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BL Ochman BL Ochman   Bio
03.09.07

Innovation in Advertising Won't Come From Google or Any Big Agency

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Eric Schmidt, CEO of search giant Google, told an investors group this week that the market for targeted advertising is at a very early stage with lots of innovation still to come, according to Internet News.

Discussing the inefficiency of random ads in traditional media, Schmidt noted, "It's a constant barrage of ads that aren't relevant; pet food for people without pets, baby products for families with out kids. Even a small improvement [in relevancy] would have a very large impact."

The relevancy he's talking about is in the delivery of contextual advertising. But that's not the real issue. Content is the issue. And until both agencies and clients get a clue about online advertising, no changes in ad serving are going to matter.

In the age of micro-niche media, advertising has to be micro-focused as well. It's the content and the focus that has to change. It's not enough to put advertising in new media. "Traditional agencies see a trend and they fuck it up," George Parker told the PSFK trends conference in Manhattan the other day, "like Rupert Murdoch and MySpace. People just move on to the next thing."

The next big thing in advertising also won't come from consumers. All you have to do to prove that is look at the lackluster crap that passed for consumer generated advertising at this year's Super Bowl.

As Parker noted, consumer generated media is not a strategy. It's not true that simply handing the tools for advertising production will make people creative, or brands successful.

Consumers may not be creative, but they're not stupid. They know that advertising makes free content possible online and they're willing to accept, and even clickthru advertising that is interesting, engaging, and focused.

I believe the era of the big ad agency is over. And so is the time when a giant like Google or Yahoo! will dominate online advertising. The specialization, the real creativity, the new direction will come from niche agencies that specialize in particular aspects of online advertising. Those will soon be popping up like spring flowers.



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Comments

Good post BL. You are right: The content, not the tools, is the issue. Bad content aimed at the right audience won't sell any better than bad content aimed at reach.

Posted by: Lewis Green | 03.09.07

BL

I agree with most of what you said, other than the part of the Super Bowl commericals...Doritos was great!

We are talking about some of the same stuff, in particular: Who knows/invests more in media? Marketers or agencies?
http://ana.blogs.com/maestros/

Posted by: Will Waugh | 03.09.07

Love this article! It's so true that the market is about to shift and the traditional players will not be the ones sparking innovation! Soon, everyone will get Blipd! This is an awesome time in marketing.

Posted by: Ty Graham | 03.09.07

I think the time is right for niche-advertising firms that are very familiar with an industry and have the young creative minds to do some amazing online ad models.

Posted by: Mario Vellandi | 03.09.07

A long, long time ago, advertising was the industry of creative people. Then all the great shops got bought up by big conglomerates and creativity was squashed as bean counters got into the act.

Add to that the tenacity with which advertising agencies and their clients are clinging to the the idea of interruption advertising, and you have a fossil.

Interesting to watch the traditional ad industry in its death throes.

And so exciting to be able to be part of the solution.

Posted by: B.L. Ochman | 03.09.07

Good post, BL. It seems like we are on the threshold of a marketing revolution. I do still believe, however, that there will be a place for other marketing channels besides the online world. Until the boomers are gone from this world, many middle-aged and senior consumers and business people still prefer their messages in print or a combination of print and electronic.

Posted by: Elaine Fogel | 03.09.07

Really like the line:
"As Parker noted, consumer generated media is not a strategy."

You can certainly plan steps that might better facilitate this sort of thing, but it's completely out of your hands as to whether it happens or not.

Great post - thanks.

Posted by: Brett | 03.10.07

B.L., I agree that the giants see a trend and jump all over it until they screw it up or make us all sick and tired of it. That's just the old me-too/follow-the-leader system at work.

I don't think the era of the big agency is over, though. We've been hearing that every so often for years. But smaller niche agencies will continue to come up. Some will remain independent; others will get bought up by the big guys. That's how the big guys grow and try to stay relevant. I don't see that changing dramatically, but... who knows?

Posted by: David Reich | 03.10.07

There are interesting time ahead, I agree! The fast moving, innovative new agencies that are emerging are bound to attract more and more interest from big brands.

How the new agencies manage to stay creative and grow will be one of their challenges. Which is where the big agencies come in.

What I find fascinating is the willingness of the boomers to use and engage with the online world -- in many ways they are driving a large proportion of the uptake of online media. And this is, in turn, driving a shift in demand for new agencies who can bring fresh thinking to brand activation online.

For me this is a paradigm shift rather than an innovation. There are many of the same branding rules in place but they need to be used and deployed in a new experiential space. [Was that a rhyme?]

Posted by: Gavin Heaton | 03.10.07

Elaine: I did not say that online is the only outlet for advertising. What I'm saying is that advertising online requires a different approach than traditional advertising. And big agencies are not getting that. Therefore, they will be supplanted by agencies that do get it.

And David: I think that change already is underway. Sure there will be a big agency or two that "gets" online. But most of Madison Avenue is brain dead on the whole area of new media marketing.

Posted by: B.L. Ochman | 03.10.07

Re Schmidt: Does anyone else see the wackiness of one member of the online ad broker oligopoly basically sells to ad agencies, (a) "your ads aren't relevant enough to keep pace with technology" and (b) "we've got a pretty good idea where innovation is going to hit to make your ads more relevant"? The whole point of innovation is the "new and improved" with benefits, not the "calculated and dictated" with threats. Mixture of curiosity and skepticism with eyebrows raised...

Re Parker: Consumers may be creative but couldn't the tools, means of execution, support, distribution, etc. be just as crappy if they're the same that stymie creatives who work within existing channels now, and that bar a more diverse (big and little "D") range of talents to flourish? If basically the powers that be seek out that which meets current expectations in consumers, consumers will reinforce the demands in advertisers.

The bigger problem is one Andrea Learned (sorry, still attempting to remember everyone's name here!) is hinting at: advertising in general has to be able to define its purpose before it can justify all the hemming about content, context, and consumers.

In a redefined game with blurred boundaries, I still can't tell if ads are meant more for the creatives who designed them, the marketers, entertainment, or actually *gasp* to sell something at the end.

Regardless of which agency type emerges from the online huddle, it needs to be able to sell or risk being buried under so much of its groundbreaking dirt.

Posted by: Ryan Turner | 03.11.07

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