Advertising Federation “ What Web 2.0 Means for Ad Agencies” April 15, 2007

What we will talk about… Thinking Web 2.0 - Exploring the Social Impacts What is it? The Expert View A Guided Tour How does it behave? How are we changing behaviour in response? Beyond the Web The Big Picture Being Web 2.0 -Tips for How Agencies May Operationalize Asking questions of ourselves Evolving our roles How some have evolved in response Taking the first steps Looking ahead

Thinking Web 2.0 - Exploring the Social Impacts

What is it?

The Expert View

A Guided Tour

How does it behave?

How are we changing behaviour in response?

Beyond the Web

The Big Picture

Being Web 2.0 -Tips for How Agencies May Operationalize

Asking questions of ourselves

Evolving our roles

How some have evolved in response

Taking the first steps

Looking ahead

Time spent online vs. television Forrester’s Consumer Behavior Online: A Deep Dive 5 6 12 13 16 Hours spent online/wk 14 11 12 11 11 Hours watching TV/wk Seniors (62+) Older Boomers (51 – 61) Young Boomers (41 – 50) Gen X (27 – 40) Gen Y (18 – 26)

Compound annual growth in advertising spending Veronis Suhler Stevenson Communications Industry Forecast Participation Monologue 46.1% 24% 6.2% 6.9% 2004 - 2009 109.1% 15.8% 1.2% 4.7% 1999 - 2004 Videogame advertising Consumer internet Consumer magazines Television Years

Broadband impacting TV commercials From 2004 – 2006, broadband adoption in the U.S. increased from 19% to 40% 42% of users who have broadband access stop watching television during commercials and go online 85% projected broadband penetration in 2008

From 2004 – 2006, broadband adoption in the U.S. increased from 19% to 40%

42% of users who have broadband access stop watching television during commercials and go online

85% projected broadband penetration in 2008

What is Web 2.0?

“ An attitude, not a technology”

But what does it represent?

How we see it

Web 2.0 in Action

Folksonomy

Social Network

User Generated Content

Convergence

Social Networks…again

Data transformations (i.e “Mashups”)

2.0…Beyond the Web

Hacking

What’s the “2.0”?

Customers Audience Users People

Learn Feel Connect Trade

TECHNOLOGY HUMAN BEHAVIOR

DEMOCRACY REPURPOSE So what is advertising in a Web 2.0 context? CHEAP NETWORKING SHARE OPT-IN FAST COLLABORATION CONVERSATION CO-CREATION FUNCTIONAL ON-DEMAND PARTICIPATION PEOPLE-CENTRIC PERSONALIZATION DECENTRALIZED 2-WAY IDENTITY NETWORKING

Technology is evolving a new participatory role in our lives Humanizing Technology

Technology and social change have always predicted the next evolution of advertising… Cars and highways birthed the need for billboards Radio and Television demanded sponsorship and commercials Internet spawned spam and pop-ups What next?

Cars and highways birthed the need for billboards

Radio and Television demanded sponsorship and commercials

Internet spawned spam and pop-ups

What next?

How will we choose to respond to these technological and social changes? Ask ourselves, do you see a place for “advertising” within any of the humanizing spaces of the Web 2.0 frontier? Humanizing Advertising?

Ask ourselves, do you see a place for “advertising” within any of the humanizing spaces of the Web 2.0 frontier?

We don’t claim all the answers - but for certain, advertising has no sustainable role as predator and deceiver

Many people have a very clear vision of Advertising’s role in their lives Predator and Deceiver perhaps Entertainer (at our very best) Are we satisfied with our typecasting?

Predator

and Deceiver

perhaps Entertainer

(at our very best)

Are we satisfied with our typecasting?

And many clients have a very clear vision of Advertising’s role in their business

And what of our precious advertisements?

The craft of advertising is becoming marginalized to the periphery of our experiences (And this will only continue to accelerate)

Spam.

Spam.

Spam.

Spam.

Spam.

Spam.

Spam.

Spam.

Spam.

Spam.

So, as recovering habitual interrupters, how may we upgrade our software in a Web 2.0 context? Make our “advertising” the opposite of spam Invited Appropriate Special Portable Cross-platform Useful Timely Personal Entertaining Open Economical Scalable Adaptable Effective

Make our “advertising” the opposite of spam

Invited

Appropriate

Special

Portable

Cross-platform

Useful

Timely

Personal

Entertaining

Open

Economical

Scalable

Adaptable

Effective

In other words, Advertising 2.0 has to add real value to people’s lives Web 2.0 demands two types of value Entertainment value Advertising has always managed to deliver well Utility value Not so much… Most “advertising” as we know it has little to no utility value While it may have once been highly valued by clients It offers little value to people And its value to clients is now in question and being tested

Web 2.0 demands two types of value

Entertainment value

Advertising has always managed to deliver well

Utility value

Not so much…

Most “advertising” as we know it has little to no utility value

While it may have once been highly valued by clients

It offers little value to people

And its value to clients is now in question and being tested

The engagement formerly known as “ads” are fundamentally peripheral to the Web 2.0 experience.

