13 Questions For 2013 In The World Of Online Advertising

questionsCross-posted at my Forbes.com blog The New Persuaders:

For the past few years, I’ve offered predictions here and on The New Persuaders for what’s likely to come in the next year. This year, I’m going to shake it up and throw out a few questions instead. I think I know the answers to some of them, but if many won’t be answered definitively by year-end, they remain top of mind for me and probably for many others in online media and advertising.

So in this, the first full week of the new year, here are some questions to which I hope to start finding answers:

* Will image advertising finally take off online? I have to believe that as people spend more and more time online instead of reading print publications and watching TV, brand marketers will want and need to reach them there with ads that are aimed at creating consideration for later purchases, not just eliciting an immediate sale like Google’s search ads and too many banner ads. We’re already starting to see signs of such advertising with the early success of Facebook’s Sponsored StoriesTwitter’s Promoted Tweets, and YouTube’s TrueView ads–not to mention the explosion of tablets, which provide a lean-back experience more compatible with image advertising. This won’t be a sudden change, since brand marketers and agencies don’t move quickly, but you can’t tell me there aren’t going to be increasingly compelling ways for brands to influence people online.

* Can advertisers and publishers make ads more personal without scaring people? That’s the $64 billion question, and it likely won’t get answered in full this year. It’s easy for headline-hungry politicians to make a big deal out of Facebook’s latest privacy gaffe or the Wall Street Journal’s or the New York Times’ latest scare story about an ad that followed somebody all over the Web. That’s especially so since Facebook really does push the privacy envelope too far at times, and too many advertisers idiotically chase one more sales conversion at the cost of scaring off hundreds of others or inviting onerous legislation. But making ads more useful to each individual person is not only crucial to online commerce, it’s potentially better for most consumers as well–seriously, I don’t need to see another ad for a fitness center or a new credit card, but that ad for Camper van Beethoven’s new CD had me in a split-second. The answer lies in these two words, everyone: transparency and choice.

* Will mobile advertising work? Well, some of it already does, to hear Google and Facebook tell it. And while those already devalued digital dimes so far turn to pennies when it comes to ads on smartphones and tablets, this still feels more like growing pains than a crisis in online advertising. Sure, the screens are small and people don’t like to be interrupted in their mobile cocoons. So a different kind of advertising is probably needed–clearly, banners don’t cut it on a four-inch screen. But the value to advertisers of knowing your location and maybe the apps you’re using, coupled with knowledge of what your friends like–all with permission, of course–is huge. That permission may be really tough to earn. But if advertisers can offer tangible value, perhaps in the form of useful services related to what you’re doing or looking for or shopping for–and isn’t that the ultimate native ad?–people may loosen their hold on that information.

I have a lot more questions, but I’ve got to stop before too much of 2013 is gone.

Check out more questions at the full post.

Sorry, Retailers–Cyber Monday’s Days Are Numbered

Two cliches in one ad!

From my Forbes.com blog The New Persuaders:

Not long after Cyber Monday was invented in 2005 as an online alternative to Black Friday, I called it a “marketing myth” because it was actually not even close to a top holiday shopping day.

Then a funny thing happened–Cyber Monday, created by the National Retail Foundation’s Shop.org online unit, became a self-fulfilling prophecy as retailers jumped on the term and began offering special sales that day after the Thanksgiving holiday. By the following year, it had turned into a real phenomenon, at least for many retailers, and last year it became the heaviest shopping day ever to date. It might even happen again this year.

But now, even as many retailers have made Cyber Monday sales a stock part of their holiday strategy, I’m betting its days are numbered. Why?

* Early sales. Smart retailers noticed that before Cyber Monday, at least (and perhaps still), the period leading up to the big day actually were even more active shopping days. And in their never-ending attempt to get a step ahead of rivals, many retailers ran not just pre-Cyber Monday sales, but pre-Black Friday sales as early as the evening before Thanksgiving. Apparently they worked. They almost certainly will cannibalize Cyber Monday sales. …

Read the complete post at The New Persuaders.

How Steve Jobs’ Laughable Early Apple Ads Evolved Into Today’s Marketing Marvels

From my Forbes.com blog The New Persuaders:

To look at Apple’s classic advertisements, from the stark, bold “Think Different” campaign to the playful “Get a Mac” series to those minimalist silhouetted iPod ads, you’d never guess that early Apple ads were so–not to put too fine a point on it–awful.

On the one-year anniversary of Apple cofounder Steve Jobs’ untimely death, we scrounged up a baker’s dozen of early Apple ads in the accompanying photo gallery for your amusement and edification. They’re print ads in particular, since it was pretty early days to be advertising computers on television. Still, most them wouldn’t be recognizable as Apple ads if not for the name and early logos.

They weren’t especially worse than other computer ads at the time. Maybe they were even marginally better. But they were anything but special, let alone cool.

What’s interesting is not just that Apple’s early ads look so depressingly conventional. It’s that a few of them revealed flashes of Jobs’ future marvels of marketing. Once Jobs got past the initial “speeds and feeds” marketing imperative during a time when Apple was really just one, albeit prominent, competitor in a sea of pre-Windows, pre-Mac personal computer makers, he began to develop an eye for brand marketing that few companies in technology or any other industry have since surpassed.

Take a close look at these early ads, and you can see that Apple’s evolution to the pinnacle of brand marketing happened not in a straight line, but in a sort of punctuated equilibrium that parallels the gradual maturing of computing itself. At first, PCs were for hobbyists interested in performance and features, and the ads reflected that. But as the machines began to sell into the millions, Apple’s ads began to emphasize how they were “the computer for the rest of us,” as the first Macintosh ads called them.

