IGHT ON THE FUTURE OF ADVERTISING

ARTWORK The Office of Creative Researchi(Mark Hansen & Ben Rubin), ShakespeareMachine, 2012,37 blades display fragmentsof speech from the Bard's plays that appearand then dissolve, 21' x 17', Public Theater,• e w York City

Xu-

HBR.ORG

You can make ubiquitousadvertising acceptable-even welcome—to consumers.by Jeffrey F. Rayport

Advertising'sNew Medium:Human Experience

ast summer the London-based beverage giant Diageo de-vised labels for its Brazilian-market whiskey that turned thebottles into a conduit for custom video. Timed to hit shelvesfor Father's Day, in August, the labels enabled a gift giver toscan a code and upload a video message for Dad to the doud.Dad could scan the code with his own phone to receive therecorded good wishes. The videos promoted the brand,

[tightened social bonds, and allowed the company to recon-Inect with both giver and recipient for future promotions—levents, tastings, offers, and the like. Diageo transformed

the most mundane form of advertising—a label with a logo—into an open-endedpersonal messaging system that could be woven into consumers' lives.

This is a far cry from advertising as we've known it—ubiquitous but oftenpoorly targeted, intrusive, ignored at best and actively rejected at worst. Todayconsumers are drowning in irrelevant messages delivered across media fromthe web, TV, radio, print, and outdoor displays to a proliferating array of mobue

March 2013 Harvard Business Review 77

SPOTLIGHT ON THE FUTURE OF ADVERTISING

devices. Screen displays are pervasive: Smartphonesand tablets, ATMs, airport check-in terminals, re-tail checkout machines, and information kiosks instores and malls all carry marketers' messages. Me-dia networks have infiltrated scores of out-of-homeplaces in our daily lives: taxis, trains, buses, eleva-tors, filling stations, bars, restaurants, and subways.So-called narrowcast networks, such as WalmartTV, have become media vehicles in their own right,reaching audiences easily as large as those of theleading cable networks.

In this media-saturated world, advertising strate-gies bunt on persuading through interruption, repeti-tion, and brute ubiquity are increasingly ineffective.Seeking escape from the barrage, consumers DVRthrough TV spots, block pop-ups on their browsers,opt out of banner ads, and pay content providers likePandora to not deliver advertisements. To have animpact, then, marketers must fundamentally rethinktheir advertising strategy and execution and expandtheir definition of what, exactly, advertising is.

Online Ads inthe Four Spheres

mOnline advertising technologi|enhance marketers' ability to 1to a consumer's specific context.Through real-time bidding on online ad exchanges, marketerscompete in split-second auctions for the opportunity to serve anad to an individual consumer on the basis of attributes such asher web-browsing history, social media use, purchase behavioronline and off, location, and demographic profile. Having createdas many as several thousand variations of an ad for a standardonline ad unit, such as a banner, marketers can choose the ver-sion—in a process called dynamic execution—that's most likelyto resonate with the recipient. All this happens in 30 to 120 milli-seconds (sources vary), from the time a user clicks on a link ortypes in a URL (initiating an "ad call") to when the web page ac-tually loads. The same technology can be extended to the mobileweb and will soon reach all electronic media, including television.

This artide offers a framework for that process. Itis based on the understanding that human experi-ence—from one's online and offline travels to socialinteractions, group affihations, and thought pro-cesses—is a vast medium for advertising that can andshould be approached strategically. Whether adver-tising works in this arena depends on how marketersconceive its purpose, how they craft and place theirmessages, and, most important, whether consum-ers welcome the messaging and invite advertisers'brands into their Uves.

The model underlies my teaching and consultingto senior executives within the global agency andmarketing services company Omnicom Group andthrough MarketspaceNext, a digital strategy firm.The ideas behind it have been applied in media, retail,financial services, pharmaceutical, and consumerpackaged goods companies.

