Thursday, July 25, 2013

The evolution of digital and the devaluation of advertising on it

I don’t know about you, but I am beginning to suffer a little bit from digital evolution overload. I am all for progress but to me it is beginning to feel like there is just too much being launched without there really being any thought to whether it fulfills a basic human or business need, utility or solution.

Perhaps it is because of the heat wave that my brain has switched to skepticism mode. Perhaps it is because so many new apps, tools, services and the like all seem to have a name ending on “r” (Tumblr, Flickr, Crushr, Flushr, Pinheadr, etc. And it turns out I only made a few of these up…). 

Perhaps it is because many of the options have, even if they have great consumer utility, no idea about what they need to offer an advertiser in order to be taken seriously as an ad platform of any kind.

Here is my take on how the world of digital has evolved:

As you can see (and experience every day), what started as a computer revolution is now becoming an all-encompassing digital takeover of life.

We are no longer necessarily tethered to a desk with a computer; the Internet of Things is basically here with connected devices ranging today from glasses, watches, cars, tables, refrigerators and TV’s, and tomorrow pretty much everything else. We can and will have access to everything, everywhere at any time on our device of choice or convenience.

And from an advertiser perspective you could argue that diversity and competition is good, right? I am not so sure. In my mind, the growth of ever more platforms, solutions, apps, options and choices is simply beginning to be too large. As a result, both consumers and advertisers might start to retreat and choose only a limited number of (in their mind) relevant options, leaving 90% of what is out there to fight over crumbs of attention or ad dollars.

Compare this to the growth and subsequent demise of the plethora of newspapers (every town used to have its own, or more than one!), magazines (you name your interest and there was at least one title catering to it), cable and satellite TV (the famous "500 channels and nothing to watch" quote).

There is already quite a bit of chatter around Facebook losing some of its users and time spent. They are a classic example of the evolution described in my simple model above.

When Facebook launched, their sole audience were college students. It was “their” network, with content relevant to them, coming from those that they wanted content from. It was worth their time and they chose to be there. It created a highly engaged audience.

Today, it is THE global network, with content relevant for everyone and anyone. As a user, I have to do a lot of filtering to only get what is (mostly) relevant to me. The content being shared with me comes from so many, perhaps too many (because, let’s face it, you don’t really have 500+ friends now do you?). The shared content now also includes a steady stream from “uninvited” sources in the form of sponsored posts and content (even if they are, allegedly, tailored to my profile).

So Facebook now has become, at best, a diversion. The compelling proposition of “me” has been watered down. And even though their advertising revenues are at last growing, the horde of platforms potentially nibbling away at Goliath is growing as well. And the number of kids choosing not to participate is growing, too.

It is a little like the cord cutting movement (people disconnecting or not signing up for cable or satellite TV as they get it through the internet). It is not huge, but it is happening. My prediction is that it will continue to grow as technology and bandwidth grows. And with Google's latest dongle you can now stream anything from your laptop or tablet to your TV for $35 (they should have called it Donglr, obviously).

So going back to the advertiser predicament. What to choose? Where to place your bets? I have said many times that the role of a connection planner is that of an investor. Your role is to place the budget in such a way that it delivers the highest possible ROI for the brand. The problem is that 75% of all the options out there do not deliver any kind of (relevant) data that will give the advertiser a sense of (even false) security that the investment will deliver something akin to ROI.

Let's be honest, how many advertisers or agencies are going to (be able to) figure out how to divide their ad dollars using the full potential of the Conversation Prism as recently updated by the always insightful Brian Solis? (download the prism here)

The promise of Big Data has certainly not delivered any real solutions yet (see my earlier post on this). So in the second installment of this story, we are going to explore what to do. What will be the advertisers’ answer to the evolution described in this article? And then we will at some point also explore how to evolve from the Mad Men era to something more appropriate for the i-everything man era?

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