…and what of “utility”? Ironically, no ads appear on word search for “utility”. Ironic? Or Telling.

And beyond the internet experience…what value do ads add within human experiences?

New York Red Bulls reverse the periphery model and put the brand at the very core of the experience.

And Red Bull is not content to merely attach themselves to a sport. They’ve tailored whole new sports around their brand promise.

Evian Spa is putting purified water at the center of a value-added experience.

Charmin is offering pure utility and a joyful delight—comfy, clean, safe bathrooms throughout icky Manhattan.

“… the role of marketers becomes more of intermediaries to the community of users …treating [them] as co-producers of value.” -Yochai Benkler Yale Law School specialist in Open Source Management

There are many Web 2.0-inspired roles that advertisers may begin to fill in Web 2.0 spaces and within people’s lives

There are many roles that advertisers may begin to fill in Web 2.0 spaces - and within people’s lives How may our roles fuel the core pillars? Learn Feel Connect Trade

Let’s play the role of Collaborators and invite co-creation with our brands Doritos online gallery of user-created submissions received 600M views during Super Bowl week. The SuperBowl airing, itself, promises 93M viewers.

Let’s be Journalists and spark a global conversation “ A viral video from Dove drove more traffic (500M impressions) to the campaign’s target site than the ad they ran on 2006’s SuperBowl”. Blogger chat fueled the spot to the top 15 most-linked-to videos of 2006.

Let’s be Listeners and leverage the long nose of transparency to fuel engagement Round 1: garnered 2M user sessions, 30M site hits, over 7M views, 4M YouTube views - one of the most successful ads in the history of YouTube”. Round 2: harnessed user anticipation and created passionate engagement with the whole process of creating of the “ad”

Let’s play the role of Provocateur and incite wholey participatory experiences CourtTV’s “Parco, P.I.” stunt campaign in NYC & LA “ One million hits to blog in one week, and most-viewed YouTube video of that week.”

Play the Economist and move fast(er) and cheap(er) 20 holiday-themed sites…one struck jackpot. 40M+visits, over half a billion hits, 2M Google hits, over 100 user-created videos on YouTube, total time spent on the sites - 642 years. Ideation to Production to market - 5 weeks.

Be a Life-coach and counsel the actual actions of our brand promises, not simply the words Built good-will before unveiling product, by establishing a fun, human, robin hood personality for the brand. 2 million hits on Ted teaser site, 175 million PR impressions , almost $5M in flights booked online before Ted even began flying.

Evolve our role as Brand Stewards. Let’s get out from behind the screens and be transparent. Virgin America appealed directly to people to marketplace point of difference and sign their petition to get DOT approval to fly in America. And they got it. JetBlue confesses to operational failures and issues both a very public apology and manifesto for change. Not ads.

Evolve from ‘Spin’ and leverage the new accessibility of empirical behavioral data Demands for accountable effectiveness are being met by Web 2.0 applications. This expectation is driving measurability of TV commercials (Nielsen Ad Rating, Google Pay-Per-Action)

Play the role of Assistant and provide pure functional utility Nike now believes digital thinking should be at the heart of ad strategy…so much so that they’ve signaled a warning to their agency partner of 25 years

Get from behind our screens and actually (gulp) meet with our customers (and critics)? To curb hactivist prejudices, Dell has made blogger outreach into a discipline. The company's team recently sat down for drinks, nachos, and fried zucchini at a pub with blogger (and outspoken Dell critic) Jeff Jarvis. (Jarvis picked up his own tab.) “ In a flash he transformed the borgish image of Dell for me,” says Jarvis.

What we said… Thinking Web 2.0 - Exploring the Social Impacts Technology and behaviour are intrinsically linked Both are evolving Web 2.0 everywhere These concepts are no longer peripheral, now pervasive Being Web 2.0 - How Agencies May Operationalize Change is real, heed the signals Shifts in technology and behaviour have always led change from Advertisers, we have weathered previous shifts Opportunity to expand our roles and abilities Niche plays are crucial to a decentralized environment Media neutral, idea-centric, solution-centric, people-centric Integrated marketing is a tactical necessity Relentless improvement, perpetual beta Advertising will live or die on the value it provides - entertainment value not enough Some agencies are already staking claims

Thinking Web 2.0 - Exploring the Social Impacts

Technology and behaviour are intrinsically linked

Both are evolving

Web 2.0 everywhere

These concepts are no longer peripheral, now pervasive

Being Web 2.0 - How Agencies May Operationalize

Change is real, heed the signals

Shifts in technology and behaviour have always led change from Advertisers, we have weathered previous shifts

Opportunity to expand our roles and abilities

Niche plays are crucial to a decentralized environment

Media neutral, idea-centric, solution-centric, people-centric

Integrated marketing is a tactical necessity

Relentless improvement, perpetual beta

Advertising will live or die on the value it provides - entertainment value not enough

Some agencies are already staking claims

Now what do we do? Quit speaking about new media as if were an out-of-body experience - get experienced Dive in Swim deep And everybody needs to get wet

Quit speaking about new media as if were an out-of-body experience - get experienced

Dive in

Swim deep

And everybody needs to get wet

Thank you for your attention.