Engagement & The Future Of Online Advertising

By Mark Kingdon
Meet Leah. She is a fictitious consumer, but one whose life in 2007 will help demonstrate how drastically online advertising is going to change over the next five years as it morphs from an industry based on impressions to one based on engagement.
Leah is a 20-year-old college student at an East Coast university. She’s finally acclimated to the cold winters (she’s originally from the South), but she still misses her sister and high school friends. They text back-and-forth and stay connected through MySpace, although lately Leah has grown to like Facebook more because it’s where she connects with her newer college friends. Leah works a few afternoons a week and every other Saturday at a clothing boutique to supplement the allowance that her parents provide. That’s Leah today.
We’ll jump ahead and look at Leah’s life in 2012 in a moment. First, let’s look at the dozen or so important trends that will shape consumer behavior over the next three to five years. In Leah’s case, three of them will be most influential:

1) Time and Place Shifting: Devices are changing the way people work and play and how they manage and allocate their time
2) Cause Consumption: buying things that do what you need them to and more, such as help the environment
3) Mo-dentity Management: People already have multiple online identities and managing them will become a key life skill.
Fast-forward to 2012. Leah lives in a medium-sized city in a Southeastern smile state. It’s summer, and she’s just back from a three-day birthday celebration with two of her girlfriends, where she was decompressing in a media-free, advertising-free, (notice I didn’t say device-free), emission-free eco-resort two hours from home.
Sort of like a Passages for the digitally over-stimulated (rather than the chemically dependent). Leah needed a reboot because she was fried. She has about 100 close followers (high school friends, college friends, and family) whom she regularly updates on her life with text, audio, and video snippets, and she follows many of them closely as well. (This is a big new trend, so keep an eye on it.)
Taking a break was great, but now she’s back to reality. Sitting at the kitchen table and drinking a green-tea fruit juice infusion, she changes the “Do not disturb” status on her mobile device’s profile page to “Back on the treadmill.” Within seconds, messages start scrolling across the feed beneath the mashup video that’s playing on her screen, which is brought to her by Method cleaning products. Most are network updates from friends, along with some news feeds.
But a couple of them – those blinking in red – are from her boss. So with a swipe of her index finger, Leah goes back to work. She clicks on her boss’s note and — blink — there she is, describing to Leah the details about her next project. I could go on, but I think you get the picture.
A visit to Facebook in 2007 provides another glimpse into what Leah’s life might look like in 2012. She’s spending her time connecting, engaging, documenting, sharing, following, and being followed. She can add and delete on a whim. News, opinions, and recommendations flood in from her friends. Filters are big in her life. She’s not spending her time consuming media (and the advertising that supports it) the way she used to; her content is broken up into smaller pieces, made into applications, and distributed across platforms — sometimes with advertising around it (or in it).
The world of online advertising — let’s call it digital marketing instead — is going to get a lot more challenging as we race to meet Leah in 2012. The era of impression-based advertising (lazy man’s marketing) is being replaced by the era of engagement. Facebook and its social-networking cohorts will join Google (GOOG) as big entry points to the digital world.
At the same time, flat, long-form media will become bite-sized and in many cases “app-lified.” It took less time for new ad networks to begin monetizing apps in Facebook than it took Microsoft (MSFT) to acquire Aquantive — and the Facebook API has been open less than ninety days.
Marketing messages and the way that they are presented to consumers will also change dramatically. Search will still be a powerful tool, and on the commodity end of advertising, you will still see zillions of “impressions” presented to consumers in a wide array of formats. But they will be micro-targeted, with the image and message compiled dynamically just for that viewer. Exploding formats and media will create a measurement and tracking nightmare, but complex algorithms will optimize everything on the fly.
Although search will still be a powerful tool, the big money in digital marketing will be in getting people to engage with a brand. Agency winners in that world will be a new mashup of things we already know: part ethnographer, digital strategist, architect, air-traffic controller, impresario, film director, video game artist, hacker, and data freak. They will be the people who create and spread engaging content and experiences that connect consumers and brands.
The smartest in our industry have moved past reach, frequency, awareness, preference, and conversion — they are working on inspiring, engaging, and persuading consumers.
Digital marketing in 2012 will be about simultaneous combustion where preference is created in an instant. Everything is being compressed to the third power, especially the precious milliseconds that marketers have to connect with consumers.
Mark Kingdon is the Chief Executive Officer of Organic, a digital media agency. He previously worked with idealab!