Be a PresenceStandard ad messaging and conventional creativeexecutions and placement are rapidly becoming out-moded. To win consumers' attention and trust, mar-keters must think less about what advertising saysto its targets and more about what it does for them.Rather than conceive ad campaigns vnth a beginning,a middle, and an end that hammer home a point,they must think about advertising—as well as theofferings it promotes—as a sustained and rewardingpresence in consumers' lives.

That's still a new and disruptive idea for a dis-ciphne that remains most at home with TV spotsand display ads. Nonetheless, marketers at Diageoand elsewhere are pushing advertising's bound-ciries. Companies like Demand Media, Skyword, andBuzzFeed, for example, have fueled the growthof so-called native content, creating both text andvideo that complement commercial messaging andencourage consumers to engage with it becauseit's more than an advertisement. Rolex links its on-line display ads to the World of Music—a New YoriiTimes survey of concerts and operas, branded withthe compjiny's iconic crown logo, that's designed toappeal to the Rolex-buying demographic. Shortlyafter the U.S. presidential election. Fidelity placedfuU-page ads in major papers that posed the question

"How could the election results afl'ect the markets?"and invited readers to dov^niload insights from thecompany's expert panel.

Such advertising is conspicuously different fromthe conventional sort. In the best cases, it has edi-

78 Harvard Business Review March 2013

ADVERTISING'S NEW MEDIUM: HUMAN EXPERIENCE HBR.ORG

In a media-saturated world,persuading through interruptionand repetition is increasinglyineffective. To engage consumers,advertisers must focus on whereand when they will be receptive.This requires strategically em-bedding ads in four domains ofhuman experience:

The public sphere, where we move from

one place or activity to another, both

online and off;

The social sphere, where we interact

with and relate to one another;

The tribal sphere, where we affiliate with

groups to define or express our identity;

The psychological sphere, where we

connect language with specific thoughts

and feelings.

Each sphere has varying levels of effec-

tiveness for driving desired behavior such

as awareness, purchase, and loyalty.

Advertising successfully in each of these

domains requires that messages offer

value and that consumers trust and

welcome them.

torial integrity and engages through relevance andvalue. But no matter how worthwhile your message,competing for attention simply by yelling louderacross the proliferating array of media platforms isnot a sustainable strategy. If human experience is amedium for advertising, how can marketers engageconsumers there in ways they will welcome?

In my work, I advise marketers to approach thismedium as a landscape composed of four domains:the public sphere, where we move from one placeor activity to another, both online and off; the socialsphere, where we interact with and relate to oneanother; the tribal sphere, where we affiliate withgroups to define or express our identity; and the psy-chological sphere, where we connect language withspecific thoughts and feelings.

Marketers have long placed advertising in each ofthese spheres, but often unwittingly or not strategi-cally. By explicitly mapping their programs and mes-saging to these four domains, they can engage con-sumers in effective new ways. Rather than focusingfirst on communication strategy and marketing mix,they should begin by considering how consumerslive their lives and under what circumstances theyvnll prove receptive to messages in these domains.

The Public SphereAdvertising in the public sphere typically engagesconsumers during moments of downtime whenthey're moving between one point or activity andthe next and have attention free for new inputs. Suchads have a long history, of course; beginning in the1920S, for example, Burma-Shave famously erectedsequential signs that delivered rhyming ad messagesas drivers whizzed past. More recently. CaptivateNetwork put silent, sponsored screens in office towerelevators, and PumpTop TV put digital displays ongasoline pumps.

In the virtual realm, real-time bidding and dy-namic execution enable marketers to buy online ad

space and serve up any one of hundreds or thou-sands of variations of an ad tailored to the consum-er's profile and, increasingly, location—within milli-seconds (see the sidebar "Online Ads in the FourSpheres"). As the targeting of such ads improves inthe public sphere, they will become less the intru-sion they're considered now and more a source ofwelcome messages. Mobile apps and services thatbuild on these capabilities are a powerful way toreach consumers between activities or in transit, be-cause that's when people reflexively turn to their de-vices. In fact, a study in the January-February 2013HBR ("How People Really Use Mobile") reported thatconsumers spend nearly half the time they're on mo-bile devices "seeking relaxation or entertainment."

