In the first of three parts, Dave Chase of the Altus Alliance looks way ahead to the advertising landscape we'll see in five years.
As a new year starts, it's usually a time to look back and reflect, as I did here in the iMedia Connection newsletter last year, but it's also a time for predictions for the year to come. Taking a different spin on this theme, I thought I'd project where the ad industry is headed and what January of 2010 (or sooner) might look like. iMedia Summits are a time I often speculate with some of the smartest people in the industry regarding the impact internet-based advertising tools will have on the broader advertising industry. This three-part series will take those discussions a few steps further.
First, we'll look at a scenario that is likely to be common by 2010, when the heretofore separate worlds of TV advertising, search marketing, behavioral targeting and inventory yield management blend together. If you buy some of this scenario, it's interesting to look at the implications for ad agencies. Then, I'll speculate on the likelihood of Google being the biggest "ad agency" in the world. If you look through the prism I lay out, it might cause you to think differently about where the industry is headed -- whether or not you agree with some of the specifics.
Search, Behavioral and Yield Management: an alchemizing effect on TV advertising
The accountability and efficiency of search marketing, behavioral targeting and publisher inventory yield management can look pretty compelling to a media planner, particularly when compared to the relative lack of trackability of a TV spot today. What happens when you combine the best of these worlds? Let's look at a scenario that might take place when these worlds collide.
It may be easy to write this off as the ramblings of a guy who has spent too much time in the technology industry, but before you do that, consider the following:
- All major search engines keep a search history indicating your interests, needs, likes, etc.
- Forrester projects that over half of TV households will have a DVR device by 2009.
- Today, most DVRs keep track of what we could be considered a "search history" of everything that your household has watched and what you plan to record in the future.
- With your implicit or explicit approval, that "search history" of your TV behavior could be combined with your online search and surfing behavior which would create a profile that would be quite precise regarding your preferences and interests. Whether one company delivers all of this technology (e.g., Microsoft or AOL) or a deal is done between DVR suppliers and search engines, this can easily be accomplished.
- Most people's broadband internet access is provided by cable companies today. Setting a cookie applicable to both the TV and internet access is relatively trivial.
- TACODA, a leading behavioral targeting company, has over 80 percent of the North American internet audience in their network. They have a wide variety of non-personal demographic information about their users.
Hypothetical Case Study: Mike and Jill
So let's fast forward five years and look at a scenario with a couple in their late 30s: we'll call them Mike and Jill. Periodically, they talk about the need for a vacation but have had a hard time agreeing on a location. Jill's idea of a great getaway is a spa weekend with mud baths, cucumber bodywraps, aroma therapy and countless other treatments that sound like some form of torture to Mike.
Meanwhile, what Mike would really like to do is make a trip to a Final Four, as his alma mater is in the Top 10 and he's sure they are going to make it a long ways in the Big Dance. (Whenever he talks with his buddies about the Big Dance, Jill is confused: Mike has never liked to dance.)
One thing they can agree on is that they enjoy watching "Alias" together, although they are watching Jennifer Garner for different reasons. The rest of Mike's TV viewing largely consists of watching ESPN, Fox Sports and ESPN2 so he can be smarter than his buddies when it comes to filling out his bracket. Meanwhile, Jill loves watching the Travel Channel and shows on other networks about getaways -- whether they are about romantic getaways or weekends with the girls.
During the week, Mike often eats his lunch at his desk while reading some of his favorite websites (http://www.foxsports.com/, http://www.espn.com/, etc.). He's checking out the latest rankings to see where his alma mater is ranked and analysis from experts on the "Road to San Diego" (the site of the 2010 Final Four). He notices one of the ads on the webpage he's reading is about a San Diego vacation. Although he's never been to San Diego, he knows it has a nice climate and gets a bright idea. Mike can kill two birds with one stone if he suggests that a trip to San Diego would be a nice place for a trip with Jill and another couple friend (the husband of that couple also happens to be a college buddy who enjoys hoops as much as he does). Suddenly, the $500 daily spa fee doesn't sound too bad for Mike if it means he can attend the Final Four.
Since Jill had Arizona in mind for a spa weekend, he figures he needs to sell Jill on San Diego. He surfs over to his DVR home page to see if he can find some shows that highlight San Diego that he can record for Jill. It turns out one of the shows is in 30 minutes on the Travel Channel so he's able to record it for later viewing even though he and Jill aren't home at that moment. It also turns out that one of the past episodes of "Alias" had Jennifer Garner's character incognito at a beach party at the Hotel del Coronado in San Diego (she snuck into the private party by swimming in from the ocean in scuba gear with a party dress in stow).
Over dinner that evening, Mike brings up the idea of San Diego as a great location for a vacation and that late March is a particularly nice time to visit (failing to mention that the timing happens to coincide with the Final Four). He lets her know that he's marked some San Diego shows for her to watch including the "Alias" episode since they have a season pass for "Alias" (i.e., it records/stores all "Alias" episodes). Jill is surprised and impressed that Mike has gone to this trouble.
Tomorrow: the backend technology supporting this consumer behavior, and more...
Dave Chase is a partner with Altus Alliance, which specializes in driving revenue traction for emerging businesses. He publishes a blog entitled Market Velocity that focuses on how emerging businesses can gain market traction. Before joining Altus Alliance, Chase spent nearly 20 years in the industry with the last twelve years at Microsoft in various senior marketing and general management roles, including his role as MSN's managing director for industry marketing and relations. In that capacity, he was responsible for MSN taking a leadership role within the Interactive Marketing industry to grow Online's share of the overall ad market in concert with AOL, CNET, Yahoo!, Google and other market leaders.
Chase played leadership roles in launching several new businesses within Microsoft including Microsoft's entry into the enterprise software and server business which is now an $8B business. This included co-leading Microsoft's first vertical marketing efforts where he grew the Healthcare vertical market from virtually no presence to a market leading position. The healthcare business now represents over $400M in revenue for Microsoft.
From there, he was integral in Microsoft's entry into consumer Internet businesses that achieved both critical and financial success. These included Sidewalk, Encarta and HomeAdvisor, which were among the first profitable consumer Internet businesses for Microsoft. He has contributed numerous articles to iMedia.