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The death of advertising?

If you landed in a world without advertising today,

would you reinvent it?

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Who are we?The 90:10 Group is a global business consultancy which helps brands and media owners deliver business innovation through social technologies

• Jamie Burke (@jamie247) is its CEO. His background is in digital advertising, social media and as a digital entrepreneur.

• David Cushman (@davidcushman) is MD with 20+ years experience in traditional and social media. He’s the author of The Power of the Network and the blog FasterFuture.blogspot.com

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• All media that is a growing media invites the user into its creation and distribution. It is a social media.

• That which isn’t is slowly dying (becoming less relevant)• Advertising money has followed the users from broadcast media to these

new and more social medias• But so has the ineffective mass advertising model• In a peer-to-peer (P2P) world this is even less relevant• Social media actually offers the opportunity to form relationships

between an organisation and its customers.• This creates new and more valuable opportunities for ALL parties (media

owner, user and previously advertisers).• We’ll ask: If you landed in a world without advertising today, would you

reinvent it? And if not what would replace it?

We’re here to tell you...

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Why is it dying?

Economic Media

Don’t be fooled economic problems are just exaggerating a bigger disruption in media

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Socialisation of Media• Globally more time is spent with online than with any other media (IDC 2009) • This is now true locally in Spain• All Top 20 media online is social in some form...

It can be shared, commented on or has been created by users• Google’s search results are dominated by Wikipedia, blogs and increasingly Twitter.

They now have launched Google Social Search.• Almost every website has a comment box• Every TV and radio show has an official Facebook Fanpage and many unofficial

communities• News is reported quicker and more freely via Twitter than by the BBC• More UGC video has been uploaded to YouTube in one year than has been

broadcast by TV, globally, EVER• Almost every computer game in the last year released by major studios, has some

kind of online multi-player and social element to it. MMOPRG Massively multiplayer online role-playing games has become a global billion dollar industry.

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Traditional BroadcastMedia

(TV / Print)

Social Networks Mobile?Search

Ad money and method follows eyeballs..

Online AdFormats

But has anything improved beyond incrementally?

Mass Market AdvertisingPractices

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The Best of Digital?

Video combined with flash, still 97.4% waste

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With Behavioural Targeting?• Industry CTR = 0.06% - 0.17% is low• Lets be generous and call the average 0.12%• For every 1,000,000 Impressions that’s 12,000 Clicks • That’s 988,000 people who you spammed and 98% of the

clients budget wasted.• Re-Targeting only improves this on average by max of 0.05%

(2009 offmaddissonave)• ValueClick report 98% of people leave a site without

converting and the average user needs 7 different contact points before completing a purchase.

• So you could argue you actually need 7 times the impressions.

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Search?• On average, Adwords accounts will

have a CTR of around 2%.• E-commerce sites might have an

average around 6%. • Accounts where a company only bids

on terms related to their trademark might have 15%.

• In general Google AdSense generates around $2 and $3 CPM on an average with CTR – 1-5% (SEO World)

• But Google don’t publish figures (why?)• Natural Search: Google and MSN just

integrated social into their results so SEO and gaming the system will become secondary to real PEOPLE

by pasukaru76

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The clever are socialising but not REALLY innovating..

Advertising such as PPC Remains?

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Social Networks?• News Corp reports $203 Million Loss on

MySpace Writedown (Aug 2009)• Twitter hasn’t made a penny.. Yet.• In 2010 Facebook will account for nearly one-

quarter of all social network ad spending worldwide (Source Vitrue SRM Findings) and still only just broke even on August ’09

• But that’s just ad money following eyeballs.• Value is still low with CTR on ads estimated to

be between 0.01%-0.05% (Business Week)• As brands try to build communities on fan

pages via Wall Posts it can raise to around 6.5%. There’s a clue in that.

• But the only networks to make money are via virtual goods (VirtualTencent.com) 1 billion in 2009 (There is a clue in that too)

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Mobile• Some people will currently pay for the

privilege of content delivered to their handset but soon we will take this for granted. It will be expected.

• Content will become increasingly user generated

• Geo-targeting around UGC will increase CTR and CR but... Still fail Blyk – FAIL

• The only ones making real money are those selling ringtones ($750 million, CNN Money), games and Apps ($250 million in Dec 2009, Apple)

• Apple’s App Store – hasn’t been about advertising its delivered function, utility, fun and innovation

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Insanity

• Technology has got better and better yet the advertising model continues to fail us.

