Randall Rothenberg, President & CEO, Interactive Advertising Bureau (IAB)
If you look back at the modern history of advertising, starting with the industrial revolution, you’ll discover that the discipline has been entirely supply-driven. It came into being because manufacturing and equipment had been developed that allowed companies to create enormous quantities of goods—and advertising was a means for creating the demand and the differentiation to sell all of the stock.
Consider the H.J. Heinz Company. Established as Heinz & Noble in 1869, the partners canned and bottled vegetable products and delivered them to the shelves of groceries in urban centers. Before this, groceries sold items like pickles and grains in unmarked barrels, and the local grocer would advise shoppers on what to buy. The challenge for brands like Heinz at the time was to circumvent the grocer and his bins of often locally-produced goods, in order to generate demand for their mass-produced product. The brand – the actual mark, a mark that stood for quality and consistency – came first.. Advertising followed soon thereafter. For what good is a brand if it isn’t communicated? How – to use today’s lingo – will it scale?
Today the dynamic is shifting. Digital technologies have provided a powerful way for individuals’ demands and interests to be communicated up to the brand. There are now also ways for companies to manufacture more customized, or semi-customized, goods and services to meet the demands of smaller consumer groups. Over the next several years, advertising will increase, and possibly complete, its transformation from a supply-driven communication service to a demand-driven communication service. Advertising will become increasingly focused on a four-step process: listening to consumer demand, analyzing this demand, innovating against the demand with suppliers, and then communicating back out about the new consumer-driven products or services both to known aficionados, and to everyone who else might be interested in exactly the same thing.
It’s the evolution from “hey, we have all these cans of pickles, how are we going to dispose of them?” to “hey, there are all these people who want all these different kinds of pickles that we never thought of before. We’re going to create this on-trend pickle and then communicate the wonder of the product both to the people we know want it and to others who may want it, too.”
What do we need to do now for this future?
This progress has been facilitated by the newfound ability for mass listening and responding, through the evolution of sentiment analysis, social media, data mining, behavioral analysis, and all of the many ways businesses can now listen to what’s going on in the world. But we need to be better at turning technological capabilities into actionable business insights, new products and services, and new forms of interaction that delight, surprise, inspire, inform, and improve quality of life.
First, we must become much more adept at picking out the signal from the noise. We have to understand that technology alone will not get us there. Human interactions and skills are required to identify and understand significant marketplace trends, and then to test them scientifically. We need more than a processer and an algorithm to make sense of the massive daily volume of census-based information, and to pick out, for example, exactly which sentiments are transitory and which will still be relevant by the time the company produces, distributes and advertises the new product.
We also must bridge the gap between the West Coast-centered technology culture and East Coast-centered media and advertising culture, in order to match technological advancement with big brand business goals. If both cultures inform each other and grow together, consumer demand will be heard and responded to like never before, in ways that today only exist in imagination. To continue to fuel this engine, we need to make sure that kids get basic technical and cultural educations in school, so that people are being trained to think in this integrated way. This balance of innovation and communication is going to be much of the economic basis of advanced societies in the future; benefitting from it will require education in the arts and the sciences.
Lastly, but perhaps most important, all of this progress goes away if men, women, and children get bored. There has to be a renewed emphasis on the creation of great content that makes people want to come back to the same places routinely over long periods of time, to create the opportunity for their preferences to be understood. This isn’t to say that the digital world is going to reshape itself into a 3 or 50 network television universe, or even that the content will be a movie, book, or radio program. But without a reason to look at a screen, read something, listen to something, or buy something, the data jockeys, sentiment analysts, and algorithm innovators are never going to know what people want. Everything goes back to great content.