Sunday, September 30, 2007
All Digital, All Commerce, All The Time
by Diane Mermigas
Get over the stale notions of what you think convergence ought to be.
It is becoming abundantly clear that every digital interactive device and platform will be driven by advertising, marketing and transactions. The digital era will invariably be about commerce before intellectual and altruistic pursuits. The connected consumer is the unifying catalyst. Accepting that realization makes so much about this chaotic and exciting transition easier to comprehend.
All the dazzling gizmos (like Apple's iPhone), search platforms (like Google), transaction springboards (like Amazon), social networks (like MySpace), content aggregators (like Yahoo) and communications services (like Verizon) are propelled by one conviction: Making a fortune by connecting targeted consumers with other people, marketers, services and content that most interests them.
That convenience may cost consumers more of their privacy, freedom and peace of mind than they want to concede. Those tradeoffs are at the heart of most Internet-related controversies, including all the grandstanding in Washington this week over whether its proposed $3.1 billion acquisition of DoubleClick will make Google even more powerful.
Don't blame Google for having the algorithms and savvy to give consumers and businesses what they appear to want from interactivity. It's too late for fear and resistance. The genie already is out of the bottle. The salient issue is how to embrace the unwieldy digital beast to get what you need without being eaten alive.
One prerequisite is accepting and understanding the commercial imperative of the new digital interactive landscape. Content may be king, but it also is a major means to an end. If a consumer gets hooked on an online video, Web site, service, communications or e-shopping platform, there are hundreds more that can be instantly and electronically peddled. The powers of association and linking have never been more potent and dangerous.
Every connected consumer becomes a profile treasure trove with the ability to generate lots of money for companies that pay for access, share revenues and complete transactions. Interactivity is becoming fundamental to everyone and everything, including pitching and selling products and services. And it will eventually provide the groundwork for the only kind of user accountability that makes sense-the most intrusive, but accurate click-and-track metrics that will make Nielsen Media's consumer samples and estimates seem like child's play.
The eventual convergence of all content and all ad platforms with all things digital should surprise no one, but it still does. Speakers at industry conferences, trade shows and government hearings wax self-promoting predictions and positions that sometimes smack of convergence truths. The whirlwind of daily developments and trends is overwhelming. Connecting all those disparate dots is an arduous task.
Here are a few initial observations about this paradigm shift.
*Just a few decades ago, consumers and advertisers trapped in an analog world were convinced that media conglomerates (broadcast networks and film studios) were monopolistic forces driven only by the need to transform their estimated TV viewers into ratings points, which could be cashed in for premium ad dollars. Although they are still struggling with that commercial mandate and archaic measurement system, the big media players have been reduced to smaller fish in a bigger pond. Will we be saying the same about Google 20 years from now?
*When not only monetizing but manipulating consumers becomes media's singular goal, via fragmented niche users and communities, it may lose sight of loftier endeavors, like truth and knowledge. Those stakes are bigger now than when 30-second spots invaded prime time and news shows. There is strength in special-interest communities that is yet to be tapped. Just how niche and far down the long tail can advertising and content get and still be commercially viable? We're about to find out.
*The gold standard of interactive marketing will be catching the consumer at the opportune time. One of the goals will be anticipating individual needs or wants with a coupon or message on a portable digital device that can be used to make a purchase. Why then are local media and advertisers so slow to catch on? National advertisers are already on it, using new GPS and texting software being designed for mobile devices.
*If the advertising overlay on Facebook, Google's YouTube and News Corp.'s MySpace look like creeping commerce, it's because it is. Deal with it. Google refers to itself as a tech force creating an ecosystem for information online. But what good would these ecosystems and social communities be without adding a commercial element to pay the way?
*If you buy the convergence-in-all-things theory, then there is plenty of sense in Google's attempt to spread its search analytics and new applications to the wireless spectrum where it can behave and charge just like any other utility. Likewise, Amazon's new digital MP3 music store answer to Apple's iTunes, and Microsoft's aQuantive response to Google's proposed DoubleClick display advertising initiative are just the opening salvos in a lively competition across all media, advertising and commerce lines.
*All forms of competing advertising are on a convergence path. So why have newspapers forfeited their online future by giving up their core classified advertising to Craigslist? Conversely, Yahoo is on track to restore positive revenues for its seven newspaper partners as early as 2009. The lines of demarcation so painfully drawn today between so-called new and old media must dissipate for the creation new economic value and opportunities. From the Internet to television to newspapers, all media eventually will settle into a continuum across which content, services, consumers and advertisers will interchangeably move.
*If you think the nearly $290 billion ad pie is big, just wait until it morphs into all digital marketing and commerce. As the lines blur, the economic imperative becomes selling what you can to whomever you can in a click. The smart phone will be the premiere interactive device, which means more iPhone copycats and more intriguing creative changes in mobile advertising, commerce and consumer behavior.
*All the flip allegations about Google wanting to take over the world demonstrate a patent ignorance of reality. The Internet and digital interactivity is borderless, just like Google's economic designs and ambitions. Why aren't other U.S.-based businesses aggressively following suit?