technology industry has implications far beyond technology, or even business, going right to the
heart of society and the way we function. And so I add my voice to the growing chorus of people
who have observed this phenomenon and spoken or written about it.
The change of which I speak is the shift of advertising messaging from broadcast to narrowcast,
the move in marketing from carpet bombing to surgical strike. This transformation is so
fundamental that it is affecting the balance of power throughout the economy. Industries,
companies, and jobs particularly affected include software makers, portals, advertising firms,
the advertisers themselves, television and radio broadcasters, publishers, editors, writers,
journalists, and analysts, to name only a few.
The essential nature of the change is that, with the Web, marketing messages can now be sent
directly to those most likely to respond to them. This audience is far smaller than that originally
covered by broadcast media, but such targeting is far more effective. This one fact is most
responsible for the rise of Google, which gets credit for having seen this movement early on and
for exploiting it most adroitly. Google made the shift the fastest and hardest and is likely to
benefit the most from the change, but others are well positioned also, particularly established
portals such as Yahoo, Amazon, eBay, MSN, and AOL, to list the most obvious. Others will
benefit, too. For example, hotels.com, coldwellbanker.com, and other specialty portals.
The dynamic works like this: intelligent software monitors what users are doing on the Web and
presents them with free and commercially sponsored information as well as links to
commercial sites that have a high likelihood of matching up with their interests. For example,
when viewing an article about Dell's fortunes at NYT.com, the Website of the New York Times,
an advertisement for Gateway might pop up before the text of the article. Of course, the reader
can click this potential nuisance away and get right down to reading the article, but there is an off
chance that a reader of an article about computers might want to acquire one. The key is that
this chance, remote though it may seem, is far better than the chance that any random viewer of
a broadcast television program will be similarly interested.
Television delivers to advertisers far more eyeballs than NYT.com, but the messaging at a portal
can be much more tightly targeted at the reader of a particular article than can be a TV ad aimed
at just any viewer. And, importantly, the cost of reaching a nearly random national audience is
much greater than reaching 150,000 people with a much higher probability to buy via the Web.
The economics get even better when the targeting is tightened down. Amazon practices this
type of marketing, running a continually shifting mix of offered reading matter in front of those
who browse and buy at their site. If you bought Annie Proulx's "Shipping News" last week and
show up again, the site might offer you her "Wyoming Stories" and maybe "Captains
Courageous" by Rudyard Kipling as well. The thinking is: you liked that; perhaps you'll like this,
too. Even tighter would be, when you're browsing properties in a particular town on Coldwell
Banker's real estate site, to have ads from mortgage lenders, realtors, and home improvement
firms pop up beside the listings you're browsing. At this point, the probability that you will click
on one of these local services links is getting pretty high. At any given moment, only a few
people will be on that particular Web page, but their focus will be narrow and interest distinctive.
Portals like Google, Yahoo, and Amazon are intensely alert to the implications of this
development and are in the best position to benefit from it. Improving search engines, using
various sorts of logic to map the behavior of browsing people to likely offers, packaging
information in useful ways to lead people through a series of clicks beneficial to advertisers,
designing and laying out user interfaces to maximize comprehension, organizing databases
and their associated applications for rapid and logical information presentation, all these
technologies and related human engineering are the tools of the likely winners of the next round.
Not so wonderful is the probable outcome for the broadcasters: television, radio, and print.
These media continue to try to maintain their traditional circulation and advertising base even as
they explore the Web and try to update their product for the new era. The problem is that their
DNA is fundamentally of the wrong sort. It's not enough to put your front page into HTML or to
stream your video programming from your site. Consumers of information and entertainment
are taking control of when and how they consume, and their behaviors vary depending on their
interest. The broadcast audience is breaking up. No longer will 20 million people sit in front of
the tube at 7:30 p.m. on a Friday night to watch a show. People want to watch at different times,
and they want to watch different things: some people wish to see the whole show, but others
have time only for the highlights. More importantly, their behavior tells you something. There's
information to be gathered and acted upon as consumers browse. A static Web page that does
nothing but provide content is fast becoming a thing of yesteryear.
Then there's that group in the middle, the content providers, the journalists, analysts,
comedians, actors, authors, advertising copy writers, and advertisers, to name some of the
categories. For this group, winning and losing will depend on how and whether they adapt. The
old periodical model is nearly dead, and the academic model even more so. To take five years
to write and book and then put it out through an academic publisher is close to suicide. A few
thousand copies are printed, and they sit on a shelf gathering dust. Time to market is too long.
The subject has changed. The thought that stimulated the idea for the book faded from view
long ago. Information has to be condensed and modularized. Printing should progress toward
an on demand model. The content that fits best in this brave new world is made up of sound
bites, blogs, instant messages, and snippets, elements formed rapidly and often and
transmitted quickly to interested audiences. These elements can then be juxtaposed with
others, including commercial information such as advertising. Information is becoming
atomized, and free is being paired with commercial.
Clearly, it's already happening. Google is likely have more ad revenue than any single publisher
this year, and this trend will only increase. More and more, people get their news online. They
consume entertainment online or download content to local devices for consumption at leisure.
They socialize online. They gather information online, and perhaps most importantly, they buy
online.
Advertising will shift wholesale from traditional broadcast to the Internet, a much more effective
— and cost effective — medium for putting messages together with people likely to respond to
them. Advertisers need to learn to shape their messages for this forum, figuring out how to
judge the product copy writers offer them for its potential in this environment. Writers, authors,
analysts, and others who produce content need to learn how to make it modular, turn it out
quickly, and place it where it will gather the best — not necessarily the largest — audience.
