The single biggest effect of the online revolution will be to remove the existing degrees of separation between us and virtually anything in the world. What ever we wish will be put in finger tip’s distance. Every scrap of information, every shred of data will be a mouseclick (and a few dollars) away.

This will have profound and cataclysmic effects on almost every existing industry, and none more so than the advertising industry. As media converge online, the distinctions between various forms of advertising will disappear. Branding and direct, electronic and print, it will all become part of one seamless marketing continuum online.

We will become a consumer market of instant demand and fulfillment, where online acts as the connection between our needs and the merchants ability to meet them. The process will become transparent, requiring no effort on our part. The act of “shopping” will be, if we choose, reduced to a quick online review and confirmation. Our wired digital assistant will take care of all the arduous work of finding, comparing and evaluating.

A Single Pipeline

We have a Windows Media Center PC in our home. In a single box, we have TV, a personal video recorder, a stereo system and our household computer connected to the internet.

This is the first glimpse into the future. One box, multiple media. At this point, there’s no true connection between TV and the Internet. Hardware and software have simply been added to the box that allows me to watch and record TV. But it’s just a matter of time and critical mass before the last remaining link is cast between my television watching and the online world. It’s already happening with the delivery of other online media.

If you go to an online newspaper, you’ll be served ads relevant to the content of the article you’re reading. So if you’re reading a travel article on Bali, you’ll be served ads for Bali hotels and vacation packages. Contextual advertising programs such as Google’s AdSense automatically takes care of this in the background.

Now when you listen to a MP3 file on Windows Media Player, the computer retrieves information about the artist and shows it while playing the tune. It also can show subtle advertising messages. This contextual approach provides a clue as to where online advertising can go.

Television Advertising Delivered On Demand

Let’s look at the probable evolution of television. And let’s use what’s happened in the music industry as a comparison.

When I was a teenager, the only way you heard new music was on the radio. An album was released and it got airplay on the local station. You would hear it and then wait until you could get to the local music store to pick it up. The delivery of this music to you was a fairly controlled exercise. The big labels had a stranglehold on the development of artists, the production of records, the promotion of the music and the distribution to local outlets. There was physicality to the process that required a large, heavily capitalized infrastructure. A record had to be produced and delivered to you. This distribution method survived for decades, until the arrival of the Internet.

Today, you may still hear new music on the radio, or on MTV, or read about it on a website, or any one of a dozen other channels. But now, distribution of music happens digitally. In seconds, you can find the music online, order and download it. There is no physical process, so the old distribution system is breaking down. A band can record their own music and distribute online at no or relatively little cost. As we keep hearing over and over, the existing power structures in the music industry are dying because technology has found a way around them. Now, the music flows directly from the artist to the consumer, and the middle man has been cut out of the equation.

The same could hold true for television and film. To date, the existing power structures have managed to survive, although the emergence of cable television has shown that the power is becoming increasingly spread amongst more and more players.

Let’s look at one potential scenario to see where TV could go online. Let’s say broadband adoption and improved compression technologies have allowed all of us to have high quality programming delivered to us on demand. Scheduled broadcasts will be a thing of the past. No more will there be networks and programming schedules. New shows will be released and will be available any time we want. So will virtually any show ever made. If we want to see the episode of Gilligan’s Island where the Professor built a car from bamboo powered by coconut milk, it will be available. And we will have a choice. We can either pay a dollar or two to see the show commercial free, or we could choose the free version, which will have advertising embedded in the program.

But this won’t be the non targeted, generic advertising you see now on television. It will be highly targeted, both by our personal profiles (indicating our demographics, personal preferences, daily activities and interests) and by the topic of the show we’re watching. Our computers will feed this information back to an advertising server and match the advertising content to us.

So if you’ve been convinced by your wife to watch Under the Tuscan Sun, have a high disposable income and take extended holidays, an advertising message will be delivered to you about this absolutely charming vacation villa in Tuscany that just happens to be available this summer.

Clustering of Advertising Messages and Actions

The above scenario will also serve to demonstrate another development I see taking place in advertising. This is the clustering of advertising messages and calls to action. In this case, the all knowing, all seeing ad server will not only serve you the ad for the villa in Tuscany, but it will create an entire vacation package for you. Let’s imagine your personal profile also indicates you love food and wine, cycling tours, you have two teen age children, you live in Chicago and you tend to take vacations in July.

Suddenly, you’ll be presented with a complete itinerary, including the best airfare deals from Chicago to Rome available in July, train transportation to Sienna in Tuscany, a 5 day cycling tour including visits to wineries and gourmet restaurants and a list of things that would interest teenagers in Italy. To find out more, simply click a link, the movie will pause and you’ll be immersed in your next Italian vacation. Booking the holiday is simply a matter of a few more clicks.

The Devil is in the Details

At the risk of its breaking down, let’s take this scenario round the block one more time. Obviously, it’s not too difficult to know that Under the Tuscan Sun is about Tuscany and to match advertising content to that overriding theme. But new developments in file indexing allows for matching of advertising content to much more specific detail in the movie.

Let’s say that your wife happens to love the dress that Diane Lane is wearing when she goes to pay a surprise visit to her cad boyfriend (yes, I was convinced to watch the movie too). You, on the other hand, are rather intrigued by a quick glimpse of a car you see whizzing by in the scene. Sure enough, information about where to buy the dress, along with the rest of the ensemble and where to get your very own Fiat Barchetta, are both just one click away.

From Six Degrees of Separation to One Degree of Connection

Advertising is all about connections. Connecting to the right person at the right time with the right message. The mystery and challenge of advertising lies in improving your odds of making that connection happen. Up to now, those connections have been largely one way, from the advertiser to the consumer. Millions have been spent researching who might be watching CSI: Miami, but it’s still largely a shot in the dark. Advertisers create an ad that they believe conveys the right message, that will play in front of millions, hoping a very small percentage of those will be the right people at the right time. Vegas usually gives better odds.

