I launched a regular column in Digital Media magazine (published by Reed Business Australia) this year. Below is an early draft of my first column (which was published in the February issue).
A string of 2007 research studies into changing digital media and entertainment consumption habits, including the persuasive survey by the IBM Institute for Strategic Value titled The End of Advertising as We Know It, demonstrated that audiences have gained even greater control over their media consumption.
This position will become entrenched in 2008. The more responsive digital media players will introduce services that further enable audiences to access digital content on their terms, which will stimulate audience appetite for control. Early examples include iGoogle, the increasing ‘widgetisation’ of the Web, and Tivo’s move to allow viewers to access Web-based video content.
Increased audience control has as its corollary increased filtering of ads. Impatience with irrelevant advertising content will become more marked. Audiences are already embracing tools and services – from ad blockers to P2P networks – that allow them to consume content with fewer irrelevant commercial messages.
This will not lead to the kind of advertising implosion witnessed earlier this decade, because the business case for online advertising remains solid. Audiences are not rejecting all advertising, only irrelevant advertising. They recognise that the presence of advertising subsidises the cost of content (in many cases, making it ‘cost free’ to them) and are willing to accept advertising as a necessary trade off.
However, they will increasingly reject non-targeted advertising as a sign of disrespect and a failure on the part of advertisers to appreciate the value of their attention (more on this shortly).
Social Networking goes off the boil
The exponential growth in social networking activity witnessed in 2007 is not sustainable. There will be both a reduction in activity and the beginnings of a widespread migration away from the current market leaders.
The very human desire for belongingness will remain as strong as ever. However, ‘community fatigue’ will set in as individuals’ tire of the social-networking-as-a-game metaphor (where the highest number of friends/links wins). They will seek instead tools that simplify the process of connecting, organising and creating meaning from true, trust-based relationships – online and off.
Community Is A Commodity
The mainstream market has witnessed the commoditisation of social interaction toolsets, which has led to a proliferation of special interest social networking sites. In 2008, social networking’s focus will shift from the technology platform to brand messaging. An early example of this trend is Kylie Minogue’s social networking site – KylieKonnect.
Around the edges, we will start to see devolution of control over relationship data and interactions into the hands of individuals. While branded sites will provide an anchor for initiating relationships, the current ‘walled garden’ approach will erode. Initiatives like Google’s Open Social will fuse with open source identity management tools such as OpenID. The result will be tools that empower individuals to interact with all of their friends, regardless of the specific social network site they use, via a single interface.
This trend will enflame existing tensions over the level and type of advertising interjected into social interactions and the (often involuntary) disclosure of personal information. The failure of Facebook’s ‘Beacon’ advertising program reflects growing unease concerning the blurring of ‘public’ and ‘private’ domains within social networking sites. Expect further skirmishes, as individuals attempt to reclaim control over their relationships.
Redefining Media’s Currency
Despite natural advantages in audience measurement, the digital media industry will remain unable to value audiences.
After struggling with evolving methodologies that largely replicated the clumsy ‘reach and frequency’ paradigm of traditional media, it is unlikely that a universally agreed metric for audience engagement (and, in turn, value) will emerge in 2008.
However, several themes will surface:
(i) The channel via which the content is consumed is more relevant than the medium via which it is delivered;
(ii) The consumption context is more relevant than the channel;
(iii) Algorithmic differentiation between higher and lower value audience members is possible;
(iv) The level of trust between the individual and content brand is a significant determinant of engagement and therefore value.
Individuals will increasingly regard their attention as a valuable ‘currency’, and expect a less lop-sided value exchange when they ‘spend’ this currency. Regardless of the proposed valuation metric, it is clear audiences themselves will expect a say.