A typical article in an advertising trade publication will feature the word revolution. If the writer is in a less benevolent mood, he or she will use the word evolution. An outsider to the industry can be forgiven for thinking that we are a highly disillusioned group of people who have been just been told to eat cake. That or we are research fellows at the Museum of Natural History.
Looking back, there were indeed revolutions (and evolutions) in the field of online advertising in the first decade of the 21st century. Google was one. The explosive growth of social networking was another. And no one (not even Al Gore) saw either of these coming. Modern society, more often than ever, is dominated by "black swan" events -- high-impact occurrences that no one can predict.
That said, it is safe to say that the decade ahead will see the emergence or acceleration of some of the following trends:
A continued shift of advertising dollars from offline to online media
In recent years, the growth of dollars from offline media has only accelerated. According to a March 2009 eMarketer report, offline advertising is expected to grow by 8 percent in the 2010-2012 time frame. However, in the same time period, online advertising is expected to grow at 45.7 percent, to an impressive $51 billion. All of this growth will come at the expense of offline advertising.
It's not just direct response marketers that will cause the shift of dollars from offline to online media. Even brand marketers will turn to online media to make unique and relevant connections with consumers.
In an article in The New York Times, "The New Advertising Outlet: Your Life," Trevor Edwards, Nike's corporate vice president for global brand and category management, said, "We're not in the business of keeping the media companies alive. We're in the business of connecting with consumers."
As brand marketers continue to harness the interactivity of online media, and speak to consumers based on their individual preferences, the shift from traditional offline media to online media will only accelerate.
A continued shift toward more ROI
It's not just the recession. Even during the good times, advertisers have always reached for greater returns on their advertising dollars. In fact, the history of online advertising can be narrated as a quest for greater returns.
In the early days of the internet, advertising was largely sold on a CPM pricing model. All of that changed with Overture (and later, Google) offering advertising on a cost-per-click basis. It would be an understatement to say that this value proposition resonated with advertisers. In recent times, advertisers have moved a portion of their advertising dollars ever higher up the ROI ladder, from CPM and CPC to newer pricing models like CPE (cost-per-engagement) and CPL (cost-per-lead). Like Imran Khan, managing director of J.P. Morgan, said, "The internet is more and more a performance driven model."
There will be more consumer engagement
Let's state the obvious here: The interactivity of new media allows consumers to express their preferences, likes, and dislikes in a way that was never possible before.
In the excellent documentary "Helvetica," design critic Rick Poyner points to the proliferation of social-networking websites as examples of where people are using graphic design to express their individuality and discusses how this will drive changes in the way new fonts come into being.
If obscure industries like typesetting can see and react to the winds of change, then surely the advertising industry can't be far behind.
Be it websites, social networking sites, Twitter, two-way digital TV, mobile, or email, the coming years will see the growth of media that allow brands to interact with consumers and develop an understanding of their preferences.
The growth of media-agnostic advertising platforms
Consumers are increasingly spending time across multiple media. According to a February 2008 IDC study, consumers spend twice as much online as they do on TV. In addition, 88 percent of consumers have one or more mobile devices. People carry the internet around in their pockets -- an eMarketer study found that 108 percent more information was consumed in 2009 as compared to the previous year.
If consumers are able to switch effortlessly among different media, then why shouldn't advertisers? The next few years will see the emergence of media platforms that allow advertisers to buy media across multiple media vehicles from a single point of connection. Sure, there are many companies that do this today, but they are more the exception rather than the rule. This will change.
Integrated tools for advertisers, publishers, and consumers
The coming decade will see the increase of openness. Different advertising platforms will be able to talk to one another. Advertisers and publishers will be able to get a holistic view of their campaigns across online, mobile, email, and social platforms. Consumers too will benefit by being easily able to opt in and out of advertising messages they want to see.
There will be many variations on these themes. In addition, there might very well be something that comes completely out of the blue and storms our imagination: a genuine, bonafide revolution. I look forward to it.
Zephrin Lasker is CEO and co-founder of Pontiflex.
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