The ad business offers a curious take on supply and demand in that the same supply must somehow satisfy two demands.

The supply is represented by the overall ad inventory; billions of ads in myriad forms across a vast array of media, all competing for the same eyeballs. The demand, however, takes two forms: There’s the internal industry demand, in which an advertiser seeks exposure via a specific media supplier, and then there’s the external consumer demand for the information conveyed in those ads.

Trouble is, in an on-demand world, there is no consumer demand for advertising, leaving us with an industry that preys on itself through insider trading in a commodity in which no consumer has any interest at all.

Totally lost in this incestuous relationship is the ability to engender affordable big-brand reach and audience scale. Yes, it’s possible to scale the supply, but so what? That only keeps the intermediaries busy chasing their own long tails. What our industry needs – and what every big brand on the planet seeks – is a way to scale consumer demand. And we can’t reach consumers with a product (ads) that no one wants and everyone is equipped – and inclined – to avoid.

Industry reaction to this conundrum has been predictably myopic. In our quest to reach a recalcitrant audience, we ask the wrong question first, all but guaranteeing a domino effect of wrong answers. For example, it makes no sense to ask—or even worse, assume—what kind of ads consumers prefer, because they can’t possibly have a preference for something they don’t want in the first place. It’s like asking someone who’s facing execution if they would prefer to have their head chopped off or be burned at the stake. As they say, ask a stupid question, get a stupid answer (despite Curly Howard’s assertion that a hot steak is better than a cold chop).

When online display ad CTRs began their precipitous decline from 5% just a few years ago to less than .1% today (a 98% reduction), the writing should have been on the wall. How did the digerati spin this? They ditched the click-through as a meaningful metric—despite the fact that it’s the only online metric that measures actual response—and reverted to the same soft metrics they had previously accused the broadcast folks of hiding behind. So much for accountability. Worse yet, these legions of 20-somethings (many of whom weren’t yet born when an advertiser could reach 70% of the marketplace through just three television channels on any given night) misinterpreted reach as a supply-side metric. Anyone with an ounce of media experience knows that reach is an audience measurement and has nothing to do with the supply. Reach can only be achieved in a linear application. It literally means to reach someone – not something.

To make matters worse, we now we have behavioral targeting proponents straying even farther from the path. Relevance, resonance, recency…all ways to justify perhaps the most idiotic marketing meme ever conceived. BT, like all targeting methodologies, works against scale. It uses customer data gleaned in the rear view mirror to navigate the road ahead. Essentially, it’s like driving blind. In so doing, BT doesn’t talk to prospects and falls victim to the same logic that dictates why you can’t reach anyone with a product that no one wants, relevant or otherwise. Worse yet, BT attempts to legislate taste; an impossible task that only further reduces the prospects for success. Ask Charlie Tuna and he’ll tell you that Starkist doesn’t want tunas with good taste, they want tunas that taste good. And what does it say about how far we’ve come when an animated fish knows more about marketing than we do?

The truth is, we do know we’re in trouble. We’re painfully aware of it even if we won’t admit it. How else do you explain online “impressions” priced at less than a buck per thousand? We have a demonstrably worthless oversupply of inventory for which there is self-serving internal demand, and absolutely no external demand. Stated another way, we now have more places for advertisers to waste their money than there are consumers to waste it on, yet we persist unabated in this folly to the tune of billions of dollars per year with virtually nothing to show for it.

Meanwhile, radio and television, both shadows of their former selves, are enjoying a dead-cat bounce at online media’s expense as desperate advertisers cling to the reach devil they know. Let me reiterate: You can’t scale what you don’t reach, and you can’t reach anyone with ads they don’t want.

The media model that will ultimately realize the promise of the digital revolution will be one that recognizes the foolish futility in scaling the supply. This model will draw upon the lessons learned in the halcyon days of radio and television, when sponsored content was king and advertisers knew the audience was there for the show and not the ads.

Next up in this space: Scaling the demand.

[What follows is a fictional leaked memo regarding the state of brand marketing from the perspective of an imaginary insider brand manager]

Memo To: All Company Brand Managers
Memo From: Anonymous

Fellow brand managers, it is now 2010 and unless we face up to reality, our respective brands will continue the precipitous declines they and we have experienced over the past 25 years.

Perhaps it’s time to remind ourselves that we are the architects of our own shortcomings and only we have the power to rehabilitate ourselves to rekindle the vestiges of former glory. But in order to do so, we must first subject our inclined perceptions to the scrutiny of common sense.

We must reverse our all-consuming inclination to sacrifice both brand and business on the altar of the spreadsheet. The MBAs in our midst have been systematically winning the day, fiddling the same tune as Rome burns. We must confront those whose mission is to sell management on every new targeting technology and/or methodology that comes along.

The targeting meme has become so entrenched that few people even dare to raise their voice in opposition. Branding relationships have been reduced to seemingly rational, transactional metrics that fit the spreadsheet. But targeting doesn’t scale. It leads to ever more niche marketing…and ultimately niche thinking. Since we become our attentions, we now think small. It is our niche mentality that obfuscates a simple truth: brand building is all about audience reach.

To understand how this misguided, uber targeting meme can destroy a brand, a simple “what if” is in order: What would happen if EVERY ad impression resulted in a sale? In other words, zero “waste”? Every ad impression would only be put in front of customers ready to buy. A 100% effective targeting campaign.

Sounds perfect, doesn’t it? But this is actually the road to any brand’s destruction. This would hasten the demise of the brand, as only customers would be reached…no prospects. The promise of uber targeting is to market to existing intent. What is left undone – virtually abandoned – is the act of influencing and persuading prospects – the essential brand-building blocks that targeting always misses. We have lost our brand evangelism.

Without evangelizing our brand, we are left with an ever-shrinking congregation.

Collectively, we brand managers have billions of dollars to spend to help build and foster the relationship between brand and audience. In our vain pursuit of “efficiency”, we have unwittingly, albeit it purposely, fostered the fragmentation of the media marketplace.

By supporting unsustainable niche channels, niche magazines and niche websites, we have made mass reach all but impossible. We have fashioned the Internet, which is arguably the most scalable mass marketing opportunity ever devised and rendered it virtually impotent. We have subsidized the decline of our own brands. Our tepid response to our own foolishness has been to double-down in the conception and creation of new, niche brand offerings. We’ve built a house with 250 million rooms that no one can live in comfortably.

So what is to be done?

The first order of business is to stop encouraging the excessive narcissism that this plethora of choices has created. We have fashioned a fragmented, self-indulgent consumer and media environment. In today’s hyper-paced world, change is the only constant. We must make hard decisions to move to sustainability, because business as usual cannot sustain us.

What is sustainability?

It means culling the herd and determining which brands are sustainable and which media options can best sustain them. The big box retailers are ahead of us in this respect, evidenced by their drastic reductions in stock-keeping units (SKUs). But they are making decisions based on perceived weaknesses in the media ecosystem rather than by exploring the promise and possibilities of scale. We must refuse to accept the status quo as a fait accompli; refuse to follow the path of least resistance; refuse to concede that we are fresh out of new ideas.

From our agencies, we must demand scalable media solutions. They have encouraged this niche-marketing nonsense long enough, and we have bought into it hook, line, and sinker. We need to reach people… really reachthem, and we never will if we spend all of our time chasing our own long tail.

The Internet can be the next great media platform to build our brands if we change the way we think of it. But we can never achieve our goals if we continue down the same road we have traveled.

Let me begin by stating what this book is not about:

It’s not a mere diatribe against science and technology.  Other more learned authors have already cited the ill effects of elevating technology to theology.  Besides, I am very much the product of a technology-driven environment, and enjoy too many fruits of technology to turn suddenly sanctimonious.

It’s not a plea for a return to religion: In practical terms, institutional religion cannot compete with technology in a consumer society. Most responsible religions preach moderation, and moderation is anathema to a pagan institution like consumerism. And whereas religion might be able to accommodate and incorporate science and technology, science and technology will never reciprocate.

It’s not about managing the insane logistics of modern life more efficiently because that’s the mantra of technology, and therefore the primary problem, not the solution.

And it’s certainly not about finding the God within, although it will require us to slam on the brakes on occasion and—in the words of Gandhi—turn the spotlight inward.

