Last night was a special summer edition of Third Tuesday Montreal. There were three presentations, in the style of Pecha Kucha (20 slides, 20 second each, for a total of 6min 40sec) and I had the pleasure of opening for Julien Smith and Sylvain Grand’Maison.

The title of my presentation was Cloudvertising: Social Media and the Future of Online Advertising, and it explored how social media will shape the way that online ads and marketing campaigns will be targeted. It was a great evening, and I had a lot of fun seeing old friends, meeting new people, and talking about everything from social media to hemp farming.

In any case, here’s the Ustream recording of the my spot, with the Powerpoint presentation below.

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I’m starting to wonder whether publishers might end up in competition with their own advertisers.

Looking at the 22 reasons people go online, it’s not hard to see why publishers can’t sell their ad space the way they used to. People go online primarily to learn, have fun, and socialize, and the web gives them on-demand access to those activities, so they ignore content that doesn’t lend itself to those activities — content that they’re not looking for, such as advertising.

So what marketers end up having to do is create marketing experiences that do lend themselves to those activities — interactive marketing experiences. As Josh Bernoff of Forrester Research reports for AdAge:

[...] marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement “we will increase budget for interactive by shifting money away from traditional marketing.” Only 7% said “we have no plans to increase our marketing budget.”

As if publishers didn’t have enough competition from an over-saturated content-marketplace, but now marketers too are vying for a slice of the entertainment pie. Of course, it makes sense for marketers to cut-out the middle-man as much as possible, but if they’ll never cut them out completel because independent publishers help legitimate the value of content consumption in the first place.

So what does this mean for publishers? Well, it means that they’re going to have to find new ways of working with advertisers without completely compromising their independence and authority.

While consumer publications can fall back mostly on a symbiotic editorial model (such as Vice Magazine has done), the model has limited potential for journalism outlets. After all, an independent editorial is part of journalism’s core product offering.

Of course, just as news journalism can’t accommodate symbiotic editorial as much as its more consumerist counterpart, marketers seem less likely to compete directly with journalism outlets. So perhaps the answer for journalism outlets is in becoming social news organizations that offer marketers better targeted campaigns through cloudvertising.

In any case, now that marketers are able to cut out some of the middle-man, advertising is never going to be the same again — but you didn’t need me to tell you that. And something else you don’t need me to tell you is that the publishing industry is undergoing a violent evolution.

The funny thing about evolution, though, is that sometimes it produces bastardized hybrids that end up changing the ecosystem they adapted to in the first place, and out-competing themselves into extinction. So it’ll be interesting to see whether marketing evolves into some kind monolithic monstronsity that cannibalizes its own young.

It probably won’t, but it sure is fun to entertain the idea.

Selah…

It looks like Microsoft’s (MSFT) re-entry into search with the launch Bing.com might have less to do with taking on Google (GOOG) as a search engine, and more to do with entering more uncharted waters: cloudvertisingg. Of course, this would still be putting them in direct competition with GOOG, but in more of a proactive way. In other words, rather than playing catch-up (which is what the launch Bing engine initially looked like), MSFT might be prepping to compete with the GOOG of tomorrow. As AdAge reports:

The software company and Mediabrands, the media division of Interpublic Group of Cos. that counts Microsoft as a major ad client, are collaborating to build a software system that marketers can use to track everything from search advertising and e-mail newsletters to CRM systems to TV buys in one place.

The logic is that too many of the tools used today to analyze and execute those various marketing functions don’t “talk” with one another, which creates inefficiencies and clouds decision-making. Microsoft’s goal is to create a single platform to do so.

In a nutshell, cloudvertising is about sourcing user data from a variety of internal (proprietary databases) and external sources (third-party APIs), and using that data to hyper-target according to their actual interests (not the advertisers), behavior, and even current mood. The result is better conversions and return on ad spend because users are shown ads that are relevant to them.

Presumably, the platform would use cookies and IP addresses to identify users, index their interaction with different CPM, CPC, and CPA ads, and then cross tabulate that data to serve ads that users are more likely to act on. Users would be better off because they wouldn’t be shown intrusive ads, and marketers would be better off because they could target consumers who are actually likely to buy, and not just consumers who they think might buy.

Should MSFT pull this off, they’d not only be competitive with GOOG, but would essenitally “cut’em off at the pass.” After all, search would only be a single facet of a multi-channel ad platform that can “decide” what ads to serve to which users.

Of course, chances are that GOOG is already working on something like this, and has been for a while. And if I was a betting man, my money would be on GOOG because their in-roads into cloud-computing country are significantly more extensive than MSFT’s.

A fully comprehensive cloudvertising platform would also have to leverage third-party, social media APIs to profile users beyond the platform’s database. By reading third-party social media cookies and indexing the activity and content on users’ social media profiles, such a platform could hyper-target users according to their actual interests and behavior much more effectively. And given that GOOG is first and foremost a cloud-computing company, they seem much better poised to deploy this technology than MSFT.

Who knows? MSFT may have been working on this all along and are only now saying something because they’re so close, or they might just be trying to
maintain investor confidence by maintain industry and market perceptions of them as a leader in technology.