Big Media & Entertainment vs.The Ad Industry...who will triumph?

The question is who is in a better position to service the largest shift in how brands communicate? Traditional Advertising or the Entertainment and Media industries.

The convergence of the internet and traditional TV, social networking, blogs, vlogs, widgets & Googles have changed everything.  With the ability for anyone to publish, consumers no longer have the patience for traditional 'push' advertising messaging.  They have been given the controls, and are unlikely to give them back. The brands that connect in the future will be those that can do more than just get involved in the conversation with their audience, but those that produce something of value for them.  Whether that be in the form of information, education, software, games, social networking or via entertainment properties.

This has naturally started a race between the traditional advertising agencies and the media/entertainment industry to see who will best be able to service this shift.

The agencies own the brand relationships and know best how to engage the brands in order to deliver marketing solutions against product & brand strategies.  The agencies also know how to execute across multiple mediums, but media fragmentation has slowed them down and they can no longer execute efficiently.  What they cannot understand or execute, they buy, but fail to assimilate - which eventually cripples the integrated offerings they have struggled so hard to create. They are also losing the trust of their clients as they struggle to keep up with digital media along with creating a convincing & authentic narrative which ultimately delivers authentic audience engagement.

Media and Entertainment have the opposite problem. They know how to deliver engagement across media platforms but lack the experience of creating strategic, bespoke solutions for brands across multiple markets. They know they need to move away from being realtors of space and time, but they are hampered by their sales departments who are holding onto age old relationships with.....gasp.....the agencies!

As I look for my next opportunity, I also struggle for clarity on who will be the winner. Perhaps that is the wrong way to look at it. Perhaps there will be no winner, or loser. Perhaps the two sides need to realize what the other's strengths are and partner to service this revolutionary transformation. If so, what will this mean? Should agencies rid themselves of creative departments and focus on strategy, media and local market implementation, while entertainment focuses on content, a dialogue, transparency, personal expression, experience, reinvention, connection via audience participation and integration?

Whatever the solution it is certain to shake our industries to their core.

At every industry event I attend, questions along these lines addressed to the panelists in the spotlight spawn answers fraught with the political undertones of a presidential race that are about as clear as fog. A clear sign that change is afoot, leadership is scarce, and the shake-up is just getting started.

Software is a new form of media!

Widgets...those pesky little viral applications that spread...well...like a virus, hunting you down via email while simultaneously polluting your Facebook page. Gosh-darn-it, some of these applications are damn useful, like CareerBuilder that allows me to track the emerging job market in Asia, or Qloud that enables me to stream all of my friend's music for free. I mean, EVERYONE has Funwall! It won't be long before the Funwalls of the world are brought to us by brands like Staples or OfficeMax. Anyone send an Elf-Yourself greeting last year? Elf-Yourself widget anyone? Sure beats another vampire bite! Anyone know what I am talking about? Make sense?

So, what does this all mean? First off, the smart brands have finally acknowledged that they have to bring value to consumers in order to build the relationships they crave. But are they ready to move to the next step? Building software.

The notion of building value via software takes on a larger psychological & sociological shift in the way we view media and how we connect with consumers. Marketers have had to literally pay their way into the public space via the media buy, but what if they were invited in by the consumer - which would be nothing short of a sociological revolution! This is waaaay bigger than the 'Pull' vs. 'Push' strategy. Imagine if Brand communications were as valuable as the products and services that we, the consumer, are willing to pay for...a brand extension of sorts. A new 'soft' SKU?

Think about it? Brands have access to API's like any other developer. There is nothing stopping them from developing applications that will allow them unfettered and free distribution to the audiences of Facebook, Netvibes or the iPhone for example.

Now, I am sure that if Brands did start to go for this in a big way, that the Facebooks of the world would charge them a tariff of sorts. But in this world content is king and if a Brand is truly delivering something valuable to the platform's viewer base, it suddenly has bargaining power...much more than it has ever had in the past.

This is what Steve Ballmer means when he talks about the fact that the lines between media and software are blurring.

Confused?...log onto Facebook and make sure you get a vampire bite. The effects are immediate and the transformation is forever lasting.

The end of pre-roll ads...finally!

Watch the latest videos on YouTube.com

(Play the video above to see)

Finally, the players in online video are adapting to the fact that the way in which we interact with video online is completely different from our experience with linear TV. More specifically, most users are turning away from video with pre-roll advertising. It could be the fact that most pre-rolls are commercials made for TV placed in front of short form content, but I don't think so. This is a very different medium and our time is most often limited when viewing content.

The most recent solution seems to be pop-up type banners at the bottom of the video window while the content keeps playing. You can wait for the pop-up to go away, or you can close them right away. You also have the option to scroll through even more of them. Funnily enough I found myself doing this because the banners were relevant to what I had chosen to watch. Was it because I am in the industry? It may be, but I found myself doing it at points I was bored with the content of the video itself. The lesson here is if you give the user the power to interact, they will use it. In this case it works to the ADVANTAGE of the advertiser. WOW!

Maven.net and YouTube are the largest adopters of this approach, but others will quickly follow.

YouTube has also added to both its Custom and AdSense players. These are players that you can build with content of your choosing in order to post on any site or blog that you want, including content from the major networks. It is truly a revelation to see content from the major networks with NO pre-roll advertising, but pop-ups instead - knowing that this is likely to set a very real precedent. The small pop-ups offer a terrific alternative to traditional advertising, with the option of linking to a commercial or any other content that an advertiser wants to share with us if we WANT to see it.

...but wait a minute, does this really matter?....I mean, most people still watch TV right?

Yes, BUT this year almost 16% of American internet users watched full-length television shows online, according to a new report released by The Conference Board and TNS. This is double the amount recorded last year. Personal convenience and commercial avoidance were the two top motivating factors. Nearly 73 percent of online households said they use the internet for entertainment purposes on a daily basis and an additional 15 percent search for entertainment several times a week.

From all of this you can only draw a few simple conclusions. Once the convergence of TV and the internet is fully realized, commercials will most likely disappear in their current :30 & :60 forms. Why? Because our habits are being driven by our fast-changing relationship with interactivity, and the web is leading the way.

The transformation is happening sooner than you think; so agencies, brands and media owners who don't adapt...beware! Time to seriously start dismantling those big TV ad shops and figure out what content consumers will ask for...figure out how to get your clients to bring value to their customers through these much more valuable new forms of interactivity.

...and please STOP asking me if you can just place those :30's on the web...NO!

If you think this warning is dramatic or out of touch...know that I HAD to add the word 'ad' into the title of this blog as a senior executive from a major agency whom I was in a meeting with last week did NOT know what 'pre-roll' meant. SCARY!...but SADLY true...