In the coming year, agencies and clients must begin the process of adjusting to two converging trends in our new marketing landscape. The first is the shift in content delivery. The shift in content from analog to digital is largely completed. The digitization of content changes the media-driven analog model in its entirety, leaving us in an on-demand world of ubiquitous content. Just consider the ways in which we get news today. The same stories on CNN's Headline News are accessible as video clips on CNN.com and on your cell phone via Verizon Wireless' VCast service, and as podcasts, SMS and RSS feeds and perhaps even in the elevator of your office building through a feed to an LCD monitor. CNN's competitors are delivering content across the same multiple modes, Google News is aggregating thousands of news sources into a single destination, and millions of blog entries focus on even narrower topics of interest.
The shift from scheduled analog media to ubiquitous on-demand content is so dramatic, it's hard to wrap one's mind around it. The marketing and communications possibilities are nearly endless. Yet our industry worries incessantly about how to replace the reach and frequency of the old mass-media content model. The future, in my opinion, will not be about reach and frequency but about ubiquity of on-demand content, delivered across as many modes as we care to imagine and received by audiences that truly care about it.
Which brings up the second trend: the narrowcasting of information. The mass-media model may have efficiently delivered reach and frequency, but it was entirely inefficient about targeting the right customers at the right time. The on-demand model maps content delivery to content desire seamlessly, which is why Google is worth as much as Time Warner and Disney combined. For example, the number of people in the market for a new car at any given time is a fraction of the population, yet in the mass-marketing era, the auto industry spent more than the national GDP of a small nation to reach them. In the on-demand world, customers in the market for cars simply go on the Internet (Google being the most popular starting point) and begin their process of consideration. The amount of content available to them would take up an entire library if printed out or fill several months' worth of TV time.
In the mass era, entire annual ad budgets yielded a handful of 30-second TV spots and print ads. In the on-demand era, we can narrowcast hours upon hours and pages upon pages of deeper content to the relatively small group of customers who actually want—and need—to receive it. Wired has dubbed this the "Long Tail" theory—that digitization actually makes it both possible and affordable to target smaller and smaller segments with more and more content. The impact of Long Tail trends will change our industry entirely.
We had better get ready—and fast. The ad industry continues to operate inside a production model developed during the analog era. On average, a marketer will spend $10,000 to $20,000 per second for a TV commercial that originates in film and ultimately yields just 30 seconds of digital content (at an average total cost of $300,000 to $600,000). At $10,000 per second, how will we fill the hours of time that the on-demand world is enabling us to deliver and that our customers will soon demand? The cost of delivering several hours' worth of content via the Web to a hand-raising prospect is so close to zero that it's barely worth measuring (based on the current prices for bandwidth). But the cost of producing those hours of content in the old model would put it on par with a feature-film project.
So everything is digital, yet we continue to operate in an analog world that is not just an anachronism but a downright competitive disadvantage. Today's broadband Web sites offer hours of video content, animation, games, product demos, audio clips, photography, text and nearly any other format that can be digitized (see NikeGridiron.com, for example). In the near future, marketers will be offered their own on-demand channels on digital cable and on mobile networks. Digital set-top boxes enable the viewing of Web-based video clips through a TV set. Anything digital, everywhere at once—and no production solution to feed our content-hungry audiences.
Interactive agencies, which have been producing their own content since the early days of the Web, are one place to look for a model that works. I believe that digital production will replace film and will increasingly move in-house at agencies. One reason is efficiency. Developing multichannel solutions that deliver ubiquitous content is simply too complicated to entrust to a third party. But the other reason is simply ability: We do it because we can. Digitization of production demystifies and democratizes the process of content creation, so we can make far more for far less, all while creating a new revenue stream for agencies.
So 2006 will be a year when clients and agencies must rethink both the information needs of their target audiences and the production models used to create content. Once again, we face change. But this change will be good for both sides, by sweeping aside the remaining inefficiencies of the analog era.