As media converge online and those connections become two-way, the odds improve dramatically. Profiling online is inevitable. It’s already happening. As time goes on, more and more information about you and your personal tastes will become available to advertisers. Combine that with contextual information about your current online activity (the topic of the story you’re reading, the details from the TV show you’re watching) and the chances of getting to the right person at the right time suddenly swing dramatically in the advertiser’s favor.

What..More Advertising?

So, as advertising delivery channels proliferate and become more effective, does this mean we’ll see more and more advertising? Hopefully not.

It goes back to the curse of Lord Leverhulme, who quipped, “Half my advertising dollars are wasted. I just don’t know which half.” Advertisers don’t like to waste money. Despite appearances to the contrary, advertising budgets are finite. If advertisers find channels that work, they’ll stop using the ones that don’t. Believe it or not, this development may actually reduce the amount of advertising that we’re inundated with every day.

Let’s face it. It’s not the advertising that’s relevant and timely we hate. That actually serves a purpose. In fact, when we’re ready, we actively seek out advertising information. This is one reason search has been such a powerful marketing channel. It’s irrelevant advertising that wastes our time and drives us mad. If advertisers find ways to just give us advertising content that is highly likely to be of interest to us, they can stop forcing the rest down our throats. Finally, after hundreds of years of increases in advertising, a small win for the consumer might be in sight.

The Interactive Marketing Pane: Our Window to the World

How will this advertising be presented to us? The good news is that we will have a substantial amount of control over how delivery takes place. As the models evolve, users will determine how intrusive the advertising should be based on user acceptance. I’m envisioning a single pane built into every application window, discrete but always one glance away. This pane will feature highlights & headlines of advertising messages, with further descriptions available with a simple roll over. If the offer looks intriguing, one click will open a rich, interactive window that will act as a navigation point to explore further.

The final evolution of the delivery method will be determined by the balance between two opposing forces: the desire of advertisers to be noticed and the desire of users not to have extraneous advertising come between them and the activity they’re currently engaged in.

The Role of Search

Obviously, I can’t help wondering the role search will play in all this. This is all about connecting consumers and advertisers in a relevant way and that’s what search does very well. It connects us with the online content we’re looking for. For that reason, I believe search will be fundamental to the development of online advertising.

Delivery of advertising in this highly targeted, interactive way depends on two essential functions: Determining the right target and matching it to the right message. Search plays a role in both.

First of all, search can pull out the context of your current online activity. Through analysis of the words in the website you’re visiting, the document you’re working on, or even the video file you’re watching, it can determine the context of your current activity. It uses this to interpret where you’re mentally focused at the given time. If I can serve you an ad about Hawaiian vacation packages at the exact time you’re composing an email about wanting to visit Hawaii, the odds of you finding it relevant and compelling are quite high. Google already uses their search functionality to match user context with advertising messages in the AdSense program.

Secondly, once you determine the appropriateness of the target through contextual analysis and profiling, you have to find the content that matches what they may be looking for. Again, that’s the core functionality of search. The only difference from an existing search on Google is that we’re giving the search engine substantially more information with which to make that match. It’s not based on a single key phrase made up of a couple words. It’s based on an entire page of text, your likes and dislikes and even your past behavior.

Implicit vs Explicit Querying

As the transparency of search improves, with integration at the desktop level into every activity we do, there will be a clear place for two types of queries. First, with implicit searches, matches will be made based on interpretation of the information at hand, primarily the context of your current activity and the information in your profile. You will be constantly served a never ending stream of links that the system believes might be relevant to you based on those two factors. It will be up to you whether you click on them or not.

Secondly, there will always be a place for the user initiated or explicit query. Our minds don’t always work in logical or easily interpreted ways. Yes, we may be writing an email about visiting Hawaii, but within milliseconds our minds can go from Hawaii to the Aloha Bowl to the Super Bowl to the Washington Redskins to the federal election and suddenly we need to know where John Kerry was born. For this reason, we will always need search functionality that’s under our strict control.

Summing Up

I’ve lightly touched on a number of themes in this article, each of which could fill a dozen books:

The Convergence of Media Online

Newspapers, radio, television, movies, telecommunications and every other entertainment, communication or information medium we can think of, coming to us through a single pipeline. This is mind boggling stuff!

The Role of the Internet as a Personal Assistant

The newly evolved internet becomes the ultimate plugged in digital assistant, using our personal information to save us time by assisting in travel planning, daily scheduling, shopping or any of the other hundred and one tasks that eat up our day.

Profiling and Targeting of Advertising

The questions and implications that come with surrounding some of our personal information in order to help make our online experiences more relevant, rich and rewarding. There’s a trade off here and it’s up to consumers to determine if it’s worth it.

The Evolution of Advertising from Broadcast to Interactive Singlecast

What will it mean to advertising to be able to accurately target highly likely consumers on an individual basis and deliver them advertising messages tailored to them? Furthermore, it will be a two way channel, that allows the consumer to interact with the advertiser and further the relationship at their initiative.

It Comes Down to the User

All the concepts above are staggering in their implications, and the tendency is to rush headlong into the future, but we can never forget that technological innovation always has to balanced against society’s ability to absorb the innovation. The biggest factor is how long it will take for us to see these changes take place is not whether or not the technology exists. Much of it already does. It’s how long we will take to accept these changes, and in the process of acceptance, how we will change the end product. Technology becomes honed through public acceptance, refining itself into the form that best meets the needs of the greatest number of users. The evolution of advertising will be no different.