Simply stated, this book is about our societal and personal relationships with runaway technology, how those relationships—left unexamined and unattended—adversely affect the quality of our lives, and what remedial steps we can take to restore and improve the quality of life for ourselves and our children.  This book is a plea for sanity and faith and moderation in all things, technology and science and media not least.

I remember the grand promises of technology from my boyhood in the 1950s and ‘60s, promises later buried or abandoned altogether in the 1980s and ‘90s, and I wonder what the hell happened.  When and how, for instance, did we come to reconcile technology’s promise to feed a hungry world and eradicate disease with the daily starvation of thousands of children and the epidemic growth of degenerative pathologies like cancer and heart disease?  What happened to the Great Society’s war on poverty?  Or our multi-billion dollar high-tech war on cancer?  And speaking of wars, how do we explain the proliferation and brutal savagery of local armed conflicts with fifty years of nuclear weapons—the very technology designed to end all wars?  More recently, how do we reconcile the promise of the paperless office with the wholesale destruction of the very forests it promised to save in the first place?

And I recall that not too long ago the generic sales pitch behind most consumer technology was the promise to generate more leisure time.  In fact, social scientists and economists engaged in serious debate about the implementation and effects of a 30-hour, four-day work week, the inevitable byproduct of a benevolent technology.  Or so we thought.  Of course, the end of cheap oil and the introduction and subsequent ubiquity of the microchip brought that discussion to an abrupt end, and now most of us would be more than happy to settle for a mere five-day, 60-hour work week.  The captains of industry—abetted by Madison Avenue with its customary aplomb—didn’t miss a beat, and simply shifted gears en route: To compensate for the leisure time that never materialized, they introduced the concept of quality time. And when they realized that few of us actually had the time for quality time, they invented then promoted the notion of more productive time instead, the ability to do more in less time, which—almost needless to say—constitutes the exact opposite of leisure time.

Indeed, the closer I looked the more I noticed a considerable gap between the promises of technology and the realities of technology, a gap that on closer inspection seems to grow as technology accelerates, a gap that warrants exploration and mediation for three primary reasons:

Technology is all pervasive.  No relationship in modern society demands more from us—physically, mentally and emotionally, spiritually, and socially—from the moment we are born to the moment we die than our relationship with technology.  As the pace of modern life continues to accelerate—as both the number and sheer complexity of daily tasks grow—we find ourselves engaged in the mindless and numbing devotion of ever more time and resources to the minutiae and maintenance of ephemeral relationships with the technologies in our lives.  Eventually we discover—usually via some traumatic or catastrophic event—that relationships with our loved ones, our gods, and the things that otherwise imbue our lives with real purpose and direction, have suffered and atrophied from neglect.  Time, we come to realize, is our only real inventory; how many of us will go to our deathbeds wishing we had spent more of it at the office?

The growing gap between the promise and reality of technology reflects an erosion of faith and moral authority.  Science and technology are jealous gods, and do not tolerate any authority except their own.  Yet the quality of life suffers when our confidence embraces only those things that can be measured, quantified and otherwise explained by experts as component parts of scientific models.  Art and history and tradition and love and grace and humility and soul and faith are lost, each offered up in sacrifice on the altar of science and technology.  All that remains ultimately is a heap of broken promises and a society of cynics—the real legacy of a future without faith, a future driven by science and technology for the sole benefit of science and technology.

Ironically, however, the gap between the promise and reality of technology is where we will find the opportunities to restore and improve the quality of life.  Several thousand years ago, the ancient Sufi priests said we become our attention, an observation based initially on faith and since confirmed by the science of modern subatomic physics.  Nothing material exists, they said.  And so also say the priests of modern times, the physicists.  There is no material existence, they agree, only a tendency to exist—and only when we look for it, only when we turn our attention to it.  So it is safe to assume that as we turn our attention to the problems inherent in the gap, the opportunities therein will emerge.  In fact, the gap between promise and reality bequeaths an entire universe of hidden opportunities.  We only have to look for them.

Our sojourn through the Quality of Life Handbook features three primary sections; think of them as you would the three basic steps inherent in any trip to the family doctor: history, diagnosis, and treatment.

History: First we’ll explore the gap between the promise and reality of technology.  We’ll examine our cultural fascination, susceptibility, and addiction to science, technology, and the media, then identify and examine the stealth technologies of modern society, and how these hidden technologies adversely affect the quality of our lives—under the simple assertion that we can’t deal with something we can’t see.

Diagnosis: Next we’ll construct a working definition for the quality of life, and apply it immediately on the Centrifugal Map ^®, an elegantly quick and easy way to identify the problem areas in any relationship with any person or thing.  The Centrifugal Map, to my knowledge, is the first and only graphical diagnostic tool ever devised explicitly to illustrate how the relationships in our lives contribute to the overall quality of our lives.  There are no new age terms to learn, no numbers to add, subtract, multiply or divide, and it requires just a minute or two to complete.  Most important, it compels us by design to ask the right questions and assess the quality of life each and every time we use it.  In short, it works.

Treatment: Once we’ve identified the problems, we’ll learn how to turn our attention to them one by one—and discover the opportunities inside each.  We’ll learn how to mitigate our addiction to technology by learning the right questions to ask, how to identify and apply those things that contribute to the quality of life, and how to re-introduce ritual in our day-to-day lives as antidote to technology and media overdose.

The tenets represented in the Quality of Life Handbook offer, I believe, our best hope as individuals and society to narrow the gap between the promise and reality of technology, and improve the quality of life. The journey is sometimes painful and difficult, sometimes joyous and heroic, and there are no shortcuts.  Regardless, it is a journey we cannot defer any longer. And like all journeys, this one begins with the first step…

A brief history on how and why the digital ghetto came to pass…
It started back in the mid-1990s, when the youthful digital marketers of the dot com era first decided (unconsciously) to abandon brand reach for the sudden, technology-driven promise to micro-target audiences – all in an effort to distinguish the digital channels from their more established (and credible) analog counterparts.  In retrospect, it was a tragically bad idea, for manifold reasons, but mainly because the practical result was to eradicate online the one thing big brands truly want – scalable, big brand reach – irrespective of the medium.

In the myopic fog of their big-budget envy, digital marketers saw fit to raise a firewall between themselves and other media professionals.  The same self-imposed firewall, however, very soon gave rise to a digital ghetto mentality, one with its own unique marketing vernacular, and its own rules of engagement.  The digital denizens inside the ghetto “got it” while those beyond the ghetto walls didn’t (in spite of their obvious success and big agency clout).

Sure enough, digital marketers became their attention, and the frustration they felt at their utter inability to crack big media budgets at big media agencies soon evolved into a doleful refrain that continues unabated to this day.  Digital media budgets remained disproportionately small, and digital media campaigns never truly evolved beyond what might be described as a perpetual test mode.  Meanwhile, evolutionary thinking in the digital media channels pretty much started and stopped with search marketing in the late 1990s, while almost all subsequent digital contributions to the larger brand advertising dialogue continued the micro-targeting folly.  Predictably, niche audiences continued to shrink with each technological iteration, until the tallest-midget competition that ensued resembled a variation of the Maccabi Games – fun perhaps for the digital ghetto dwellers to debate amongst themselves, but without much gravitas or impact in the much larger world beyond the ghetto walls.

Fast forward: There’s only one thing at the end of the day that will raze the digital ghetto walls, only one thing that will set the digital ghetto dwellers free.  Digital marketing’s messiah – like that of every other commercial medium – is scalable big brand reach, the same big brand reach that made print, radio and television so immensely powerful and successful throughout the last half of the 20th century, and the same big brand reach whose sudden absence in the first decade of the 21st century now threatens virtually all media channels across the board.  Ironically, while the ability to deliver big brand reach in the digital era is now greatly diminished across print, radio and TV franchises, the prospects for scalable big brand reach online are finally – with the saturation of online video – poised to emerge.

Fortunately for digital marketers, the successful emergence of big brand reach online (not to mention the access to big brand media budgets that will surely ride shotgun with it) doesn’t require the development or addition of any new technologies whatsoever.  Quite the contrary: if anything, the promise of big brand reach and big brand budgets online can only be delivered by a process of deliberate simplification, one that begins – as always – with subtraction and disintermediation.

