traditionally, cross-media campaigns are usually designed to direct attention to one specific place. Print campaigns for web sites are designed to drive traffic to the site. Same with direct mail, banner campaigns, and email. The purpose is to get people to stop what they’re doing and go do something else. The end-game is the site: Get people there and they’ll buy, interact, and learn. It’s a one-way arrow directing the consumer to a point of interest. Traditional campaigns work the same way, with the goal of increasing brand awareness and, eventually, purchase of a product or service.

In the message-choked world of the future, the end result will necessarily be the same – purchase of product or service at some point – but the arrow might not be as straight when it comes to getting the future consumer to that point. The one limited resource we have is attention, and grabbing that attention and holding onto it is going to be vital for success. The goal should be to build loyalty by immersing the consumer in the brand and providing goods and services that keep them coming back. To do so is going to require working across media at all times.

“Sure,” you may be saying, “that’s what we call integrated marketing.” And you’re right. But if you look for good examples, it’s tough to find any. Why? It all comes down to our definitions of “advertising” and how that definition drives budgets. Ads (as we traditionally know them) or direct mail (either e or snail) live in the marketing department. Web sites often straddle the line between IT and marketing. Budgets are set early and arbitrarily: X goes to the web, while Y goes to “advertising.” To truly go cross-media, we have to look at what we’re trying to accomplish and THEN set budgets, not the other way around.

If you’ve ever been through anything like this, you know it’s a tough fight. But in order to get to the future consumer who’s bombarded constantly by commercial messages, we’re going to have to find ways that cut through the clutter. Simply putting a message out there and hoping it sticks is going to become increasingly difficult if we arbitrarily assign budgets before we understand where they’re going to do the most good. Working from the outside in (the consumer) is the only way that we’ll continue to get more of a bang from our ever-increasing bucks.

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