Sorting through StumbeUpon, I came across AdobeCards.com, impressive little interactive ad. Well done, Adobe, right when I thought no one was doing anything interesting. If only it were a value priced creative license because Photoshop is no cheap date.

TiVo Effect
The Oscars just aired one of its worst showings and Patrick Goldstein of the LA Times nails the current consumer sentiment on advertising attention:

“The academy should heed his advice. Here’s how we watched the Oscars in my household: We TiVo-ed the broadcast, came back from Little League practice, hopped in bed with some snacks and zapped through the commercials…”

I’m all over DVR’s, too. An hour of broadcast content dialed down to 42 minutes? Yes, please. Netflix for season 1 of Battlestar Galactica is on order, ad free.

Strategically, the TiVo effect notes an even more damaging trend line: people arrange their technology to not watch ads. Like the old high-low pricing strategy, consumers are being trained to think in a certain way which feeds on itself. This trend won’t be fixed by forcing cable companies to end fast forwarding for on-demand, btw.

Return on Marketing Investment
Paid sponsor search advertising should be the best method of getting the right audience at the right time and give them a great message. Is it? Google is still tweaking their search and ad placement for a reason:

[source: comScore blog]

Ad coverage is being managed down, and CTR’s are also declining. Google is likely responding to the backlash of the noise that exists in the paid search world, click farming, which exacts an unexpected toll on a system that was meant to be superior to other venues.

Google’s CTR’s are down over the past year. Is a similar trend of consumer ad avoidance entering paid search like it is with DVR’s? Maybe. Google’s inability to have any other significant revenue sources other than paid search should be a concern because the company has already trained users on many other services from maps to finance to expect any advertising trade off. Of course, they can be seen as Google’s own advertising campaign of sorts.

Relevance Marketing
The next wave of interactive marketing will not be about paid advertising at all. Video and blog publishing cost almost nothing but time to develop it. Leading marketers are realizing that transparency is essentially a requirement nowadays. An aside, how awesome is Trent in building anticipation: “soon” is all today’s post says.

It Should be What it Always Was
User based needs turned into unique solutions then communicated to end users in a way they can learn about the offer to then take action. That’s advertising in a nutshell and it hasn’t changed.

Interactive advertising has a long way to go to meet up with its name. In fact, most of the advertising that Google and Yahoo provide isn’t interactive, it is just a more efficient form of classifieds followed up with almost 1999 web page as product brochure sales sheet. Google, et al, innovated the business model of classified, not the classified ad itself.

There’s a lot more to be explored here and with luck, a bit more on examples of what’s on track.

Contextual marketing has no page in Wikipedia, funny isn’t it? Funny in the sense that contextual marketing is at the core of Google’s AdSense platform. Google has redefined, and will continue to drive, efficiency and metrics into the advertising arena moving its influence from search to radio and to TV. While efficient advertising continually focuses on “the” desired target audience, advertisers will begin to turn the question from efficiency and effectiveness metrics in ad delivery (=push) to determining deep ad-sponsored relevance.

Google’s Actions

In fact, Google itself has blazed a trail doing exactly that, just this week. Google’s long tail user base is entrenched in blogging, video, and online publishing. The Google acquisition of Feedburner has strategic and financial rationale from an ad delivery standpoint, but its decision to make Feedburner a free tool shows another intent: increased relevancy to its core user base. Feedburner is part of the Google brand, and is now part of the Google ad-network experience. User advertising relevance is going to take on a whole new world well beyond the mere “push” attitude that exists in the current market definition, inclusive of most contextual ads.

With so much to be said about the $ size of the advertising arena, a contrarian opinion is to seek out advertising relevance covering sponsored activities, and not ad supported ones. Sure, in a way this can include things like in-game advertising, but in actuality, it is far more than that.

Advertising relevance in a world full of sales and brand messages will need to shift from ‘telling the consumer information’ to ‘providing the consumer with the tools of discovery’. These tools of discovery lead to the following framework for brand relevant advertising experiences:
1. Educational and beginner advisory content;
2. Customizable and configurable experiential software or venues;
3. Social elements for publicity, critique, guidance and/or networking and perhaps
4. Means for the user and host to profit.

The above four elements are technology agnostic as they could easily be in a store as online.

Businesses spend a wide range up to 30% of their sales on marketing, awareness, brand recall and promotion. For many businesses, this budget is well into the millions, or hundreds of millions annually. During the past 3 years, the costs of developing online technologies has dropped dramatically. With FOSS, versions of Digg and eBay can be downloaded for free and customized for a few thousand dollars into a niche social network. As a result, ad spots on the ever growing impression blocks stay very cheap, and inventory will continue to be hard to sell. Content will continue to explode, and choices on where to place ads will continue to grow in complexity.

Google and Yahoo benefit from complexity in the online ad marketplace. First, capturing and retaining cached content is a growing barrier for Ask.com, AOL, Yahoo and Microsoft. Second, the growing number of long tail publishers, relevant ones, makes individual selection of online publishers less possible each month. While TV and radio may be “all or nothing” shot guns with a difficult set of metrics to verify payback, online advertising’s inefficiencies are click farmers and brand connections to extremely poor quality publishers.

An Escape

Thinking differently, businesses should consider doing as Google does, . Google’s purchase of FeedBurner and the free-ware decision will foster loyalty and increased usage. Seth Godin astutely noted the same with Google Analytics. Analytics is not for boosting egos by showing big viewing statics, it is for attaining measurable and profitable results.

What about contextual meaning? I started on this topic and now I’ll come back to it. With the arrival of low cost open source technology and communities of interested people looking to get engaged (=buzz word), creating a move into this experiential world to drive business should be considered as an alternative to traditional and interactive marketing. Caution, this should be done in a credible way by the right players in the value chain. For example, how will bloggers feel about free Pro Stats from Google? I know how I feel, happy (thanks, Google, seriously).

Facebook’s API isn’t All That

Honestly, Facebook is a great networking tool. Its move into the lives of lots of people is having an impact. Many people, college kids and professionals, now have a new home that is an open market with guard rails. Very cool. It will be a place where users can push messages, but will Facebook create a world where people can learn, create and share?

Facebook’s widgets are billboards that allow users to have 1-way push of messages (=music preferences, videos, etc.), push of products (=Amazon, Gap, etc.), push of blogs and other info. As a result, “profitable” Facebook users will be ones that view the platform as a means to push messages to monetize it (more on this in another post). Do you have friends that sell to you? I don’t mean refer you to things, but want to make money off of you. As a note, I’m no fan of a world of being a “referral friend”, where my friend makes money on that deal.

Looking to Education + Customization + Sharing

Gary V. at the Wine Library has gotten some buzz for a story worth digging into, deeply. Understand that case study, apply it to your industry, win.

Wrap Up

Contextual marketing should be defined as the fusion of education, customization and sharing. The buying or creating of website portals that do all three of those things to the right audiences will be where web 2.0 gets monetized, and it won’t be because those websites had great advertising revenues.