What does that mean?  First and foremost it means we need to stop trying to finagle new ways to distribute intermediary ad messages to consumers who just don’t want to see them and are thoroughly equipped and utterly inclined to avoid them.  It means we need to remove the intermediary layers of targeting technology and messaging that currently stand – like the walls of the digital ghetto – between consumers and brands, the same layers of targeting and technology that have driven up costs and otherwise done nothing to enhance brand communications for the past generation.  Heretically, it means we need far less targeting, not more.

It means we need to replace the ads that no one wants with something everyone wants instead: video.  (Everyone with high-speed access snacks on video; indeed, there’s almost no other conceivable reason for anyone to pay for high-speed access.)  And while we’re at it, it means we need to change our marketing metaphors as well.  Instead of targeting, instead of hunting elusive consumers with high-tech ammo, we’re far better advised to cast a line with better low-tech bait, and let them come to us.  We’re far better advised to fish rather than hunt.

In reality, commercial media are and always have been on-demand, regardless of the medium, and audiences everywhere always behave in the same binary fashion: either they deign to show up or they don’t.  Either way, the decision is theirs alone, and has little or nothing to do with our ability or desire to target and hunt them down, and everything to do with the bait we use to attract them.  Thus, in the much larger reality just beyond the digital ghetto walls, we never really reach the audience at all; we don’t need to because — in the on-demand world of commercial media — the audience always reaches us. And here’s the kicker: they always qualify themselves en route. The fundamental commercial audience/content dynamic always remains constant and intact, irrespective of the medium: certain content attracts certain audiences, plain and simple.

Razing the digital ghetto…
Attract, deliver and engage: the three component parts of a successful online ad campaign.  Clearly, the current advertising-as-intermediary model can’t measure up.  It doesn’t attract consumers – who don’t want the ads in the first place – so it can’t possibly deliver them anywhere in scale, and the quality of the engagement at the destination site (like everything else) has taken a distant back seat to our obsession with targeting.

What to do?  We need to invert the model: instead of burying the ad message in the content, we need to bury the content in the ad message. We need to attract, deliver and engage the audience in a manner and place that…

1. doesn’t intrude upon consumer privacy,
2. doesn’t put the brands themselves at risk in the process, and
3. puts the terms and conditions of the engagement itself completely in the hands of the advertisers (who pay for everything).

The best way to accommodate all three of the above conditions is to…

1. use the lure of quality video content (instead of ads) as bait to attract consumers, then
2. deliver them – self-qualified, of course – directly to advertiser destination websites, where
3. the promised video content is consumed on site as an integral component of more immersive, risk-free and engaging brand environments.

Attract, deliver and engage. Of course, it’s harder now than in years past, in large part because – until recently – brand advertising was only expected to engage and deliver (no one in their right mind expected the ads to attract anyone).  The early radio and TV pioneers knew full well what the first generation of digital marketers seem to have forgotten (or, more likely, never learned in the first place): that no audience would ever be attracted to a program for the ads, and that the ads were – at best – tolerated, and only then because no one wanted to get up off the couch to change channels.  Well, those days are long gone, and the only excuse for the legacy advertising-as-intermediary model that still dominates to this day is sheer industry inertia and the perceived absence of viable alternatives.

While no amount of technological lipstick can turn this sow’s ear into a silk purse, we have the opportunity – right now – to raze our digital ghetto walls and replace them with the real Holy Grail of advertising: scalable, big brand reach. But we can’t do it by targeting our audiences to death.  Nor can we do it with wishful thinking, by convincing ourselves that audiences somehow demand relevant ads.  Technology is not the answer (Albert Einstein once observed that no problem can be solved by the same thinking that created the problem).  So remember the simple keys to advertising success online:  First, subtract and disintermediate; get rid of what you know doesn’t work.  Then, design your online campaigns to attract, deliver and engage. Don’t push.  Pull.

Jaffer Ali, President of Vidsense, can be labeled a provocateur because of his very different and cutting edge views on the future of the media. And yet, his thought provoking opinions and insights cannot be easily dismissed. Jaffer has been on the cutting edge of the digital business for over 25 years and has experienced the rise and fall and rise of media from many vantage points. His latest venture, Vidsense, bundles video content and viewers and delivers them directly to advertiser websites in an interesting and user friendly manner.

CW: Jaffer, What is your background – how did you get to where you are today?

JA : I started out in the home video business way back in 1982. My family started an independent home video label (MPI Home Video) and we distributed the Beatles’ films Hard Days’ Night, Help!, Magical Mystery Tour, Honeymooners’ Lost Episodes and many other classic TV shows.

I left the family business to create a direct-to-consumer video marketing company. We sent catalogs in the mail to video buyers. We created joint ventures with Home Shopping, Sneak Previews and even country star, Ray Stevens. We purchased every type of media in those years; radio, TV, print, and even tried billboards. After selling that company in 1995, my sister, cousin and I moved on to doing television direct response. We sold videos with DR commercials. Some of our success was with Riverdance and Lord of the Dance. Of course for every one hit, there were 15 disasters. The business was a hit business and we were always chasing the next hit which proved economically challenging.

So in 1997, we started experimenting with selling videos online. We bought advertising from EVERYONE back then…even cut a deal with Mark Cuban’s AudioNet (before it was renamed Broadcast.com). We tried banners, audio banners, we streamed video in 1998 with Mark’s company. Of course the video was a postage size image and with dial up, the quality was anything but useful.

We were doing only DR online back then and discovered only one medium that worked; email newsletters. We discovered a niche of text email newsletters that we could place text ads in and get an enormous ROI. We found 16 of these that we were advertising in weekly and decided to create our own publications/newsletters in 1998. We created a daily joke newsletter, bizarre news, recipes, film quotes, and inspirational quotes.

We not only were an e-commerce company selling videos, we now owned our own media. We grew rapidly and within months had 100,000 subscribers to 6 different publications emailed daily. That totaled 6 million ad impressions per month since we deployed daily and each publication had 2 ads.

We decided to offer 50% of our media for sale and contacted EVERY ad network in 1998. Not a single network knew what to do with our ad inventory. But we knew first-hand that our media was the best available online because we had tried everything. But no ad network wanted our inventory. So Nov. 30, 1998 we created the Pulse Email Newsletter Network or PENN with our owned and operated newsletters plus added the non owned publications that we were already buying space inside.

We had 21 publications with 610,000 subscribers in the network. Intel was our first advertiser and we were off to the races. At its height, we had 62 million subscribers and over 900 publications in the network. Our client base was Buy.com, Pets.com, eToys, British Airways, Zing and many more.

The dotcom crash, SPAM clogging in boxes and 9-11 hurting our travel clients took its toll. In 2003 I wrote a business plan on how to bring video clips to the Internet and offer DVDs for sale. Sort of an MTV with an ordering option. We began to get license deals with home video companies.

We created one of the first video portals called Evtv1.com. In addition to selling DVDs, we sold pre-roll. NETFLIX was taking all we could deliver back in 2005 and that is when we noticed major problems with pre-roll. Users hated them. Click thru rates declined quarterly. Only 1 in 3 clips could carry a pre-roll without destroying the user experience.

Then in 2008, lightning struck. The question hit me; What if the video view could be terminated on the advertiser’s website and we delivered the streamed clip AND the visitor? Vidsense was born with that question. We got funding in 2009 and started proving the model. The Vidsense network now generates more than 11 billion monthly page views, and can drive more than 250 million monthly visitors to brand websites bundled with licensed video clips. Vidsense has more than 20,000 publishers participating in our network. These publishers/websites place our “Video Snack Bar” on their sites and they make more money per video view than if they placed a player on their site. Vidsense offers safe, scalable brand reach for the advertiser. For the publisher, we offer a way for non-video sites to offer video snacks to their visitors without licensing and technology issues. For the content owners, we offer a fair royalty for their content. In short, we offer a sound media ecosystem.

CW : What is the payout for the publishers?

JA: We actually do something few networks actually do; we negotiate with each publisher upon acceptance into our network. We do not have a set payout that goes for every publisher. The only thing we guarantee is that our payout will be higher per video view than any other video network out there. We just insist that the video view play in a new browser window.