Effective public-sphere ads follow one or more offour principles:

They are relevant in context That is, the messagealigns with the consumer's experience at the mo-ment she encounters the ad. The online shoe retailerZappos understood this when it placed ads in the binsused to move possessions, including shoes, throughU.S. airport security. This placement connects idletime in transit with unintrusive but relevant messag-ing. A billboard related to your needs (a restaurant adon an interstate) is similarly contextually relevant.

They help people reach personal objectives. IKEA,the global Swedish discount retailer, has integratedits advertising with a range of transportation solu-tions for customers at its Brooklyn, New York, store.The company provides a water taxi and a shuttle bus,branded and painted in its iconic blue and gold, toget from Manhattan and back, and makes it easy toreserve Zipcars—some of them branded as well—inadvance of or during a store visit. The buses, boats,and Zipcars serve as mobile billboards for the brand:It's advertising conceived as problem solving.

They are branded interventions, entering the livesof consumers in targeted and useful ways whenand where they're desired or needed. Consider the

March 2013 Harvard Business Review 79

SPOTLIGHT ON THE FUTURE OF ADVERTISING

battery maker Duracell's initiative after HurricaneSandy pummeled the northeastern seaboard oftheUnited States in October 2012. Duracell dispatchedRapid Responder trucks emblazoned with the brandinto devastated areas to serve as mobile chargingstations, provide people with web access, and, ofcourse, give away its own batteries.

They provide engaging, refreshing, or compellingexperiences. Pop-up stores and pop-up trucks, whichare surprising, experiendally rich, and brand-focused,provide one example. From 2006 to 2010, for in-stance, Charmin placed temporary public restroomsfeaturing its products in Manhattan's Times Squareduring the holiday season, increasing brand aware-ness and building goodwill. Permanent brandedinstallations, such as the six Hershey's Stores in theUnited States, Shanghai, Dubai, and Singapore, areanother example. So are temporary acts that cropup in the midst of everyday life, including rovingStarbucks employees—wearing aprons featuring thecompany's famous Siren logo—who ply consumerswith complimentary cups of hot mulled cider on coldwinter days during the holidays.

Ads in the public sphere typically address a spe-cific practical function, but they can also exert influ-ence in the remaining three spheres, as we'U see.

The Social SphereAdvertising in the social sphere helps people forgenew connections or enrich existing ones. It can tumsocial interactions themselves into carriers of ad mes-saging. Like public-sphere advertising, it must appearin the right place at the right time with the right mes-sage. To that end, it must be relevant in context, aHgnwith social goals, address a social need, and facilitateinteraction in innovative ways.

Diageo's "talking bottles" are an example: Theyreinforce existing relationships while also reinforc-ing the brand. Indeed, any advertisement that con-sumers are inspired to pass along serves this purpose.Several million people have shared Procter & Gam-ble's comical Old Spice video ads online, delightingfriends, cementing connections, and immeasurablyboosting the brand.

Walmart's Shopycat and other gifting platformsadvertise by addressing social needs, such as findingthe right present for a friend. Shopycat generates giftrecommendations for consumers' Facebook friends;it was launched in 2011 through a rollout to the li mil-lion fans who "liked" the retailer's page. The systemuses semantic intelligence to interpret users' com-

Effective advertising in each sphere of human experiencedepends on providing relevance and value.

