The sounds from the street below indicate that widows and orphans are caught in a house fire while outside their door a mugger is being apprehended and the victims of a bus crash are being taken to hospital by ambulance.  But actually none of these things are happening in this part of Manhattan: I am back in a New York hotel room accompanied by the normal night serenade of this great city.

In between the serenade, I wanted to keep thinking along the ” Is advertising still the future?” theme that I have been pursuing for the last month or so.  Earlier this year Chuck Richard at Outsell drew our attention to Demand Media as a future model, and I was delighted to be able to introduce its CEO, Shawn Colo, at the Outsell Signature Event in Ireland in October.  The idea that players like Demand create community and also take market share from content and media players is an attractive one.  Advertising agencies, media sales operations and content vendors will all have to give way if hybrids like this work – and they will work, as so often on the web, not by disintermediating the real world business cycle, but by “re-intermediating ” it online.

And then, at the Noah Conference, I heard Patrick Meininger, the VP of Business Development at Adconium, describe how the company had survived the “nuclear winter of advertising “.  The answer is very well, judging by its refunding (Index Ventures, Wellington Partners) and by recent announcements.  Adconium now claims to be the largest independent global audience and content network from a 2005 start-up position, and despite its locations, is strong in Europe (and getting stronger as a deal with Goldbach positions the business for Eastern Europe).  The purchase of part of Joost gets Adconium more into video, RedLever provides studio capacity (see the Demand example for a parallel),  and Frontline places the business for direct marketing.  So put lead gen, behavioural/psychographic/demographic analysis, cross media optimization, and a top level sales force of 85 to do the things that ad agencies never quite managed in the digital world  into a box, shake it around a bit, and out comes a company fit to operate a new model.  It has over €100m in revenue, is said to be profitable, and despite cutting its work force at the back end of last year seems to have come through the nuclear winter unscathed, with 309 million ad impressions a day and 322 million unique users per month.

So what does this mean for the Death of Advertising theme?  Only that new players like Adconium and Demand will create a marketplace in which advertising is about relationships in a community, where people will either want to be sold things that they require in a community context, or be willing to sell their identity for gain.  Huge expertise in placement and a great deal of trusted customer knowlege will be needed to make this work – and when it does we won’t call it advertising at all.  The losers will be ad agencies  and media buyers (which of these two will WPP or Zenith buy?) , and of course content producers, who will become increasingly powerless to maximize their audience advantage because they did not move sharply enough in the years 2002-2006 to identify their brands with communities and understand the new way in which network relationships work .

The widows and orphans appear to have been rescued now, so time to sleep.  It really is very tiring sitting in an airliner all day …


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3 Comments so far

  1. Dan Waldron on December 9, 2009 03:16

    Hi. I read a few of your other posts and wanted to know if you would be interested in exchanging blogroll links?

  2. Ben Waugh on December 9, 2009 03:27

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  3. Ben Waugh on December 9, 2009 03:54

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