CW: What do you think are the next trends in the online advertising environment?

JA: Presently, most of the media and advertising models have not been created for advertisers to scale. Google may scale for Google, but it certainly doesn’t scale for advertisers. That is why they need 1.5 million advertisers. They cannot deliver millions of visitors to a brand website every day.

We will see new ad models that have scale as a point of departure and not as an after thought. The present online ad environment was created for niche, “long tail” marketers. Having a scalable ad environment will reverse this idiotic trend. This will then attract the huge brand ad dollars that have largely stayed with television. Scalable reach will be accompanied by a trend of brand websites controlling the eyeball on sites they own instead of renting eyeballs on publisher sites.

We also believe that the definition of online reach will dramatically change. Why? Because current display banner ads just might be the most useless, ignored advertising medium ever invented by man.

CW: What are your views on consumer privacy?

JA: I have also written about this extensively. We are experiencing an almost complete symbiotic relationship between corporate and government collusion. Google, AT&T, and all BT companies are just a subpoena away from handing over any PII (Personally Identifiable Information) to the government. Orwell never envisioned corporations violating our privacy as they are now. His dystopian view of the world had only government savaging our privacy.

Violating our privacy in the name of the false, clay idols of targeting only serves to defy and desecrate our dignity. Even if the present targeting methodologies worked (which they are existentially flawed), they would be disqualified by any ethical or moral standard worthy of its name.

CW: What would you say are the most dramatic changes in the media industry in the past five years?

JA: The futile attempts to avoid recognizing failure has resulted in all media “doubling down” over and over. And the result has been an ever-accelerating rush to the bottom. Common sense has been abandoned. Everyone knows that if you are in a hole, one should stop digging. But media
across the board has rented power shovels to dig ever deeper. The obsessive and futile search for “one-to-one” marketing is a reflection of obscene narcissism. Media and marketers have tried to divine what makes each of us different and have utterly ignored what we share in common. In the process, we have increased choices catering to as many different tastes as possible. Media and marketers have thus sacrificed scale for idiosyncrasy. We have developed more and more targeting tools which further erode brand loyalty. Behavioral targeting is just the most recent boondoggle that will dig an ever deeper hole for media and marketers. Audience fragmentation and marketing fragmentation both operate against scale. Media and marketers are embracing each other in a death grip.

CW: But what about products that are niche by nature such as vitamin water? Isn’t behavioral targeting a way for advertisers to better pinpoint potential consumers in an efficient and affordable way? Not all products are mass.

Having a niche product does not confer some talismanic right for a viable business. I once had a client who flew out to meet me to demonstrate his product. It was a “portable toothbrush”. In fairness to him, it was encased in device that looked like a fountain pen. Having a niche product for left-handed midgets doesn’t mean that it is a viable business. You are 100% correct that not all products are mass…and yet we all need to realize that not all niche products are economically viable.

Your question about behavioral targeting assumes that it works. The reality is quite different. The fact that there are a multitude of anecdotes pointing to its effectiveness ignores the reality that it has failed miserably MANY times. BT is just the latest snake oil being sold by folks who really do not even understand its underlying assumptions. Chief amongst the misconceptions is the notion that human behavior is rational. This was the same disastrous assumption that led to the collapse of the stock market. I have written about this in much more detail and will not go into this more deeply right now.

CW: And what about mass type products that develop sub-brands like laundry detergent that begets environmentally friendly versions?

JA: Charlene, we are just emerging from the most self-indulgent time in our nation’s history. Do we really need 37 types of toothpaste? 47 types of corn flakes? The number of SKUs stocked by stores escalated dramatically over the past 20 years and only now is being rolled back. Walgreens announced a reduction of25% of their SKUs. Wal-Mart is reducing its SKUs.

Media fragmentation and product choices went hand in hand. People actually thought that having customized license plates expressed real individuality. Self-indulgent narcissism was nurtured thru more and more niche product lines. This “golden age” of choice did not create a healthy ecosystem. And as Barry Schwartz wrote in The Paradox of Choice, increased choices did not make us happier. It led to a more and more complex environment.

CW: Jaffer, if you think niche products will cut back, what is your long view of digital niche media – millions of websites and blogs etc?

JA: The long tail marketing concept was thought to help niche media sustainability…it does not. There will be cable networks going out of business by the gaggle. Millions of websites and blogs will recognize that they do not have a sustainable business model and with rare exceptions, only those that are hobbyists will continue. I personally have had a Blog for 12 years that is a collection of inspirational quotations from sages. Quotations are a complete passion of mine and not a business. This is an example of “passion over profit”. It would be self-indulgent narcissism and vanity to believe that my hobby is a sustainable business.

Millions of websites have created a business for Google and intermediate networks, but those networks cannot offer a sustainable revenue stream in most cases. This is not the least bit controversial. Just ask how many of those millions of websites and Blogs are making a thriving business from their passion. And niche cable networks by and large are collapsing in on themselves. The end of self-indulgent narcissism where 15 different types of toilet paper (to be used on our backsides!) is gladly coming to an end. Our happiness and media ecosystem should never have been tied to trying to satisfy every indulgence.

CW: Jaffer, I am almost afraid to ask – please give me three predictions for the next five years.

JA: All of the following predictions are predicated on a landscape that understands that failure will no longer be dressed up as success.

A) Consumer and media choices will be curtailed across the board. As mentioned earlier, do we need 37 different types of toothpaste? 49 different cereals? We are starting to see the trickle of less skus in Walgreens, Wal-Mart and the cereal aisle. This in turn will be followed by less media choices on DirecTV and cable. Channels catering to ever more niche audiences will go out of business because they are not sustainable… just like 49 cereals are unsustainable.

B) Behavioral targeting will be recognized for the snake oil it is. Plus, the invasiveness of its methodology will be seen as unethical and immoral.

C) Brands will return to what made them: scalable reach. They will figure a way to wrap themselves around content in all media formats and scale. This means brands will increasingly subsidize content like in the glory days of radio and television. And media will figure a way to accommodate them because that is where the money is: big reach for big brands. Concentrating on self-indulgent niches is a disease of the soul and brands will rediscover the soul of their brands by emphasizing our commonalities, not our differences.

CW: If your first prediction comes true, how do you see that impacting the media sales marketplace?

JA: A less fragmented media marketplace that recognizes its business is satisfying advertiser needs will lead to simpler solutions. Brand advertisers want scale. They need scale. Ask P&G. Ask Unilever. Ask any large brand advertiser and they all will tell you that scale is much more difficult to achieve in today’s fragmented landscape.

We agree, but believe there is no technological solution when you ask wrong questions. We cannot scale for large brands by ADDING. We will scale by SUBTRACTING. Less will be more when it comes to our media environment.

CW: If your predictions come true, do we need 1000s of television or cable networks? What will happen in that area, in your opinion?

JA: I think it is patently obvious that thousands of cable and television networks are not sustainable as businesses in a post-narcissism era. The same holds true for websites as well, but since the barrier to enter and sustain a website is much lower than for TV and Cable networks, niche tastes will be serviced by passionate hobbyists. I call this the “Passion over Profit phase.

Interview conducted by Charlene Weisler, a research veteran, member of the Set Top Box Collaborative executive committee, the CTAM Research and Research Planning Committees and a CIMM consultant. She can be reached through her blog www.WeislerMedia.blogspot.com or at WeislerMedia@yahoo.com.

When bank robber Willie Sutton was asked why he robbed banks, he reportedly replied, “because that’s where the money is.”  As online marketers we adopt a variation of Mr. Sutton’s theme each time we assume that ad dollars will follow the flocks to the Internet. Alas, only half that assumption has proved true. The flocks continue to show up — but the ad dollars don’t. That’s like showing up to rob the bank only to discover that the bank has no cash.

But digital marketers need to ask the inconvenient question: Why haven’t online ad dollars kept pace with audience growth? We know that we can reach a lot of people online, and theoretically, ad dollars should accompany that reach.  So, maybe we need to revisit our definition of reach.

Reach doesn’t just equal exposure

In August 2009, Microsoft, via the Atlas institute, issued an online advertising research report that defined reach as “…the number of people exposed to a particular ad.” Microsoft’s definition of reach describes a media universe that simply no longer exists. It describes a world where exposure alone equals reach, and where consumers are compelled to tolerate advertising because they aren’t equipped yet to avoid it.

