My latest advisory, yet still optimistic tale contribution to Advertising Age’s Digital Next is live. Hopefully it will be in the next print issue as well.

Here’s a sneak preview:

When Habits Change Faster Than Ad Models
Venture capital and big-media acquisitions can’t bankroll social media forever

Posted on 05.02.08 @ 09:32 AM

Ian Schafer Ian Schafer also blogs at IanSchafer.com.
Technology is a funny thing. It enables humans to be capable of so much. It raises our potential to improve our lives and the lives of those around us.

But so much of technology is hidden from plain view because it doesn’t make money. Financial gain is arguably the most important aspect of technological innovation, because without it, all but the most altruistic of reasons cease to exist.

We are living in a time in which the media we consume are undergoing the most rapid technological transformation since the advent of TV. Back then, there was a lot for companies to gain by having a TV in every home in America. It gave advertisers the ability to pitch their wares to TV’s captive audience. And over the years, those advertisers have shelled out billions upon billions of dollars continuing to do so because it was perhaps the best-performing media, but one that delivered a passive audience.

We are now witnessing a migration of ad dollars from lesser-performing media to online’s active audience.

Even within a rapidly growing medium such as the web, there is a still more-quickly growing form of online media that we call social media. This includes social networks, blogs, virtual worlds, widgets, applications, communities and any other format where the individuals who use it create or distribute the majority of the content.

Read the rest over at AdAge.com by clicking here.

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As each week passes, it seems another large agency (read: holding company-owned, >1000 people) is announcing their plans for ‘integration’. This week, it’s MindShare, as MediaPost reports.

As MindShare’s North American CEO Scott Neslund declared, “We’re making a very clear statement that the time has come to break down the silos.”

Intentions? Good. But will it blend?

Various other efforts from the large agencies have been announced in the past few weeks and months, with some announcing digital’s move to the forefront. Some, like MindShare, have taken the ‘media-neutral’ stance.

It seems that the rationale for all of this is positioning — positioning of the media agency as something that is more than reach + frequency buyers of volume. Positioning is one thing. Being able to back that up with legitimate creativity is another.

The problem with all this is that creativity was not a building block of any of these agencies. They were established to plan and buy tons of media (traditional media) back when the fragmentation of television from broadcast to cable made everyone freak out. It was no longer so easy to buy television, print, and outdoor, and more hands needed to be brought on-deck to scale.

To scale.

Scalability has been the foundation for all these agencies’ success. When you look at any of the holding companies’ balance sheets, the media businesses are the segments driving those profits and revenues.

And then came the web. And infinite fragmentation. As much as big new media tried to lead us down a ‘portal’ (broadcast) model, the web has mega-fragmented. And that fragmentation is practically infinite.

Ironically,infinite fragmentation has become the undoing of the very agencies that were born out of the ‘original’ fragmentation of media. What infinite fragmentation should do is force us to re-think the role that agencies play when it comes to scale. And while the uber-large agencies are re-thinking and transforming, it’s imperative that they understand their role.

It’s very, very difficult (dare I say, impossible) to scale in terms of breadth (of reach) and depth (of experiences) simultaneously.

As the social media explosion continues, we know just how important experiences can be (although not how we can apply metrics — but I’m working on that). But scaling reach and experiences at the same time is usually an exercise in futility for brands, not to mention their agencies.

So the question is, can big media agencies built upon breadth, deliver depth? Creativity needs to course through the veins of an agency of any size to apply it consistently to both strategy and tangible output.

In the opinion of this blogger and CEO, there’s no precedent of retrofitting something that large into what the industry is calling for. Brands need smaller, more nimble, more innovative agencies built as integrated problem solvers from the ground-up — with creativity as its religion and the ability to deliver experiences (with the results to back it up) as its practice.

The web can still be a reach medium. But as it continues to fragment, it’s costing more and more money to deliver that reach. And maybe that’s the role of the larger media agencies. If I’m a brand, I’ve already got my reach through television. I want to use the web to deliver the depth of an experience that brings consumers closer to me.

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Yes. You read the headline correctly.

Online advertising is poised to overtake television spending in the UK by the end of 2009, as reported by Mad.co.uk, and via the results of research conducted by the IAB (Interactive Advertising Bureau), PricewaterhouseCoopers, and the World Advertising Research Centre.

Now granted, the UK is a smaller market, but this is a clear signal that it may not be too far in the distant future until ad spending catches up with media usage here in the US.

A 2007 report by the UK’s Office of Communications (Ofcom), stated that average daily internet use in 2006 (36 minutes) was up 158% on 2002 and time spent on the mobile phone (almost 4 minutes per day) was up 58%. Time spent watching TV was down 4% at 3 hours and 36 minutes.