AdvertisingRequirements Examples

Public Spherewhere we move from one place or activity to another in the physicaland virtual worlds

Is relevant in its context

Aligns with consumer goals

Provides utility

Is engaging, compelling,and refreshing

Zappos ads in airport security bins

Charmin pop-up focilities

Duracell Rapid Responder trucks

Social Spherewhere we interact with and relate to one another

Is relevant in the social context

Addresses a social needor solves a social problem

Facilitates social interactions

Diageo whiskey label codes

Walmart Shopycat

Nintendo Wii parties for youngmoms

Tribal Spherewhere we affiliate with groups in order to express our identity

Addressself-exp

Performs as a social signal or astatus marker

Provides a form of affiliation

Empowers the individual

Hermès, Gucci, andLouis Vuitton bags

Psychological Spherewhere we connect language with specific thoughts and feelings

Provides a new means ofarticulating ideas

Identifies a brand withan action or an attribute

Links a word to a patternof thought

Associates the brandwith an emotion

Nike's "Just do it"

Staples' "That was easy"

Life is good, Inc.'s logo and motto

8o Harvard Business Review March 2013

ADVERTISING'S NEW MEDIUM: HUMAN EXPERIENCE HBR.ORG

ments—noting, for example, that an individual didor didn't like a book or movie—and make tailoredrecommendations. Another form of social-sphereadvertising uses a promotional event to help con-sumers achieve social ends. Taking a page from theTupperware playbook, Nintendo fueled the highlysuccessful launch of its Wii video games console byidentifying women vifho fit the "young mom" profileand providing them with everything they needed—g¿ime consoles, catering, and event management—tohost Wii parties and connect with other moms. It alsounleashed a "backyard fence"-style word of mouth,online and off, that engaged a demographic thatnormally pays little attention to video or electronicgaming.

The Tribal SphereWhereas the social sphere emphasizes broad, diversenetworks, the tribal sphere is the domain of more-focused social engagement; here marketers can useor help create consumers' identification with groups.Advertising that leverages tribal affiliation must suitthe character and values of those involved; addressdesires for identity, self-expression, and member-ship; provide a social signal or status marker; andempower the individual.

Consider, for example, a cult brand like Oakley,with its high-performance sunglasses, goggles, andapparel, which relies heavily on tribal positioning.Not only do customers wear branded Oakley prod-ucts; they also display the logo separately—by, forexample, sticking decals on their cars. The brandname, detached from the product, signals inclusionin a tribe dedicated to extreme sports and athleticexcellence.

Yelp and similar online sites use tribal status as acore engine of their business. Yelp is populated ex-clusively by user-generated reviews of offline venuesranging from restaurants to cultural institutions. To-day it hosts nearly 33 million local reviews and claimsroughly 84 million unique visitors a month. Theleading producers of site content, however, are not abroad-based group. Rather, many reviews come fromwhat the company calls its Elite Squad, whose mem-bers are invited to social events at restaurants, night-clubs, and museums and are celebrated as belong-ing to a tribe. Their strong sense of affiliation makesthem powerful brand ambassadors who spread posi-tive word of mouth about Yelp online and off.

Starbucks, too, has done major social media out-reach to bolster tribal identity. Maybe its most clever

move of late was to link the online and offline worlds,awarding status markers—special barista badges—topeople who have become "mayors" of individualStarbucks stores by virtue of their number of Four-square check-ins. These badges entitle their wearersto store discounts.

Tribal-sphere advertising is of course not lim-ited to the masses. Luxury brands commonly useconventional mass media advertising while relyingon their customers to deliver the most powerful admessaging of all. Hermès, Gucci, and Louis Vuittonall depend on consumers' desire to signal their socialstatus—their group affiliation—by showcasing logosand brand names.

The Psychological SphereThis is the domain of language, cognition, and emo-tion. Obviously, all advertising ultimately operateshere in one way or another. But ads optimized forthis sphere are designed to insert words, phrases, oremotions into a consumer's psychological processes,where they serve as shorthand for complex concepts,inspiring action or triggering positive feelings. Theprinciples that guide successful advertising in thepsychological realm are simple: Such ads providenew ways to articulate ideas, engender habit forma-tion, guide reasoning, and elicit emotion.

