Wednesday, May 24, 2006

How can you recognize a tipping point?

Advertisers are struggling to reach webwise teens

Money talks, .......everything else follows.

Aline van Duyn, reports in the May 23 FT.
"A key moment of realisation for the industry came last year when Mr Murdoch grasped how dramatically the internet was changing the media business. Since his very public damascene conversion, embracing digital media has become a priority for all News Corp’s businesses, from television to newspapers to movies. The media mogul has spent around $1.5bn on acquiring internet companies.

On the same page, Richard Waters asks from San Fransciso...
"Are the drab text advertisements that appear on internet search engines a harbinger of what lies ahead for the entire $600bn global advertising industry? "

“...When people look back at search, it will be seen as one of the pivotal things that shifted how people think about advertising,” says Mr Armstrong.

"...Google has experimented with buying advertisements in print publications on behalf of its customers. This year, it bought a company that places advertisements on radio stations – a highly fragmented, difficult-to-reach market that in some ways resembles the search engine world."

And now for some of the Google- Mart implications. Same article,

"...Led by Wal-Mart, a group of advertisers under the auspices of the Association of National Advertisers this month set out to raise $50m for a pilot project to launch their own joint market for television time."

"...In a world where advertisers are used to buying in online auctions, things should be different. Media buyers such as Publicis, however, respond that advertising space is not a commodity and advertisers still want control over where their messages appear."

No doubt that advertisers want control over where their messages appear, but exactly why is advertising space not a commodity? Aside from the fact that the revenue stream for media buyers comes from their superior information about the marketplace.

"...Whether the traditional advertising industry is ready for the greater level of efficiency and accountability this implies is another matter. There is a general perception, says Mr Armstrong, that the industry “is overweight and a bit mushy. We’re replacing fat with muscle”.

So, maybe in the long, or maybe not so long, run, advertising dollars will be put into enhancing the customer experience. Making it better, faster, cheaper, more elegant, easier to use, taking less time and hassle.

The GME threatens any industry that is based on a control of information. We've been hearing the rumbles for the last few years, but it sure feels like the fault lines are going to erupt pretty soon.

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