Battelle on Ad Networks

John Battelle writes the lengthy (1,500 word blog entry!) first part of what looks to be a two-parter on the obsession around Ad Networks, the competitiveness of Google vs. AOL, Yahoo, MSN in the space, and what will actually make happy brand marketers in the future.

We'll have to wait for part 2 to see just how insightful the whole is, but the first one is certainly a good read...

Clearly, brands have built what I've called "packaged goods media." And in the past few years, I've come to the same conclusion about online media. In short, I think brands will also build the next batch of great online media companies. And up until recently, I thought Yahoo, AOL, and MSN were best positioned to be those companies. Now, I'm not so sure.

Expanding choices outpacing our ability to choose?

Ahhh, online media: rushing headlong into hyper-segmentation.

As a technology-driven business this is not surprising, since it simplify follows the "if it can be done, it will be done" axiom of technology.

Which leads to the following (partial, and ever-expanding) list of choices:

Supplier	Knowledge	Ad Type
Google, et. al. Paid Search	What I'm looking for	Text Display
DoubleClick, et. al. Ad Networks	What I'm interested in	Display
Federated Media, et. al. Blog Networks	What I'm interested in	"Conversations"
Hulu	What I watch (TV/film)	Interstitial
YouTube	What I watch (amateur)	In-video overlay
LinkedIn	Who I am and know (professionally)	Display
Facebook	Who I am and know, and what I do (personally)	In-newsfeed

Of course, what you buy still largely depends on marketing objective, but do we really know enough about how our current spend is doing to to move our pile of chips forward to the next thing?

Wrong question. As long as offerings are advancing, the competition is taking a look at what to do with those offerings.

Market segment share (or, in this case "share of voice") is won and lost in transitions. Welcome to the digital marketing treadmill...

Shifting from "product, then marketing" to ...

…“product is marketing”.

[Ed. note: In this post I’ll use “product” to represent “product or service”].

With Forrester Research Social Media analyst Jeremiah Owyang hosting a lively discussion (37 comments and counting) on “A Definition of Marketing”, it seems apropos to dive into what has been happening with marketing.

The majority of marketing simply follows mediocre product definition and/or development.

In some cases we get good products followed by good marketing.

But, with the Internet to provide zero barrier-to-trial access to your product, or at least to discovery and discussion of your product, we’re seeing cases where the product is almost entirely also the marketing.

Here are some who have done no, or very little, traditional marketing/advertising (thus, no Apple on this list, as they spent $383.7M in the US alone in 2006*...see a discussion of their defiance of conventional marketing wisdom in this earlier post):

• Google: Even their unsuccessful products are marketing.
• Facebook: Helped by news of MS investment, but huge prior.
• digg: And other Web 2.0 winners like del.icio.us, Flickr, etc.
• Wii: Spectacular zig while MS/Sony duke it out on the zag.
• Virgin America: Lots of early access to bloggers.
• Tesla Roadster: What Zero Motorcycle could have been.
• Asus Eee PC: Inexpensive, small notebook gets big attention.
• Slingbox: Right time. Right niche. Right product.

These are all products worth talking about. "Remarkable" in the purest sense of the word. Seth Godin's fundamental premise in Purple Cow. Or, provocatively put another way on Jeremiah's blog by Thomas Marban (creator of popurls, among other things): "marketing is a compensative [sic] process for not being remarkable."

Disconnection between marketing and product definition has never been less tolerable.

So, if this is how marketing has evolved, what lies ahead?

The natural step in having marketing make its way deeper and deeper into the early part of the product cycle, is for it to go all the way to the beginning. When Social Media evolves to becoming Social Product, end users actually build your product with you, and by that I mean much more than etching their name on it, or deciding whether it's white, black or silver.

From conversation comes product. A little something like this...

* AdAge, 2007