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This is not temporary• This is not cyclical – it is

structural• The way information is created,

published and distributed has changed.

• The terms and conditions of the way you were able to engage with consumers have changed. Forever.

• You can’t apply traditional advertising models to the social space.

• What worked for mass media does not work in the peer to peer realm of social media – where people talk to each other.

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Hugh McLeod: GapingVoid.com

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Social Media: is everybody’s media• Digitally enabled peer-to-

peer networks• From email and sms to

Tuenti and Twitter• Distribution is by people to

people• Content is by people to be

shared with other people• POWER! It’s shifted from

the centre to the edge – from you to them...

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Where people have access to social media they use it. And they don’t stop

The more we talk to and hear from our friends, peers, people we trust, the less we need central authorities broadcasting a lowest common denominator version of events Across Europe, the more people participate in social media, the less they consume broadcast media. Global Time Spent on Social Media Sites is up 82% Year on Year (Nielsen)

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A different animal: Then sheep, now wolves

By Bertoz By Tambako

Easy to herd Hunt in Packs

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What worked in the old world won’t work in the new

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YOU SPOKE THEY LISTENED

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You were in control

• You made the content• You distributed the content• You controlled the user experience

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• Who gets to control production of content now?

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• Who gets to control production of content now?

Anyone and everyone

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• Who gets to control production of content now?

Anyone and everyone• Who gets to control distribution of content

now?

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• Who gets to control production of content now?

Anyone and everyone• Who gets to control distribution of content

now?Anyone and everyone

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• Who gets to control production of content now?

Anyone and everyone• Who gets to control distribution of content

now?Anyone and everyone• Who gets to control the user experience

now?

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• Who gets to control production of content now?

Anyone and everyone• Who gets to control distribution of content

now?Anyone and everyone• Who gets to control the user experience

now?The user controls their own A-Z journey

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EVERYONE IS AN

ADVERTISER NOW

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We are in the world of the ever lengthening long tail

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You can’t buy space in conversations

They can

Here’s how

http://flickr.com/photos/caribb/

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You can’t target every community of purpose.

They can

Here’s how

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THE STAGE

Scale = audience = where the eyeballs have gone

Message broadcast at audience

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THE STAGE

But in social networks the broadcast message doesn’t arrive

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They aren’t looking at The Stage.

They are looking at each other

Scale = lots of communities of purpose = where the eyeballs are focused

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•They share messages among their groups.•They adapt them to suit their groups•They make the message theirs

We share what we think is good with people who (we think) will think its good, too

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•The groups are not fixed (adhoc).•The message spreads when the groups reform around a new purpose

Users select what they think is cool (has utility) to take with them on their journey

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Participants adapt the message

to suit the group they wish to share it with

The people best-placed to adapt the message are in the group, not on the stage

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And so it continues; the message evolving to survive. Or it dies out

We share what we think is cool. That which we co-create, we embrace

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They aren’t your groups, they are theirs.

They aren’t your messages, they are theirs

Marketing is not done to them, it is done by them

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So, if everyone is an advertiser now...

• Where does that leave you?• What is your role?

• What would you do if you were parachuted in to Planet Now?

By Satane

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What if your role isn’t...

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What if your role isn’t...

• To control who makes content

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What if your role isn’t...

• To control who makes content• To control distribution

By STP243

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What if your role isn’t...

• To control who makes content• To control distribution • To control the user experience

By: mattimattila/

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What then?

• If it is not to control who makes content• If it is not to control distribution • If it is not to control the user experience

What is the role of advertising, then? If it’s going to survive then it’s going to have to adapt.

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The Market Development Cycle

End of Life

Fault Line

Main Street(Declining)

Indefinitely Elastic Period

Main Street(Early)

Technology Adoption Life Cycle

Chasm

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Opportunity for Innovation?

Structural

Business Model

Experiential

Product

Disruptive

Application

Process

Marketing

Reve

nue

Gro

wth

Time

Disruptive

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We asked 90:10 consultants: What replaces ads?Interesting content and services and the means to see what those around you are doing, thinking & getting

excited about – Mark Earls (author Herd)

A network of active and (usually) passive recommendations – Luke Brynley-Jones – organiser Monitoring Social Media

The tour de France – designed to sell newspapers ,says it all – Alan Moore, Author Communities Dominate Brands 1. Transparency of Offering (allowing crystal clear understanding 2.