Psychological-sphere ads typically operate in oneof four ways:

They use language to establish a cognitive beach-head for a brand. They may coopt commonplacewords or phrases, as Staples did with "That was easy,"Apple with "Think different," and Nike with "Just doit." Nike's motto is synonymous with the brand andassociated with the goal of achieving one's personalbest—in other words, it's both an ad and a motiva-tor. Psychological-sphere ads may also move brandsinto the language, usually as verbs: Think of Xerox,Google, and FedEx. Similarly, brands may use wordsto identify themselves with an action or an attributeand thus "own" familiar words in a new way, as Face-book has done with "friend" and Twitter with "fol-low." They may coin memorable words or phrases,hke Budweiser's "Whassup?" and Taco Bell's "Yoquiero Taco Bell," which took on lives of their ownfor consumers, reinforcing ad messages every timethey came to mind. Countless consumers daily utterVerizon's "Can you hear me now?" for purely practi-cal reasons; but each time, they reinforce both brandawareness and the implication that Verizon has thebest network.

March 2013 Harvard Business Review 8i

SPOTLIGHT ON THE FUTURE OF ADVERTISING HBR.ORG

They seek to create habits. "Just do it" nudges con-sumers to run every day or aspire to their personalbest. Alka-Seltzer's "I can't believe I ate the wholething" was conceived years ago to train consumersto reach for the company's product after every exces-sively large meal.

They guide cognition. IBM has used "THINK" sinceits founding to inspire employees and project its val-ues to the outside world—just as, more recently, theEconomist has promoted "Think responsibly" and

"Think someone under the table." Google's "Don'tbe evil," famously included in its IPO prospectus,became a mantra for entrepreneurs and consum-ers alike (despite some skepticism about Google'scapacity to abide by it). Josh James, the founder ofOmniture, a web analytics company now owned byAdobe, developed a simple phrase, "Think, go, do,"as the corporate mantra and brand tagline. From acognitive perspective, it's both inspiring and practi-cal. And Oneupweb, a digital services company thataims to connect customers with brands in every waypossible, operates according to a simple admoni-tion: "Be relentless." It, too, advertises the brand andguides thought.

They connect a brand with a mood or an emo-tion. Consider the brothers Bert and John Jacobs,who had been selling T-shirts door-to-door at col-leges and street fairs, with limited success. Every-thing changed when they created a shirt featuring ahappy-looking character, Jake, and his motto, "Lifeis good." The shirt generated an immediate positiveemotional response among their friends. Today Life

is good Inc. sells some 900 items through 4,500 re-tail stores and more than 100 independently ownedshops. Although the company's retail partners mayuse conventional forms of advertising. Life is goodInc. advertises only through the prominent logo andslogan displayed on the products its customers buy.It is rooted in the psychological sphere, promoting aftame of mind—optimism—captured in a phrase.

Placing Ads in the SpheresAlthough advertising in the four spheres has simi-larities to conventional ad campaigns, it takes acustomer-centric rather than a media-centric ap-proach. Instead of focusing first on which media toemphasize in a campaign—television, web, mobile,outdoor displays—marketers should start by deter-mining how the envisioned advertising can integrateinto consumers' lives in ways that deliver value andwin their trust. The notion of a conventionally finitead campaign becomes less relevant. Advertising inthe spheres is designed to establish a sustained pres-ence that ranges from branded utility to instrumentof thought.

The following five steps offer a useful frameworkfor applying these ideas:

1. Define objectives first from a consumer's,not an advertiser's, point of view. Marketersoften fail to clearly articulate their strategic goals atthe outset, or the objectives they choose are vague,media-focused, or excessively broad. With a spheresstrategy (and proliferating media in which to use it),clear objectives and priorities are more important

CONSUMIR BEHAVIORAWARENESS TRIAL

PSYCHOLOGICALSPHERE

82 Harvard Business Review March 2013

SPOTLIGHT ON THE FUTURE OF ADVERTISING HBR.ORG

To win consumers' attentionand trust, marketers must thinkless about what advertisingsays to its targets and moreabout what it does for them.

than ever. Is the primary goal of the campaign tobuild awareness? Encourage consideration? Drivepurchase? Reinforce loyalty?

