Hooray! We're Number Two

 It's official: in 2010, the internet categorically surpassed newspapers in advertising revenue in the U.S., which means it's second only to television among ad mediums, according to today's AdAge.  While that may be bad news for newspapers (and all dead-tree publishers, really), it's yet another indication, if one is needed, of the relentless domination of the advertising landscape by the digital realm.

No need to recount the many reasons why online continues to dominate.  There is one issue, however, that is central to the success of internet-based advertising that will require a great deal of debate in the coming year, which is the precise targeting of ads to appropriate audiences and a corollary: privacy.



At MediaPost's Search Insider Summit a couple of weeks ago, the privacy issue was debated in a panel and came up around the edges of many other presentations.  What resonated most for me was the oft-repeated paradox that consumers want, on the one hand, content that matches their interests and desires, but, on the other, want to share as little about themselves as possible.

The other paradox is that consumers have long been happy to accept advertising in exchange for what they want most of all: tailored content that is otherwise absolutely free to them.  It shouldn't be surprising.  Americans (and perhaps all citizens of the world) are full of these little paradoxes.  We want, for instance, to fly free from the fear of suicide bombers, but object to the scanning devices that ensure would-be passengers don't have something strapped to their private parts that might also detonate.   We want a broad range of services from our government but object to actually paying the taxes necessary to cover their costs.  Hell, I wouldn't mind six-pack abs, but object to the sit-ups required to achieve them.

In other words, it's a basic desire to want something for nothing. And while the truth is nothing is free, we marketers capitalize on that desire by offering something for not that much more than free.  Want smoother skin in just five days? What's $45 compared to giving up a lifetime of sun-tanning on the beach?  Want lower fuel costs and to save the environment to boot?  At $35,000, a new hybrid automobile is a bargain.

So what should be the cost of ensuring that a young single guy who loves sports, his job on Wall Street and his alma mater is served ads that don't include coupons for a jar of L'Oreal because he happened to do a little gift shopping for his mom online?  How much sharing of what's personal is too little, just right or too much?  Who knows?  We're all Goldilocks, at this point.

Some folks at the Search Insider Summit agreed a new era of transparency and choice might make a difference.  What free content?  Great -- choose how you want ads served to you.  Don't want to be targeted with advertising? No problem -- except you've gotta pay one way or another.

In this world, we consumers might each have a unique digital thumbprint to which we can attach a set of preferences for the ways in which our online activities are tracked, recorded and shared, and how ads are targeted to us.  And since even TV will one day be totally online, the vast majority of ad spending would be governed by that thumbprint.  Over time, we'd be able to fine-tune our settings based on a variety of factors across multiple marketing channels, brands or market segments.

The ideal, of course, is that the industry would figure all this out before the government mandated it somehow.  But it would require an extraordinary act of submission and compliance by a diverse group of marketers who are hard-wired to buck convention to achieve a competitive edge.  Someone would also have to string together the appropriate technologies and standards.  And the unscrupulous out there are always looking for ways to spoil everything. 

Maybe something short of the ideal, then...

In any event, the pressure is on.  It could be that 2011 is the year advertisers crack the nut on these and possibly other problems to deliver genuine self-regulation where privacy matters are concerned.  Or maybe not.  I sure wouldn't bet on government getting at the right solution.  One thing is for sure: before you know it, online will be the top advertising channel on the planet.  Then where will we be?

5 comments about "Hooray! We're Number Two".
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  1. George Michie from Rimm-Kaufman Group, December 20, 2010 at 4:29 p.m.

    These numbers are deceptive. The AdAge figures are a report based on money allocations from the big media firms. It totally ignores direct mail (catalogs, mail inserts, other direct response mailers), which last I check was more than either TV or the internet.

  2. Fj Rich from chase media group, December 20, 2010 at 4:42 p.m.

    Your conclusion is w/o perspective, and appears to be motivated of a desire to bury print advertising. Firstly, what's a newspaper, in your view? Counting shoppers w/ over 70 million in circulation and all other "print" advertising, your conclusion is wrong, though at worst only premature since print advertising is clearly losing its footing.

    The perspective: of all Ad dollars only 13% go to the Internet--punto y final!

  3. Paula Lynn from Who Else Unlimited, December 20, 2010 at 4:48 p.m.

    You are right - Nothing is free. Freedom is not free. Has anyone gone to a library or book store and requested what their customers are reading or buying ? There's a law about that. So does anyone/company have the right to buy that information ? What difference is there between knowing what is bought on line or read on line vs the library/book store ? Is gathering some general demographics, general as in geographic, income range - you know, the basics - OK ? Would put more old fashioned pressure on instincts, inductive and deductive reasoning, thinking ? Bearly !!!!

  4. David Pavlicko from AVISPL, December 21, 2010 at 9:33 a.m.

    Great piece - your last paragraph sums it up. 'I wouldn't bet on government getting at the right solution'.

    And Paula, what type of advertising are you OK with? Apparently, not anything that targets anyone in any way whatsoever, regardless of whether or not it anonymizes any private data.

    What do you think the government is going to do if they get control - I can tell you. They'll track everyone and everything, and then they'll decide what you can do and can't do. Is that the solution you're hoping for?

  5. Paula Lynn from Who Else Unlimited, December 21, 2010 at 7:37 p.m.

    Who said anything about government collection here? The law does not allow anyone or a government representative without a supena to find out what books you are reading or bought. Advertisers/Marketers do not have the authority to issue a supena. Advertising can be done without such specific targeting and had been done this way, way before on line collecting and distributing. Agencies and media are not going to disappear if they don't suck the life out of people and can still be very, very profitable.

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