All signs point to the increases likely being even greater in 2007, and will not likely stop climbing this year.

So why is the US so far behind? The latest numbers from TNS say that 2007 saw TV ad spending grow 17% to $64.4 billion, while online was not even at $17 billion. eMarketer predicts that in 2008, online ad spending will account for 8.8% of all ad spending ($25.9 billion).

We know that the Internet accounts for more than 8.8% of all time spent with media (not to mention all the behavioral signs that point to the web being a great place for great advertising). So why can’t we catch up with the Brits?

It’s ironic that a society that still has parliamentary meetings with wig-wearing electorates has a more progressive grasp on the media mix than we do. But then again, we’ve got Miley Cyrus, so there. And John Adams.

(Wigs-off to AgencySpy for the tip-off).

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With Google’s acquisition of DoubleClick now official, Saul Hansell discusses the potential for DoubleClick’s Dart for Advertisers (DFA) product to move to a free model, due to it’s acquisition by Google.

I say, bring it on.

This would be a shrewd move by Google towards getting the world migrated over to its ad serving platform.

While I’m not holding my breath for my ad serving bills to stop rolling in any time soon, my hope is that at the very least, the industry will be able to get a free, basic DFA, then maybe add-ons for additional services. That will force moves by companies like Atlas and 24/7 to reassess their models, and hopefully bring down costs across the industry.

The major ad serving companies are now all owned by major corporations (DoubleClick:Google; Atlas:Microsoft, 24/7:WPP). Ad serving is starting to appear more and more like it’s a value-add every day. Lets just hope the technology doesn’t stop improving for the sake of making it free, or even just less expensive. Without improved ad serving, we don’t get improved metrics.

Bring on the free. But don’t stop improvin’.

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MIT’s Technology Review just published it’s list of 10 Emerging Technologies for 2008. The one piece that resonated with me is Sandy Pentland’s exploration into Reality Mining especially in relation to social networking, new media and interactive.

Reality mining “is all about paying attention to patterns in life and using that information to help [with] things like setting privacy patterns, sharing things with people, notifying people–basically, to help you live your life.”

This becomes a hot topic for a few reasons. First and foremost is, once again, privacy issues. Data capture is part of our daily lives – credit card usage, cookies on sites, social network profiles, company swipe cards – and as technology continues to slowly infiltrate more of our lives, we become more tolerant and accepting of what information is divulged and distributed. Everyone has see the movies with the FBI trying to trace the criminals phone call with the criminal hanging up just before being caught. However, most people don’t think about that even with mobile phones being on all the time A simple Google search on his/her name would surprise a lot of people.

Reality Mining has been a reality for years. And as mobile phones become more prevalent with WI-FI, Bluetooth and GPS-type systems (ala iPhone,) in addition to the laptops we carry around and use, the continual social network is our daily life. And as mobile technology advances, our blip on the grid becomes more prominent. The Human Cyborg ideal continues to press forward. Professor Kevin Warwick first started research into this in 1998 by planting microchips in his arm for recognition of systems in his lab.

The major benefit of Reality Mining is from an anthropological standpoint. How people interact, where they are and when they are. Tying this information into disease outbreaks, advertising models (when a person sees an ad, what do they do right afterwards?) and general healthcare and “human maintenance.” Smartex in Italy is working on clothing that does just that.

It’s a bit of the God factor (being omnipotent and omniscient) that is also fascinating. Knowing where your friends are at any time, knowing what they’re doing, where to get the food your phone knows your craving. It’s bringing the idea of Facebook, Google Maps, Dodgeball and other sites into the physical space. The ultimate social network. Maybe even a step closer to SkyNet.

Real-time in real-time. Very meta.

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A fellow co-worker and myself were discussing various social aspects and the new trend of how people use space. As in, where they spend most of their time. The topic was very interesting where we initially narrowed it down into three areas. Home, work and the ThirdSpace (or Being Space as TrendWatching points out)

commercial living-room-like settings, where catering and entertainment aren’t just the main attraction, but are there to facilitate small office/living room activities like watching a movie, reading a book, meeting friends and colleagues, or doing your admin.

BEING SPACES charge us for eating, drinking, playing, listening, surfing, working, or meeting, just as we would at home or in the office, while successfully reintegrating us into city life 

An all too common example is the way Starbucks has made the coffeeshop into a living room type setting.

I also believe that in addition to these three spaces, there is a 4thSpace - online and social networks. A place where people go as a virtual home, from their landing page on Facebook to iGoogle. People dwell in one or two of these spaces at any one time. Usually one is physical with the second being virtual (ex: sitting at home playing Xbox Live, in Starbucks surfing Facebook, etc.)

