What happens to advertising in a world of streams?

It’s no secret that more and more of the content we consume is coming in the form of constantly updated real-time streams, never-ending rivers that pour through Twitter and Facebook (s fb) and aggregation apps like Flipboard. It’s not a new phenomenon, but there’s no question it has been accelerating, and new offerings like Medium — the publishing platform from Twitter co-founders Evan Williams and Biz Stone — as well as others like Pinterest and BuzzFeed and Tumblr have helped ramp up the rate of adoption, as has the increasing shift to consuming content on mobile devices.

As appealing as these kinds of services are for users, however, they still have to be paid for somehow, which raises the question: What happens to advertising in a world made of streams?

As Choire Sicha notes in a post on this topic at The Awl, it’s great to look at the clean and stripped-down design of a site like Medium or an online discussion community like Branch or a lightweight blogging platform like Svbtle, but part of the reason they are so attractive is that they have no ads. While some new ventures like App.net are hoping to build platforms that are funded by users and the developers who build for them, content-oriented networks and services typically have to rely on some kind of advertising — a challenge that both Twitter and Facebook are confronting as well, with mixed success. As Sicha puts it:

“The late-day pasting-on of revenue programs to pretty products makes monster hybrids, and that just makes a lot of Dr. Frankensteins sad. It’s a little galling after they’ve all made it clear just how revolting they find advertising to find them circling back around later.”

Irritating people into clicking isn’t working

The cruel reality is that traditional advertising, with its banners and popups and site takeovers and other eye-grabbing tricks, is fundamentally irritating — and it becomes even more so when it interrupts a conversation or a social activity. As even advertising giant Sir Martin Sorrell of WPP has pointed out in comments about Facebook, the more socially oriented a service is, the more difficult it is to make advertising work in the way it did with more traditional forms of content and older platforms. Then, the reader was held captive to a certain extent, but in a world of digital streams that’s no longer the case.

So what happens to advertising? At the moment, everyone seems to be searching for an answer to that question. Sites like The Huffington Post (s aol) and Business Insider — which aren’t very stream-like at all — are relying primarily on traditional banner ads and other kinds of display ads to pay the freight. But while there is some money to be made with that approach (provided you have billions of pageviews to throw at it) that market is rapidly becoming super-saturated, to the point where clickthrough rates are being measured in thousands of a percent, and some of those are probably occurring by accident.

BuzzFeed founder Jonah Peretti

Some sites that are more stream-oriented, like BuzzFeed and Tumblr, are taking a different approach: BuzzFeed, for example, doesn’t use any traditional display advertising at all — instead, it works with advertising partners to create viral content that gets integrated into the BuzzFeed network, in the hope that some of that content will work its way into people’s browsing and link-sharing activity without them realizing that it’s advertising. Tumblr, which has repeatedly refused to implement any form of traditional advertising, is working on promoting branded content in a similar way.

When advertising is just another form of content

As Sicha points out, the sites and services that seem most compatible with that approach are Pinterest and its ilk, where users spend their time collecting photos and links to things they like — which in many cases are probably also things they will want to buy. That kind of information could be hugely appealing to brands, and so could creating a Pinterest collection of their own. Medium, which is taking a similar kind of collection-based approach to content, might also be able to appeal to advertisers on that basis. But how would users respond to advertising or explicit marketing in that environment? That’s not clear yet.

This model, which is to make advertising as “native” as possible — so that it looks more like the environment it appears in, instead of something irritating that is pasted on top of it, or stands between you and the content you want — is the one that seems to have the most potential, but it’s also the one that is the hardest to implement. Why? Because instead of just coming up with a standard banner or display ad, all of a sudden you have to create interesting and/or engaging content in the hope that someone will pin it or retweet it or share it in their stream.

That might seem easy if you make attractive shoes or potato chips that everyone likes, but it gets exponentially harder with other products and services. And even if you create a viral ad that gets shared millions of times, as Old Spice did with its infamous “I’m on a horse” campaign, there’s no guarantee that that is going to actually translate into sales. That’s why major brands of all kinds are pouring billions of dollars into developing their own content channels, whether it’s YouTube or a Tumblr or a blog inside Forbes magazine’s advertiser network (another form of native marketing).

The bottom line is that if advertising is just another form of content — and content is moving towards a world of mobile streams — then you have to figure out how content works now, instead of just slapping your banner ad on top of someone else’s. We may be seeing the initial seeds of the future with things like Twitter’s “promoted tweets” and Facebook’s social ads, but the backlash that even those experiments have produced makes it obvious that there is still a lot more work to do.

Post and thumbnail images courtesy of Flickr users Tony Margiocchi and Rosaura Ochoa