Adding insult to injury, the same Microsoft media experts then describe reach as “…a critical metric to advertisers for planning and measuring the success of campaigns.”  In short, they start with a ridiculously outdated premise and then bet the farm on it. But they’re not the only ones — we as an online advertising community seem to be doing the same.

We all know that branding is a function of reach.  But if what we call online reach (for lack of a better term) isn’t really reaching anyone, how and where is the branding supposed to happen, and why are we using the term at all?  We need to redefine reach if we expect to brand in scale online, because the current advertising-as-intermediary model doesn’t really reach anyone and isn’t scalable. What actually is scaling is “non-reach” because our banner ads are so readily ignored.

A stab at a new definition

What if we redefine effective reach as “the number of authentic visitors delivered to a branded website?”  What if we then use our new definition of effective reach to replace the current CTR entirely (and all but eliminate the potential for massive click fraud in the process)?

But is the above definition of reach scalable?  Not under the current advertising-as-intermediary model — a blessing in disguise, since the wherewithal to scale a model that delivers a product no one wants and everyone is equipped to avoid is a sure road to ruin. Contrary to current industry myopia, the answer isn’t to provide more relevant reach prospects with more archived content. I’ll be a little self-serving here. The more consumers get access to broadband, the more they want more video.

The next question is how do you target them? The answer is simple: you don’t. All commercial media are now and always have been on-demand.  Your prospects will target you for the same reasons and in the same ways that they’ve flocked to their favorite radio and TV programs for the past eight decades: good content. Good content not only aggregates eyeballs, it attracts specific audience demos as well – all of them self-selecting.  Apparently, not only do we need to redefine reach, but we need to redefine who does the reaching as well, because it sure as hell isn’t the advertisers and marketers, and never was.  We don’t reach the audience. They reach us.

Better content creates better “reach”

We don’t need to target and hunt down an online audience that’s already more than happy to target us.  We just need better bait to capture their attention.  We need quality unbranded  bait that doesn’t put prospects off right away and doesn’t put the brand at risk in rented third-party environments full of competing brands and stealth tracking technologies.

By contrast, a single unbranded video thumbnail culled from a great classic movie clip on a website is far more compelling than any ad and far more scalable for the same reason.  Besides, we can’t scale something no one wants, and we’d have to forgive those who would call us idiots for trying.

All along we’ve tried in vain to insert the ad in the content environment when it makes far more sense for all players — advertisers, publishers and content producers alike — to insert the content directly in the ad environment on the advertiser’s branded website instead, and use unbranded video thumbnails across the networks to deliver self-selecting audiences to the branded destination sites.

Don’t reach out to them, let them “reach” you

In other words, don’t post your ads on publisher sites; consumers clearly don’t want them.  Find a way instead to bring self-qualified consumers to your own brand message on your own website where you control the brand environment.  The best place for brands to assert and maintain true relevance is on their own sites in their own environments.

This means a simple, yet radical departure for media and advertising brands. It means havingSports Illustrated articles read on Adidas or Nike sites. It means having The New York Times’ Paul Krugman read on Chase.com. It means having viewers of Walter Payton video clips delivered to a Just For Men microsite.

“Reach” re-defined as the audience delivered to consume chosen content on an advertiser’s website portends a more meaningful metric whereby brand advertisers own the eyeballs instead of just renting them – exactly as it was back in the golden years of radio and TV.  It’s all about engaging the audience on its own terms, and history has shown that once you capture their hearts and minds, their wallets will follow.

Jaffer Ali is the CEO of Vidsense, the Web’s only safe, scalable branding network.

Much has been written over the years about the unique qualities of the Internet, most of it by those of us who seek to sell Internet marketing and advertising services.  Self interests aside, what really distinguishes the Internet from other media is interactivity and the behavioral requirement to lean into the medium as we use it, a behavior much more akin to reading than to watching TV, a lean-back medium if ever there was one.

Of course the lean-in nature of the Internet has been challenged in recent years by the penetration of high-speed bandwidth – which is all about TV.  What was once an exclusively lean-in medium is now looking more and more like a lean-back medium with each passing day.  In effect, TV is changing the Internet far more profoundly than the Internet could ever change TV.  The problem for online advertisers, publishers and content producers alike is that the Internet compels us to lean in when all we really want is an excuse to lean back.

To complicate things further, not only do we want tuna that tastes good, we want it fast, right now!  Turns out, however, that our massive investment in a seamless user interface — designed to move you and me at warp speeds from one virtual place to another — is completely at odds with the most fundamental functions of good brand advertising to intervene and interrupt.  Turns out that after years of plummeting CTRs and CPMs the traditional lean-in model of targeted online advertising — including search — is utterly unscalable.

Think about it: we begin with advertising, a product no one wants (except those who produce, buy, sell and measure it) and everyone is equipped to avoid.  Then we take this product that no one wants and everyone is equipped to avoid and we make it available by design to smaller and smaller audiences across a medium that simply can’t and won’t tolerate it in the first place.  Then we double down when it doesn’t work.  Albert Einstein would call it insanity, but Lewis Carroll would be proud.

Again, our current obsession with targeting the audience is utterly unscalable and completely at odds with any attempt to sell the Internet as a branding medium — because branding is a function of reach.  Too bad we long ago sacrificed the ability to reach the audience for the ability to target the audience.  In retrospect, it was a lousy deal, cut way back in the mid-1990s by young MBA-driven technologists who knew nothing about advertising and marketing, but needed something to sell en masse and a catchy copy point or two to help them sell it.

As a result, our effective audiences continue to shrink with each new layer of targeting technology, even as the total online audience grows in leaps and bounds.  Clearly, just because we can target a niche audience doesn’t mean we’ll reach the individuals in it, especially not when none of them want to be reached.  Meanwhile, our costs to reach niche audiences go way up while our effective ability to reach them goes way down.  We’ve now devolved to the point where the consumers we actually reach in any given niche audience are likely fewer than the number of self-professed marketing professionals trying to target them — pretty much what Lewis Carroll had in mind when he sent Alice through the looking glass to a world where up is down and down is up.

Years ago I coined a phrase to define the phenomenon of paying more to get less; I called it DROI, Diminished Return on Investment.  The only way to give the DROI of online advertising the illusion of respectability is to continually lower expectations, and the only way to continually lower expectations is to continually lower the performance bar and redefine the metrics accordingly.  Stated otherwise, in order to discuss online ROI with a straight face we must first persuade ourselves and advertisers (with defensible research, of course) that paying more to reach fewer prospects is somehow a good thing.

Mission accomplished!  Unfortunately, the search for ad relevance in a lean-in medium is nothing less than a search for the Great White Whale.  First in the media food chain to take harpoons in the back are hapless publishers; it’s not for nothing that so many venerable, brand-name franchises now teeter on the brink of insolvency, despite more traffic than ever before.  Indeed, the more niche-targeted inventory they sell, the faster most of them go out of business.  McLuhan got it right when he suggested that any medium pushed to extreme will begin to operate in reverse.

The secret to branding success in a lean-in medium isn’t to find new ways to make advertising more relevant, because it’s not now and never has been.  Not in the least.  The secret to branding success in a lean-in medium is to offer more frequent excuses to lean back — because that’s exactly what everyone wants, not only at the end of the day but throughout the entire day, every day.  Giving your prospects what they really want — an excuse to lean back — is truly scalable and promotes branding as a function of reach.  So don’t hunt, fish.  Don’t equip yourself with better ammo, look for better bait.  Don’t push, pull.  In an on-demand universe (and all commercial media are always on-demand) the only truly scalable model is one that caters to and exploits our constant need and desire to lean back.

I’d like to finish up by saying that getting people to lean back in a lean-in medium is a lot harder than it sounds – but it’s not.  In fact, it’s abysmally simple.  What’s hard is slowing down long enough to reduce the volume between our own ears.  What’s hard is letting go of failure to make room for meaningful change.  What’s hard is putting yourself and your company on the path to deliberate simplicity.  What’s hard is the journey back up the rabbit hole and back through the looking glass.