The Four Spaces
1 - Home
2 - Work/Office
3 - Being Space (Starbucks, Borders Books, Panera Bread)
4 - Virtual Space (Facebook, iGoogle, MySpace) 

The intriguing aspect of 4thSpace is that it continues to exist without us after we place our identity into that realm. With MySpace, there are pages of deceased members that still garner visits and posted comments. So much so in fact that those that have passed now warrant their own sites like MyDeathSpace.com. The virtual identity becomes, or takes the place of, a real presence. Granted, social networks also allow users to be someone (or something) other than themselves, but the 4thSpace allows comfort in a setting where the other three spaces may not.

People unfamiliar, and even the familiar, become known by their page or avatar. Xbox Live, Facebook or when SecondLife was viable allows users to drop in for a visit and say hello. No one home? Leave a message and they’ll get back to you.

It’s a fascinating topic that is vast in it’s research potential, especially with user trends and emerging technologies with the additional social aspects and implications. As we get drawn into The Matrix a bit more, it’ll be nice to know how cozy it will be. Or when a Starbucks opens a Starbucks in it. Trust me, NYC is close already.

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Google’s announcement last Thursday about their venture into online personal health records is a mixed blessing, but one that has been much needed for the healthcare industry. It’s been a hot topic since the original announcement by Google in October. The biggest concern is that of privacy issues and, more so, data security. Microsoft and Google make assurances that data will be secure and privately controlled by individuals.

On the pro front, this announcement will open up the healthcare industry similar to how the iPhone has made carriers rethink their strategy of having strict control of what devices user get. Now patients should control where they take their ailments, rather than big healthcare saying what referrals you need and how to get care. Granted, this will take a while to see the full wave of this effect, but it’s finally happened where there is the challenge to bringing control to the masses. A big idea of web 3.0.

The cons? Well, for one, people will have to be the keepers of their medical history. A lot of people will, a lot of people won’t. Judging the way people can be cyberchondriacs with the likes of WebMD around, a social network space to post every symptom they may think they have would definitely need filtering and a professional opinion. But we’ve all been curious about what the doctor scribbles (yeah, they scribble) on that file. Just ask Elaine on a classic Seinfeld episode trying to see what’s in that file.

But imagine if that information does become publicly searchable (”OMG! She had WHAT when we were dating?”) or the movement into a medical social network (GooTube? Yuck.) It might lead to a new perspective on selective reproduction and a change in human evolution. Scientists are already theorizing on it. 

If the trial with the Cleveland Clinic is a success, we can see a big change in the way medicine and society interacts on that online space. I see it as a portal of innovation and communication – cancer survivors speaking about their therapies, treatments analyzed and discussed, ease of research and innovation – beyond their niche spaces on the web. The power of technology, the power of social media and the human element are enticing for this to work.

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First, Rupert Murdoch nixed plans to make WSJ.com free.

Now, I can’t even log in.

This is not the way to build an audience.

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Or at least that’s what an Advertiser Perceptions study says, according to Advertising Age. As a matter of fact, less than half of marketers and media buyers rank engagement in their top five criteria when buying media.

The good news is that big media spenders will be pouring money into digital. 76% of respondents said that they’ll increase online spending within the next six months.

But here’s something that will make you scratch your head until you bleed:

So which medium is the most engaging? Survey respondents said it’s print — yet ranked print lowest for delivering results. Online was ranked lowest for engagement but highest for results, while TV was ranked in the middle for both results and engagement.

Wha-wha-wha?

For all this talk about the engagement that online can deliver, why is it ranked dead last? Isn’t the whole promise of online media (and creative) that consumers can dive deeper and spend more time with an advertising message?

Are we doing something wrong here? I’m puzzled and perplexed.

A) Why is reach valued below engagement?

B) Why is online ranked dead last in delivering engagement when it is clearly the best at delivering it?

Click here to read the Advertising Age article, and let me know your thoughts in the comments below.

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A name-change isn’t news, but the way Sugar Inc. (publishers of PopSugar, CelebSugar, etc.) have gone about building a blog/community “empire” while building an umbrella brand is admirable. Kara Swisher, at the WSJ calls Brian Sugar, Sugar Inc.’s CEO and Founder the “sweet” Nick Denton. While good for an initial chuckle, they have gone about building their empires rather differently.

Nick’s flown in the face of mainstream media. Brian’s using mainstream media to his advantage. Both have been successful, and I’ve learned from both, as well.

I’ve known Brian for longer, but heck, we went to college together. How’s that for some totally irrelevant trivia.

Check out Kara Swisher’s blog interview with Brian Sugar below:

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