2. Target the campaign to create value forconsumers. Each ofthe spheres offers specificstrengths; choosing which sphere or spheres toemphasize in an advertising effort initially and asit evolves depends on determining where the con-sumer's and the advertiser's objectives intersect.Companies applying this model have found, for in-stance, that advertising in the public sphere drivesawareness, trial, and purchase, and advertising in thetribal sphere drives purchase, brand preference, andloyalty. (See the exhibit "Choose the Right Sphere toAchieve Your Goals.")

3. Test, listen, and adjust ads to improvethe customer experience. Like traditional adver-tising strategies, a spheres-based approach requiresdynamic testing. Even in the appropriate spherean ad campaign may be ineffective for a variety ofreasons. Therefore it's critical to "listen" to the in-tended targets of a campaign with the technologicaland conventional tools available—from automatedonline behavioral tracking and monitoring of socialchatter to anthropological observation of consumersin the physical world—and adjust course in real üme.Facebook's Beacon, which alerted friends when-ever one of them made an online purchase, causedan immediate backlash; Facebook quickly pulled itand shifted to less invasive efforts such as servingtargeted online ads.

4. Evaluate an expansion strategy. Depend-ing on results or the shifting objectives of a cam-paign, marketers may withdraw advertising fromone sphere or extend it into additional spheres. Forexample, an effective social-sphere campaign maylead a loose social group to start acting like a "tribe"in which individuals express their identity through

affiliation. BMW motorcycle clubs began as loose so-cial affiliations and shifted over üme into close-knituser groups, not unlike the intensely tribal HarleyOwners Group. Similarly, advertising in the publicsphere may produce a word or phrase associationthat can be reinforced and exploited with ads spe-cifically designed for the psychological sphere.

5. Constantly look for ways to refresh themessage. Consumer attitudes and behaviors areevolving at an accelerating pace. Marketers mustconstantly gauge campaign performance and adapttheir approach in real time. This is fundamental foradvertising in the public sphere, where messagingmust play a useful, contextually appropriate, andvalue-creating role in people's daily lives, but it ap-plies equally to advertising in the other three spheres.For example, many brands maintain their relevancein the psychological sphere by refreshing either theirmessage (as in taglines and brand promises) or theirtreatments; think ofthe numerous times Coca-Colahas changed its logo and taglines without (in con-trast to Pepsi) losing the fundamental consistencyof its brand. And consider how social networks andconsumer tribes morph over time; having a freshmessage is essential to maintaining a campaign's rel-evance and value. The tagline of Twitter, an engineof tribal behaviors, has evolved from "A Whole Worldin Your Hands" to "What are you doing?" to "Followyour interests" to the current informative if wordy

"Find out what's happening, right now, with the peo-ple and organizations you care about."

ALTHOUGH ADVERTISING woven into the context of

consumers' lives is less interruptive than conven-tional advertising, it is also more constant. If market-ers abuse the tools at their disposal, their advertisingcan transform from "present and valuable" to "inva-sive and exploitative." Thus they must not only get

"permission" from the consumers they approach butalso engage them with deep respect. Advertising inthe public, social, tribal, and psychological spheresworks only when it is welcome and useful; the mo-ment it assaults the senses, invades privacy, seeksinappropriately to extract value, or otherwise abusesconsumers, they will reject it or, worse, react with ascorching backlash. 0 HBR Reprint RI3O3E

I Jeffrey F. Rayport advises corporations and privateI equity firms focused on retail, information, and

marketing services. He is a founding faculty member ofOmnicom University and the managing partner ofthe digitalstrategy firm MarketspaceNext.

84 Harvard Business Review March 2013

Harvard Business Review Notice of Use Restrictions, May 2009

Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for

the private individual use of authorized EBSCOhost users. It is not intended for use as assigned course material

in academic institutions nor as corporate learning or training materials in businesses. Academic licensees may

not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by any

other means of incorporating the content into course resources. Business licensees may not host this content on

learning management systems or use persistent linking or other means to incorporate the content into learning

management systems. Harvard Business Publishing will be pleased to grant permission to make this content

available through such means. For rates and permission, contact permissions@harvardbusiness.org.