Pete – I took the opportunity recently to interview digital industry pioneer Jeff Einstein, co-founder of the first interactive agency way back in 1984, and now a partner with the Brothers Einstein, an extremely contrarian brand strategy boutique.  The interview was conducted via email over the past couple of months, then edited down at my end.  While many of the emails back and forth between us were notable in and of themselves, what I discovered in my hands after reading the finished product for the first time was nothing less than an alternative digital manifesto that — I believe — stands utterly alone in its devotion to historical perspective and common sense.

In it he describes among other things the myth of media performance, metrics as deck chairs on a sinking ship, letting the audience target us, digital bubbles and collapse as the price of unchecked acceleration, how to fashion wisdom from knowledge, social media as the success of social and the failure of media, the efficacy of bait over ammo, the wisdom of fishing versus hunting, innovation as a process of subtraction and disintermediation, and – remedially – the need to grow up, slow down, let go of failure, and embark on what he calls a process of deliberate simplification.

First, a little background information about Mr. Einstein: Over the years, his strategic marketing and business development initiatives have driven the acquisition of two agencies, the global growth of a third, and a high-tech IPO, and have appeared in virtually every major business venue, including two front-page stories in The Wall Street Journal, and cover stories for Red Herring Magazine, George, PC Magazine, and The New York Times Sunday Magazine.

He has appeared as a featured speaker at more than 200 media and marketing industry tradeshows, seminars and workshops, and as a media industry expert on dozens of radio and TV programs, including The Today Show with Katie Couric, CNN’s 360 with Anderson Cooper, and CNN’s Moneyline with Lou Dobbs.

In more recent years, however, Mr. Einstein has re-emerged as a fierce media critic whose writing takes no prisoners and suffers few fools.  He currently asserts that those of us in the marketing and advertising industries have passed through the looking glass and plunged down the rabbit hole, where we now spend most of our time drinking our own Kool Aid and plotting new ways to sell ads that no one wants to see and everyone is equipped to avoid.

So in renewed hopes for a New Year, and in the spirit of positive change we can truly believe in, I present my interview with Jeff Einstein…

Pete – Welcome, Jeff.  What evidence can you cite to support your assertion that we’ve passed through the looking glass and plunged down the rabbit hole?

Jeff – We can begin with a litany of online performance indicators, including the prevalence of sub-$1 CPMs, clickthrough rates firmly ensconced at statistical zero, click fraud estimates of anywhere from 25-85% (depending on your choice of networks and industry experts), not to mention the insolvency and failure of thousands of media franchises, many of them brand names with long, distinguished track records.  In more sober environments with more sober leadership such massive failure and systemic collapse might give us pause, but as an industry we’ve responded instead by speeding up, doubling down and plunging ourselves even deeper down the rabbit hole in Lewis Carroll’s vision of madness, a world where up is down and down is up.  If anything, we’ve accelerated our commitments to the very same insanity that got us here in the first place.

Pete – That’s pretty harsh.  Aren’t many of our problems right now simple byproducts of a deep recession?

Jeff – No, absolutely not.  While the recession certainly hurts like crazy, our problems don’t result from the recession as much as the recession results from our problems.  Performance across all channels has actually been in decline for a couple of decades now, regardless of the economy and in spite of explosive industry growth.

Pete – Then why do you think media performance is so anemic these days?

Jeff – Mostly because media performance is a myth to begin with.  We’re chasing a great white whale.  Media aren’t supposed to perform.  The message should perform, not the media.  The onus to perform should weigh on the advertisers and the agencies, not on the media franchises; their only job is to aggregate and somehow entertain or inform an audience, the same now as it was fifty years ago.

Only with the digitally-driven ascent of discrete media agencies as the crown jewels of global media holding companies did we suddenly discover an excuse to divorce the medium from the message and shift the onus of performance from the message to the medium in the process.  But in truth, the media simply can’t perform because they were never designed to.  And that’s why, despite all the lip service, advertisers and agencies don’t buy performance.  They buy ubiquity, the exact opposite.  Rather than assume responsibility for their own lack of performance, advertisers and agencies would rather hedge their bets and buy more and more of something that’s worth less and less with each passing day.  Big advertisers and big agencies talk performance, but they buy ubiquity because they know the media can’t perform.

Pete – Lots of industry folks are calling for a complete online marketing overhaul, including new metrics, more sophisticated targeting technologies, more research, more data-based marketing, and more social media.  What do you think?

Jeff – I think new metrics are just another way to shoot the messenger, another way to rearrange the deck chairs on a sinking ship.  Besides, in marketing applications metrics never really describe what works as much as they describe what can be sold.  We already know that the continued growth of online ad budgets will rely increasingly on our ability to sell more branding, in no small part because we’ve invested so heavily in ad serving technologies and infrastructure over the past 15 years.  The perceived need to sell more branding explains why the new metrics being proposed now all seek to measure the very things the industry arrogantly dismissed as useless and effete back in the mid-1990s, all the intangibles that drove the growth of great branding media like print, radio and TV for decades.  We cut off our noses to spite our faces 15 years ago in a foolish and immature effort to distinguish digital media from their analog counterparts, and now the bed we’ve made for ourselves is wrecking everyone’s sleep, our own not least.

Pete – What about behavioral targeting?

Jeff – Anyone with any historical perspective will rightfully conclude that each additional layer of targeting technology increases costs and reduces performance.  As a result, each additional layer of targeting technology further burdens publishers and networks alike.  The promise of digital scale starts working against them; the more traffic they attract and the more advertising they sell, the faster they go out of business.  McLuhan had it right: any medium pushed to extreme will begin to operate in reverse.

Sophisticated targeting technologies don’t work because commercial media are now and always have been on-demand, and in an on-demand media universe it simply makes far less sense to target the audience and far more sense to let the audience target us instead – exactly why search works so much better than display advertising.  This much we know with absolute certainty: no one demands more advertising, relevant or otherwise, and everyone is equipped to avoid it.  That’s the primary reason why online advertising fails at least 99.9 percent of the time, and why TV and radio executives are having nervous breakdowns.

Pete – Should I assume from your aversion to behavioral targeting that you’re also no fan of data-based marketing?

Jeff – Yes, that’s a pretty safe assumption.  Data-based marketing is the end of the road, where we wind up only after we conclude that the message is worth less than the medium, and only after we conclude subsequently that the medium is worth less than the data it generates.  Anything that can’t be measured, quantified and reduced to a mathematical algorithm is excluded by definition — which means we can only measure the smallest, least significant things, and only the things that don’t work.

Unfortunately, however, advertising and branding only work because of the very things that most resist measurement and quantification, those intangibles that can’t be reduced to convenient formulae.  Quite apart from the fact that no one wants more advertising to begin with, the advertising-as-intermediary model can’t possibly perform in the age of behavioral targeting and data-based marketing because advertising performance is all about the message, and marketing nowadays is all about the media and the data.  The good news is that we’ve finally lived up to Oscar Wilde’s brilliant definition of a cynic as someone who knows the price of everything and the value of nothing.

Pete – Do you hold out any hope for social media as a marketing or advertising option?

Jeff – Certainly not as a savior, or even as an antidote for prior stupidity.  We need to understand that social media really represent the end state of our trillion-dollar investment in a seamless user interface designed to eliminate friction and move people from one virtual place to another as quickly as possible.  As such, social media represent the logical extension of an on-demand universe; it’s where we wind up when we’re constantly en route to me, myself and I.  Unfortunately, that same seamless user interface is at complete odds with the basic nature of advertising, which seeks first and foremost to interrupt and intrude on our narcissistic cocoons with someone else’s message.  The seamless user interface we’ve built at huge expense simply can’t and won’t tolerate the legacy advertising-as-intermediary model we imported to support it back in the mid-90s, especially not in social media.  That’s why advertising and branding will shift over the next several years from their current status as intermediaries to a far more functional and appropriate status as destinations.

The more operative component of social media for marketers and advertisers is social, not media.  Consumers who use social media couldn’t care less about its potential value to marketers and advertisers.  They see it exclusively as a social tool, not a distribution medium.  Those marketers and advertisers who see social media first for what they really are, sophisticated tools to expedite social exchange and sharing, will understand immediately why a $.05 Facebook CPM is way overpriced, and fare far better than those who see social media as just the latest in a long litany of cheap media opportunities.  The secret to success with social media, as with all media, is to understand first what they don’t do well.  As always, the examination of failure is prerequisite to success.  Fortunately, there’s no dearth of failure to examine.  Unfortunately, no one’s looking.

