Thursday, April 20, 2006

Media Companies – Content in the Windshield, Advertising in the Rearview Mirror

In the recent weeks we have seen several ground breaking announcements regarding new content distribution policies from traditional media companies the likes of Disney, NBC and others. They have no doubt woken up to the dramatic shift in media consumption habits that threaten to undermine their distribution franchises. Users are increasingly spending more time and consuming more media online than through traditional outlets and if these outlets don’t figure out how to give users what they want they will become obsolete as distribution mechanisms. As Fred Wilson points out, “this is big big big”. And I agree this likely represents a major turning point. What puzzles me is on one hand Disney is smart enough provide time shifted free content on the internet in a form that likely to delight users, but on the other is going to tick off those same users because they are going to force them to watch the advertisements that can’t be skipped. And an even more ridiculous, but similar minded, is the announcement from Phillips that they patented a technology to lock user’s television sets during commercials so they have to watch the commercials.

The internet has opened the Pandora’s box of user choice when it comes to media consumption and I think this is even truer about advertising. Consumers don’t mind being marketed to; they just mind being marketed to badly. So why with all the richness and dimensions of creative freedom that the online experience has to offer why are marketers and media companies sticking with old habits and worse trying to force users into them. This isn’t just about embedded commercials in TV show downloads, we see it every day whether it’s some annoying pop-up, or a incredibly intrusive Coldwell Banker ad that seizes control of My Yahoo for the past three days. We can do better than that! I think we can make marketing and advertising less offensive more effective and even fun and useful for the consumer. We have been seeing evidence of this innovation in advertising for some time. Key word and context based text ads were that for sure. Others include recommendation based advertising on sites like Insider Pages, and even interesting online infomercials at ShopNBC. Even traditional media is looking at different models as this article on the increase in product placement indicates. But I think the best and most innovative is yet to come. Maybe even a marketplace for online product placements!

Dollars are flowing to online advertising at an every increasing rate because marketers are realizing that is where the audience is migrating. There is a fantastic opportunity for start-ups to accelerate this and reap the benefit. Several companies, including Clickshift whom I am involved with, are taking advantage of this opportunity by allowing marketers to buy and track advertising more easily. Another set of companies are beginning to emerge that provide unique marketing products and vehicles to take full advantage of the online experience and that are providing value to the consumers along the way. I have already seen several very interesing ones and if you have interesting ideas in this space would love to talk to you and help if I can.

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