A windfall of data and dollars is possible with the alignment of stars from mainstream digital technology and savvy consumers. Now if only more advertisers and agencies would just play nice.
Advertisers spend only 8% of their dollars on the Internet, where consumers spend about 38% of their media time. Nearly half the U.S. population has profiles on social networks, which get miniscule ad support.
The paradox means advertisers are leaving money on the table by not monetizing new media's unique real-time opportunities to build awareness, loyalty, referrals, purchases and repeat business. That means using a combination of online, social network and Internet mobile devices to make advertising relevant, and therefore, more valuable to individuals.
The longer the gap between audience and advertising remains, the more likely it will not close," observes Needham analyst Laura Martin. The stakes are huge: more than $160 billion of annual advertising and $800 billion in enterprise value.
"The longer an old-media advertising silo holds onto its monetization against the onslaught of much cheaper, more measurable online media options, the more it proves to the market and to advertisers that certain silos have non-substitutable benefits," she said in a recent report.
Not as clear is whether new digital platforms (online, social networks and mobile Internet) will grow the ad-spending pie or siphon dollars from traditional media silos (television, newspapers, magazines, outdoor). There won't be much time left to decide. Mobile advertising will be nearly $4 billion in 2010, which could double by 2013, according to JP Morgan Chase.
Developing forms of interactive measurement, communications and transactions are redefining the out-of-home, television and other traditional media for advertisers and consumers. Here are just three examples of change in action:
*Apple's iAd mobile advertising platform for iPhone OS, new iPad and iPod Touch features full screen video and interactive ads inside of apps that Apple will sell and service, sharing 60% of revenues with developers. The advanced iPhone's multitasking support of location-based and other advertising-related services will take interactive shopping to the next level. GPS will give advertisers consumers' location so they can push out discount coupons and codes in order to track purchases.
The golden interactive loop will be the source of newfound wealth, largely supported by the Apple ecosystem. Apple CEO Steve Jobs is betting that apps on some 100 million Apple devices will dominate mobile advertising, which some analysts forecast could be half the Internet ad market within five years,
Clearly, Apple is taking dead aim at Google's search advertising.
*Akoo International's represents a contrasting approach to full cycle interactive advertising. The private Chicago company provides proprietary Wi-Fi social TV, mobile device messaging and apps for visitors in shopping malls and university campuses.
Consumers on the go use their personal smart phones and other mobile Internet devices as a remote control to request music videos on Akoo's giant HD screens. That's almost secondary to the email and text response to advertising playing on an adjacent screen, which includes electronic coupons and codes for purchases in mall and nearby stores and restaurants.
Participating blue-chip advertisers, such as Microsoft's Xbox 360, Best Buy, 20th Century-Fox and McDonald's, receive ongoing Arbitron measurement of consumer response, engagement, intentions and purchase. Akoo's goal is to leverage its more than 23 million unique monthly viewers (or more than 7 of the 19 top online properties measured in February by Nielsen) to grab more of the ad dollars shifting from television to online.
*TheFilter, a UK-based personal discovery engine started six years ago by rock musician and digital pioneer Peter Gabriel, has fine tuned its algorithms to provide video and music recommendations to connected consumers. NBC.com and Dailymotion (one of the largest video sites) are The Filter's newest commercial partners. Social media and advertising on mobile Internet devices need the same enhanced connections to boost digital returns.
Its personalized selection technology has intriguing applications for advertisers seeking to reach target consumers on their mobile Internet devices anytime, anywhere. Utilizing "session psychology," The Filter analyzes individual Internet searches, selections and purchases to recommend more relevant content.
Whether content or advertising, the core assumption is that consumers, inundated by the Web's clutter, will welcome recommendations of content, services and products that meet their needs. Amazon and Netflix have made refined recommendations a signature business feature.
With mobile Interactive devices becoming the device on which we universally live our lives, scores of content, service and marketing companies will scramble to become a regular presence in their pocket.
More about Diane Mermigas consulting and speaking opportunities at Mermigas on Media; more analysis at BNET and Seeking Alpha.