Relevancy of Communication (not assumed but assured 3. Value of Incentive (not necessarily monetary 4. Ease of Interaction (enabling intuitive interaction) – Jonathan MacDonald: CEO JME

Long term relationship and advocacy building. Nothing advertises better than buying the same thing again and telling your friends you like it Dr Chris Thorpe – Developer Advocate The Guardian, advisor to UK Government on open data

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We have the greatest set of tools in history to connect people• Surely you

don’t think we should try to use them to harvest eyeballs?

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We asked Twitter

Commercial partnerships

Affinity, advocacy and

influence

Back to how people got the message out before the

printing press – with steroids

TrustThe broadcasting of content and opinion

Virtual goods

RecommendationsEngagement

Word of mouth – on and offline

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Making a better message

• Many of us default to thinking about ways we can make incremental improvements to the messaging or our targeting

• It’s where innovation has focused.

• It’s what technology has been deployed to respond to.

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It’s an approach that failsBleeding edge tech doesn't = bleeding edge demand. I’m old enough to remember Betamax.

• Then there was Phillips CD-i – answering questions customers hadn’t asked

• It tried to do too many things• Phillips added and added technical

functions and spec. • The execs were convinced the

market would lap it up. • But they forgot to ask what the user

would find useful.

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Who are you innovating for?

• Often we innovate to make things better for ourselves.

• Or to show off how technically clever we are (our spec's bigger than your spec!)

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A technological arms race• Is this what much innovation in digital

marketing has been about? • Sharper and sharper focus on tracking

and responding to online behaviour - cleverer and cleverer tech, more and more spec.

• All the better to serve the right ad at the right time...

• All the innovation focused on building a better advert.

• A technological arms race in pursuit of incremental improvements in quality or relevance of messages.

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• As many people in the supply chain of advertising as it could be?

• Of course it’s useful to those in advertising, marketing, PR... but

• What do other elements of the messaging supply chain want from digital innovation – from the best-ever way of connecting people?

• Is a better advert what the manufacturers and service providers want from digital technology?

• Is a better advert what 'consumers' want? (they’d like better info, of course, but is that all)?

• Is it what media owners find most useful?

Who is that useful to?

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Not a better message, better things

• What if what we all actually want (manufacturers and service providers - customers, media owners too) is improvement in quality or relevance of products and services?

• More potential 'customers' for advertising would find that useful.

• So the role of advertising and marketing may just be in deploying your skills and relationships to improve the quality and relevance of products and services.

• How do you innovate that using digital tools?

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Become the platform

A platform organisation uses its available resources to find, connect and support those who share its Purpose.

Understand and express your

Purpose

Discover and introduce those who share your

purpose

Surface what the group wants to

fixAct to fix it

Value innovationBetter-fit solutions

More efficient

marketing

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This is not just an advertising solution

• It’s about much more than message delivery, more even than behaviour changing

• This is a solution for media, for consumers, and businesses

• This is the future of the business of business

• It is a solution for the way things get made and made better, for how services get created and how ideas get shared

• It is the new way the world gets changed

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Platform thinking• Organisations should be ‘enabling platforms’ – to

bring people together to create outcomes they all care about.

• Using technology creatively to bring people together to act delivers the most powerful consumer engagement there is:

• That which we create, we embrace. • That which we create we advocate – to our peers.• Without peer-to-peer sharing there is NO

distribution in social spaces.• Marketing and advertising agencies should use

technology creatively to join their clients in building platforms.

• Help those with shared purpose find each other, talk together, act together and improve what matters to them, together

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Instead of this

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Throw away your hammers; open your doors

What they get

What you tell them they

want

In-the-silo design

What they sat they want

Beyond the Silo

What they want

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Or be a broken business• Inspired by Clay Shirky: • ‘A screen that ships without

a mouse, ships broken’)• Any business that runs with

out a comment box, is running broken

Doing business without being open to contribution, is the wrong model for the networked world:

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Any business that fails to open up to the riches it could share in through the feedback loops and real-time collaboration the internet enables, is a business that is in peril - at risk of being disrupted and defeated by those that are.

Next to those from the open future, it is broken.

Don’t let yours be one of them.

Internal External

Collaboration

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We want to talk to you

Jamie Burke: +44 7590 488502Jamie@ninety10group.com

David Cushman +44 7736 353590david@ninety10group.com