That first one for the Apple-1 in 1976, rivetingly entitled “A Balance of Features,” was appallingly amateurish. The ad, released only a few months after Jobs and Steve Wozniak showed the prototype at the Homebrew Computer Club in SiliconValley and incorporated their company, was stuffed full of technical features in a way that’s unimaginable today. For instance, the ad touted the ability to attach a keyboard and monitor to allow “the efficient entry and examination of programs in hexidecimal notation.” Who knew?

There was even a misspelling in the first line, a sign that Jobs’ famous perfectionism hadn’t quite kicked in yet. …

Read the complete post, including a photo gallery of the ads, at The New Persuaders.

Why Do Programmers Hate Internet Advertising So Much?

Facebook ad question (Photo credit: renaissancechambara)

From my Forbes.com blog The New Persuaders:

Another week, another pontificating programmer slamming online advertising. What is it with these guys?

The latest example is a steaming heap of linkbait from software developer and entrepreneur Patrick Dobson entitled Facebook Should Fire Sheryl Sandberg. That would be the chief operating officer of Facebook, whose purported crime is that she steered Facebook toward being an ad-supported company.

In Dobson’s telling, while Facebook cofounder and CEO Mark Zuckerberg was off at an ashram in India, onetime Google ad exec Sandberg mandated that Facebook would henceforth be an advertising company. Proof of her folly? Facebook’s now worth half of what it was at its IPO three months ago as it “continues to flounder in advertising hell.”

This, despite the fact that Facebook will gross about $5 billion in ad revenues this year, despite the fact that its current market cap is still more than $40 billion less than eight years after the company’s founding in a Harvard dorm.

Thousands of Web developers would love to flounder this badly.

Dobson’s preferred alternative is that Facebook should gradually phase out advertising in favor of–and I have to get technical here, because the bigger picture he provides is fuzzy–selling access to its application programming interface. That way, developers can build businesses like Zynga did on top of the social network in the way personal computer software developers built applications atop Microsoft’s Windows. From his post:

… There is massive value in the social graph and the ability to build applications on top of it. I believe the value is greater than all of the advertising revenue generated on the web to date. … What is the best way to monetize the social graph? To sell access to the social graph! … Developers can then figure out if advertising, or micro transactions, or payed access is the best way to monetize the social graph.

I’m not really sure what “selling access to the social graph” would be, though it sounds like the result could make Facebook’s many privacy gaffes to date look tame.

But the bigger problem is the persistent implication by tech folks like Dobson that advertising is beneath them, and beneath any intelligent human being. Now, I’m no huge fan of most advertising, and all too often it is indeed lame. But there’s no doubt it can be useful at the right place and time, and even when it misses the mark, advertising is a small, remarkably frictionless price to pay for a whole lot of free Web services.

The notion that advertising is evil, to use a favorite term of Google critics, or at least useless is a longstanding meme in Silicon Valley. It goes at least as far back as Google’s founding, before it became–right–the biggest online ad company on the planet. Cofounders Larry Page and Sergey Brin famously wrote in their Stanford doctoral thesis describing Google that advertising could pollute search results.

Why this antipathy to advertising? A lot of tech folks seem to believe they’re immune to the influence of advertising. More than that, they assume that no one else is much influenced by it either (despite ample evidence over many decades that ads do influence people’s attitudes and behavior). Therefore, the reasoning goes, ads are nothing more than an annoyance, an inefficient allocation of capital. Dobson accuses Sandberg of a “rampant lack of business creativity” that has “no place in centers of innovation,” later saying she should start an ad agency in Miami. …

Read the complete post at The New Persuaders.

Here’s How Badly Google Wants To Make Nexus 7 Tablet A Hit

From my Forbes.com blog The New Persuaders:

Only a couple of times has Google deigned to clutter its famously spartan home page with advertising. This is one of those times.

Today, Google is running an ad below its search box for the Nexus 7, the seven-inch tablet that it hopes will steal a march on Apple’s enormously popular iPads. Why now? Google hasn’t said, but it seems likely the ad push is looking ahead to Apple’s expected October release of the seven- to eight-inch iPad Mini, as well as to the expected announcement of Amazon.com’s new Kindle Fire next week.

As tablets take the computing market by storm, Google clearly views them as a critical device on which to make sure its search and other services, and the advertising that rides atop them, continue to be front and center. I remain doubtful about whether Google itself really wants to become a full-on maker of hardware, Motorola Mobility acquisition aside. But at the very least, a successful Nexus 7 could spark other manufacturers to pick up the pace of innovation in tablets.

That’s all the more critical in the wake of Apple’s big win in court last week, when Samsung was found to be infringing multiple Apple patents. Although Google’s underlying Android software was not directly involved, the jury’s ruling cast a pall on Android’s potential for further gains vs. the iPhone and the iPad.

The Nexus 7 spot marks a rare appearance of a Google ad on its home page, though not the first one. The company also ran ads for Motorola’s and Verizon’s Droid phone in 2009, followed by one for Google’s own Nexus One phone a few months later. It also has promoted other Google products, including the T-Mobile G1 phone in 2008. And just a few days ago, if you hovered over the “I’m Feeling Lucky” button, you got alternative messages that sent you to other Google services.

Still, don’t expect to see Google start splattering ads all over its home page. After all, then we’d all stop writing about how unusual it is and Google won’t get the free publicity it’s getting right now.