Pete – So if everything we do simply compounds the problem and drives us deeper into the rabbit hole, what’s the solution?

Jeff – We need to do three things: First, we need to slow down.  Next, we need to let go, and finally, we need to begin a process of deliberate simplification.

Pete – Let go of what?

Jeff – Bless you for jumping the queue, Pete.  But let’s talk first about slowing down, because we can’t possibly hope to institute meaningful change unless and until we first turn down the noise between our own ears.  We need to clear room in our hearts and minds for a better world before we can hope to create a better world, and we can’t possibly find wisdom in the harsh events of the digital era unless and until we first turn down the volume in our own heads.  Failure to do so will only guarantee bigger bubbles and bigger collapses than the three trillion-dollar market crashes we’ve already endured in the past decade alone, not to mention the current collapse of the media and healthcare industries.

Pete – Okay, what wisdom will we find once we slow down and reduce the volume between our ears?

Jeff – We’ll find that the core imperative of all technology is to accelerate itself and everything around it, and that our primary responsibility in relationship to our own technology is to moderate and restrain it at all times, something we’ve utterly failed to do, or even try.  We’ll find that we’ve become – in the words of Henry Thoreau – tools of our tools, that we work and live our lives at speeds determined not by our own conscious deliberation and common sense, but by the digital tools at our disposal.  The default condition of life in the digital era is perpetual acceleration.

Pete – So what do you suggest?

Jeff – Again, we need to slow down, let go of what doesn’t work and initiate a process of deliberate simplification.  We need to institutionalize ways to become more deliberate as an antidote to the toxic effects of the tool-driven acceleration that we know for certain rides shotgun with our digital technology.  We need to slow down frequently and long enough to interject historical perspective into our deliberations, otherwise we have no way to fashion wisdom from knowledge, and no way to identify or put common sense back to work.

Pete – Everyone I know wants to speed up and do more in less time.

Jeff – That’s the technology talking, Pete.  That’s only what we think we need to do in order to reach our real objective.

Pete – Which is?

Jeff – A far simpler, less cluttered life.  Ultimately, what we really want is a rocking chair on a country porch or a hammock on the beach.  What we really want is a safe place to let go.  Our objectives, however, are very much at odds with our means, and very much at odds with the tool-driven perception that we need to do more in less time.  Only in the rabbit hole on the far side of the looking glass can we expect to live simpler, less cluttered lives by speeding up and adding more clutter.

Pete – What are we letting go of?

Jeff – We’re letting go of failure, and the false pride that compels us to hold onto it.  We can’t possibly innovate in any meaningful way unless and until we make room for innovation in our own hearts and minds, and the only way to create enough breathing room for new ideas is to slow down long enough to identify and let go of the old ones we know no longer work, despite our vested interests.  We don’t find innovation as much as it finds us – but only if and when we remove the barriers.  Innovation is a process of subtraction and disintermediation.

Pete – Can you give me a failed idea in the advertising and marketing industries that we should let go of right away?

Jeff – Yup.  Advertisers, agencies, content producers and publishers need to let go of the traditional advertising-as-intermediary model, especially online.  Again, it offers a product no one wants and everyone is equipped to avoid, and the technological and administrative costs to support it are far too cumbersome and onerous for publishers and content producers to sustain.  As I mentioned earlier, the current collapse of the media ecosystem isn’t just a byproduct of a deep recession.  Industry bubbles inflate and burst when the aggregate weight and cost of excess intermediation eclipse and crush the value of the product or service being sold – exactly what happened with the dot com, financial and real estate bubbles.  And that’s exactly what’s happening right now with the media and healthcare industries.  They’re collapsing from the aggregate weight of all the intermediaries who contribute far too little and extract far too much.

Pete – Who would you identify as the primary intermediaries in the media industry?

Jeff – The media agencies, the ad networks, the targeting technology vendors, and the data-marketing vendors.  They’re all in the business of adding costs and complexity to the failing advertising-as-intermediary model whose performance can only continue to decline no matter what.  In the end, none of what they bring to the table can improve performance of a product no one wants, and their collective weight can only further imperil the livelihoods of those who truly belong at the table, the content producers and the publishers.

Pete – Better technology can’t help?

Jeff – Better technology can help a lot of things, but the advertising-as-intermediary model isn’t one of them.  Remember, technology is supposed to simplify our lives.  But the twenty-something technologists who took over the marketing and advertising industries straight out of business school in the mid-1990s simply weren’t mature enough to understand that the secret to success with all technologies is deliberate restraint, the wisdom to know when and where not to use them.  So they went on a collective bender instead and introduced layer after layer of increasingly complex digital technologies, none of which increased the intrinsic value of the work product, and all of which imposed untenable burdens and costs on the ecosystem.

Pete – That was then.  What about now?

Jeff – Now we’re old enough to know better.  Now we know what doesn’t work.  Now it’s time to put aside childish things and grow up.  Now it’s time for us as an industry to slow down, let go of what doesn’t work, and begin the process of deliberate simplification.

Pete – Where do we begin?

Jeff – We begin with a more mature understanding that the ability to defer gratification and exercise restraint is what distinguishes mature behavior from adolescent behavior.  So we begin with the re-introduction of restraint.  We begin by reaffirming that our primary responsibility as senior executives is to teach, institutionalize and practice restraint and moderation up and down the entire food chain.  Job one of all senior executives is to reject the excesses of the past two decades and say no to patently self-destructive and promiscuous behavior, especially when we know it’s powered by several billion microchips.

Pete – Beyond the acts of slowing down and letting go of things that don’t work, what does the process of deliberate simplification look like?

Jeff – Think of yourself and your business on the slick surface of a spinning wheel.  In order to stay in business you must remain on the wheel, despite the fact that it accelerates faster and faster with each and every rotation.  We know from Albert Einstein’s casual observation of a phonograph record that the outer edge of the wheel spins much faster than the hub, which means the centrifugal force you feel on the outer edge of the spinning wheel is far more intense than the centrifugal force you feel at the center.  Think now of the centrifugal force you feel on the spinning wheel as all the day-to-day pressures, inertia and exigencies that conspire in aggregate to steal your resources and sap your strength.

The success and sustainability of your business depends therefore on where you spend your time on the spinning wheel.  The closer you are to the outer edge, the greater the centrifugal force that pushes you towards oblivion.  The closer you are to the outer edge, the more time and energy you must invest in your battle simply to stay on the wheel.  The closer you are to the outer edge, the more time and energy you invest in pure reaction to your environment.  I would submit that tens of thousands of businesses and hundreds of thousands of senior executives are living wholly reactive lives perched precariously on the edge at this very moment.

The process of deliberate simplification is one that describes a proactive journey from the insanity and fragmentation of perpetual life on the edge to the sanity and wholeness of life in the center.  The process of deliberate simplification — like innovation — is in fact a deliberate process of subtraction and disintermediation, and it’s the only way to emerge from the rabbit hole with our sanity and wallets intact.

Pete – What specifically can we do to begin the journey from the outer edge to the center?  For instance, if you were an advertiser, what steps would you take to introduce a process of deliberate simplification online?

Jeff – Over time I’d cease to use third-party websites to advertise my brand message.  Instead I’d replace the intermediary ads with more compelling unbranded content teasers designed only to entice and move prospects directly to my branded sites.  I’d use bait instead of ammo and go fishing instead of hunting.  The content bait I place on third-party websites would always resolve on my websites, surrounded entirely by my brand with my calls to action.  I’d no longer ask the publishers to do something they’re clearly not equipped to do, I wouldn’t ask prospects to look at or click on something they clearly don’t want, and I’d always know precisely where and on what terms my brand message is being consumed.

Pete – Doesn’t that put advertisers in the content business?

