• by Joe Marchese , April 10, 2007

Prediction markets fascinate me. Who can argue with the idea of creating markets for ideas? The basic premise of predictions markets is to aggregate the opinions of “the many” in a competitive and efficient manner, most commonly representing a stock market.

While I definitely want to dedicate an entire Spin to actual advertising prediction markets (please comment with your favorite and I promise a comparison in this space for a future Spin), for today I want to look at the ideas whose stock should be soaring.  I do my best to keep up with the avalanche of articles exploring the future of advertising and have had the pleasure of attempting (with limited success) to hold conversations with some of the best minds in advertising regarding its future in relation to technology shifts. The authors of these articles and sources of conversations in many ways represent the analysts for the advertising futures market.

Like the real stock market, there is plenty of speculation and irrational exuberance, but looking for commonalities across the many opinions yields a couple of common threads. The common threads are the blue chips -- the obvious, safe, “I am planning for my future” type of picks. Then there is the mess of completely varying opinions on how many of these blue-chips futures are actually reconciled (the types of picks you can get rich on, but more likely go broke on).

Greater consumer/customer/user/viewer control

What is common: that technology will allow consumers to exert exceeding pressure on content publishers, media owners and advertisers by requiring explicit consent for advertising. The bottom line is that consumers, with more outlets for media consumption and access to advertising blocking/skipping technologies, will have a significantly lower threshold for tolerating the negatives of advertising.

What isn’t common: A timeline for every household owning a TiVo. The weight product placement and subscription service (“Entourage,” I am looking at you) will have in filling the void. How fast, if at all, DRM will disappear. The implications/role of content aggregators, search, P2P and media portals in the new media value chain.

Increased emphasis on ROI

What is common: That across the board, technology will drive the increased accuracy of determining ROI on all advertising expenditures.

What isn’t common: Once technology has provided these greater levels of ROI transparency, will advertising’s role and execution within many major brands shift dramatically from a qualitative to quantitative function (more closely resembling finance and operations)? How will ROI be determined and compared against advertising’s long- vs. short-term goals? I have a somewhat strong opinion on these issues.

Relevancy, relevancy, relevancy

What is common:  Stemming directly, and very logically, from combining safe bet No. 1(greater consumer control) and safe bet No. 2 (increased emphasis on ROI), we get advertising’s rallying call, a call to relevancy. Technology will allow for the aggregation and classification of all advertising opportunities, and after analyzing the context of the opportunity, the preferences of the audience (aka propensity to tolerate a given message) and potential value to all possible advertisers, Google… I mean, um, someone’s, technology will deliver the ultimately relevant message.

What isn’t common: Who will create the massive volumes of creative inventory necessary for this world of hyper relevant advertising? How will relevancy to multiple parties be reconciled when interest do not align? What role can “distributed creative development”  play in solving advertising’s future creative needs?

New units of measurement

What is common: The market needs it. The page view is dead. Clicks are dead. CPM’s gone. I know, I know, you’re saying “that sure gets said a lot for something we haven’t agreed on a replacement for and still use everyday.”  I agree, but that doesn’t make it any less of an extremely common thread, so it gets blue-chip status.

What isn’t common: Can we settle on a meaning for engagement? Even if we can, does engagement have the potential (accuracy, ease of understanding) to ever gain the critical mass of adoption necessary to become a standard? Or does CPA become the standard, discarding all non-transaction-based advertising?

A RAPID shift of brand advertising dollars into digital

What is common: This one is kind of a given (but I guess all the blue chips are). There is already a significant misalignment of percentage of total brand advertising spent online when compared to the total percentage of consumer attention dedicated to online content. As more technologies are dedicated to solving the delivery, measurement, and relevancy issues, correction of this misalignment will represent a sizeable and rapid shift in advertising budgets.

What isn’t common: When will this rapid shift of dollars occur? Be sure to distinguish rapid from immediate. The stewards of brand advertising have shown no rush to dive headfirst into online brand advertising, and for good reason. There is no upside to assuming the risk. Brand equity is a valuable commodity, and major brands will be content to experiment with online's generating individual success here and there until someone shows they can deliver results as consistently successful for building brands as TV. Big media companies aren’t exactly going to push them, either. So what technology or method provides a tipping point, and when?

What are the obvious blue chips you would call out?  And what are your million-dollar stock picks? (Don’t forget to submit your favorite advertising ideas futures market. If I get enough responses, I will put the analysis here.)