Thursday, October 29, 2009

Bringing advertising back to the future

There is a growing sense that advertising will soon be dead as a major way to fund news and many other content services. I suggest that reflects not the true direction of media technology, but just a temporary gap in such technology.

Today's conference on "Creating a New Model for News and Information" had a very interesting discussion by luminaries in the news business addressing the apparent reality that advertising could no longer support their media, and how new models are needed.

That is a major issue in the short term, but advertising will be reborn as a key source of funding as technology improves.

The problem is that current "new" media do not present ads in a way that effectively serves the reader. Screen real estate is limited, and there is no place to include ads that are rich and informative without seriously detracting from the content. But what is forgotten is that that will change, as technology improves.

Unlike Web pages, newspapers and magazines were able to present very compelling ads adjacent to content, without detracting from the content.
  • Their weakness (as Wanamaker is famed to have noted) is lack of targeting. Targeting is still reasonably good in special interest sections and trade magazines, but such special interest content has heavily migrated to the Web.
  • I have always been struck by how in trade magazines and special interest magazines, the ads can often be as valuable as the content. Even on TV, ads can be better than the content. In visual media, advertising is not necessarily a negative -- it can be a positive to the viewer.
  • Internet media have greatly improved targeting (look at Google), but have lost richness, at least on the surface (look at Google). They match (and even add) richness only when you bother to drill deeper by clicking a link (or doing a mouse-over).
How will technology change that?
  • Think back to newspapers and magazines: They have enough real estate to let content and rich ads have effective adjacency, while still conveying a substantial message.
  • Think about emerging screen technologies: ever larger screens, ever lighter and more flexible -- literally more flexible, as OLEDs enable large screens that fold up -- that will mimic newspapers and magazines within a few years.
  • (My suggestions for "Coactive TV" also provide expanded real estate in the form of a second screen that can be coordinated to show ads related to the first screen.)
Once we have such screens, we can revive rich ads, plus add a new layer of personalized targeting that print media never had. When that happens, ads can be immediate, relevant, interesting, and informative -- more than ever. We will have targeting, immediate surface richness, and hyperlinked depth. With that, ad-funded distribution will again be a powerful engine for revenue -- and a desirable experience for users.

Of course the media need to survive in the short term with less (or no) advertising, but don't be blindsided when ads are reborn!