Jeff – Of course.  But lots of advertisers are already in the content business, some quite successfully since the 1930s.  Those who can’t afford or aren’t inclined to create their own content can license someone else’s.  Content producers and publishers get paid on a pure and simple performance basis for traffic and content they deliver directly to my websites, and we eliminate most if not all the front-end targeting technologies that are currently driving them out of business, putting my brand at risk and wrecking my ROI.  The onus for performance shifts back to me where it belongs, and I put my digital agency back to work doing what they should have been doing all along, creating quality destination environments for my brand instead of trying to decide which websites will fail least often.  I’d stop paying them to fail.

Pete – So you’d just replace the ads with content teasers?

Jeff – Yes, and put all the branding on my own destination sites.  It’s the only cost-efficient and scalable way for me to control my own brand exposure and eliminate risk, and it’s the only way not to drive quality publishers and content producers straight to the poor house in the process.  Instead of the current site-targeting insanity that presumes to know which ads my prospects won’t avoid, I can now entice them with something they truly want to consume.  Instead of paying for what I know will fail at least 99.9% of the time, I’ll pay only for success, and I won’t be forcing publishers or content producers to foot the bill for my failures anymore.

Pete – Do you think publishers and content producers will play along?

Jeff – Publishers and content producers don’t set policy.  Ultimately, only the advertiser — the guy with the cash in hand — sets policy.  That aside, publishers and content producers need to slow down, let go, and embark on a process of deliberate simplification also.  Publishers need to let go of the performance myth imposed upon them by advertisers and feckless agencies.  In fact, they not only need to let go of their traffic, but they need to let go of their content as well.

Pete – How do you mean?

Jeff – Publishers need to send their content and their traffic directly to paying advertiser sites, rather than trying to hold on to both.  They simply can’t deliver brand messages in an age when no one wants to see them and everyone is equipped to avoid them, and — as a result — they can’t afford to keep quality content on-site any longer.  The advertising-as-intermediary revenue model can no longer support the requisite costs to aggregate and target audiences.

Pete – What do you suggest?

Jeff – I suggest they retain the dot com model to aggregate eyeballs, but function as gatekeepers rather than curators.  Publishers should take the same content that attracts advertisers now to their sites, put it directly on a paying advertiser’s website, link to it then get paid for both the traffic and the content on a CPC basis.  Much simpler, much more direct, and much less expensive than trying to figure out year after year how to compel visitors to view ads they simply don’t want to see.  Publishers get to do exactly what they’ve always done so well: create great content and aggregate audiences.  And they get to do it with none of the invasive targeting technologies that can only add costs, erode performance, and piss people off the moment they accidently learn about them.

Pete – So you don’t think the new IAB campaign to educate consumers on the benefits of behavioral targeting will work?

Jeff – Hardly.  I think it’s like conducting tours of a sausage factory, but without the tasting room at the end.  The IAB is trying to convince folks that what they don’t see behind the ads won’t hurt them, when in fact no one but the IAB and other industry intermediaries wants the ads in the first place.  The Mad Hatter would be proud.  But again, deliberate simplification is a journey of deliberate subtraction and disintermediation.  We need to remove the layers of technology-driven intermediation that currently stand between visitors and brands.  We need to remove the intermediaries that drive publishers and content producers out of business.  In short, we need to invert the current model: instead of taking the ad and immersing it in the content on the publisher’s site, publishers should immerse both the content and the visitor in the ad directly on the advertiser’s site.  It’s the only ad model that plays in scale to the distributed network strength of the medium, the only one that will deliver the branding advertisers want without the risk and waste, and the only one that will protect the interests of publishers and content producers as well.

Pete – Any final calls to action?

Jeff – Just one: anyone who’s slowed down long enough to read this entire interview is likely ready to emerge from the rabbit hole, and should drop me a line…

Pete – Thanks, Jeff.

Jeff – Thank you, Pete, and Happy New Year.

Phase III language is the language of motivation and selling. It should be where the Phase I language of intimacy and the Phase II language of learning come together. But the marketing and advertising industries are currently truncated, mired in the growing inertia of Phase II.

Our reliance on and fealty to our own communications technologies prevent us from expending the requisite effort to synthesize our language, and come at the further expense of the already orphaned creative culture. We’re far too consumed with the minutiae of getting there to imagine where we’re going in the first place. What we say now takes a backseat to how quickly and frequently we can say it.

The inertia that surrounds our industry is very much a byproduct of our obsession with it. Inertia surrounds and shields our addictions like a protective carapace, and is why obsessive compulsive behavior patterns are so tough to bust. The digital age mantra of faster smarter better simply becomes a faster smarter better rationale for the same old same old.

The most self-consumed industry of all nowadays, the one most immersed in its own inertia, is the media industry. The folks perhaps least capable of recovery, perhaps least capable of evolving Phase III language, are the selfsame folks who need it most: the scions of advertising and marketing.

Advertisers beware. Be careful what you ask for. Your manic quest for ever-faster, ever-smarter, ever-better will generate little more than less, little more than DROI – diminished return on investment. Your agencies are rapidly losing their ability to fashion Phase III language, the language that defines your brand. They can only deliver a diminished brand message. In the end, faster smarter better is neither smarter nor better. Only faster.

Of course, faster smarter better wouldn’t be so bad were it not for the fact that consumers are also faster, smarter, and better at avoiding advertising. It’s quite possible that P&G now delivers 2 billion daily ad impressions because consumers have discovered how to avoid, block, or skip past the first 1,999,999,999.

But if advertisers want someone — anyone — to stick around for the delivery of their ads, they might want to insist upon and institutionalize the only compelling component of good advertising: good creative. That initiative can only come from the client side now that almost all of the rogue creative cultures driven by rogue creative people are gone, devoured whole by the major media holding groups. The agency community at large is far too reactive to help itself, far too addicted to its own Kool Aid to emerge with any measure of sobriety without some sort of massive intervention.

No such Phase III initiative can occur, however, unless and until clients make room for it between their own ears. The agencies will follow, as always.

What do you think?

As mentioned in last week’s column, Phase II language is the language of learning, of gathering information about others and the world around us. Expressed creativity usually takes a break (or gets squeezed out) during Phase II.

Believe it or not, up until Bill Bernbach introduced the world at large to a small bug of an automobile in the 1960s, advertising was considered an essentially quantifiable craft, even if it was quantifiable — at least according to John Wanamaker — only 50 percent of the time. Bernbach’s influence not only sparked a creative revolution, but also precipitated a concomitant decline in agency resources devoted to research. The emergence of TV as the dominant medium over print likely had a lot to do with the ascent of creative as the dominant new agency service, and just as likely a lot to do with the ubiquitous 15 percent agency commission fee that all but guaranteed exorbitant agency profits.

Fade out and fade in: We now have the exact opposite situation in the transition from demographics to psychographics as the dominant lingua franca in a widely fragmented and all but commission-free media landscape. The rapid-growth agencies of the late 1990s and early 21st century are those attuned more or less exclusively to media rather than creative, and driven largely by the Wall Street culture embodied in the primary Wall Street tool – the electronic spreadsheet.

Now it may well be that our current obsession with Phase II language — with gathering and assessing obscene amounts of information — may well reflect the simple fact that we now have the sudden technological ability to gather and assess obscene amounts of data. It’s possible that we just haven’t come to grips with our own technology-driven power yet, given the basic imperative of technology to accelerate itself and everything around it. However, it’s also possible that we never will.

So despite an occasional burst of creative talent here and there, we are still very much ensconced in Phase II language with diminishing hope of emerging from our self-imposed creative exile as time marches on. The longer we linger in the addiction-induced inertia of Phase II language, the stronger that inertia becomes and the less likely we are to find a way out, to recover our sense of balance and priorities en route. The obsessive-compulsive hunt for better ways to deliver the message will eventually leave us with nothing to say.

This is not to vilify the media mavens in our midst. This is merely my assertion that our obsessions with our own media technologies (to the near exclusion of quality creative) all but guarantee diminished return on investment (DROI). Simply stated: Advertising performance will continue to decline as bandwidth and subsequent media tonnage increase.

Our industry response thus far to the phenomenon of DROI has been entirely predictable, as are all obsessive-compulsive and addictive behaviors: more of the same — faster, smarter, better.

But the only real offset to the increased bandwidth-to-DROI equation is a re-emergence of quality creative and its eventual integration with technology-driven research, the subject of next week’s column about Phase III language: synthesis.