Cumulative Advantage: Why Marketing Strategy is Dynamic

NYT has a short article about Cumulative Advantage, which is essentially the effect that occurs in a networked world where a moderately successful item (song, book, Web site, YouTube video) begins to become extremely successful, very quickly, pulling away from highly similar items of equal intrinsic quality.

whew.

Essentially, this is why you are more compelled to watch a video that 1 million people
have seen, as opposed to one that only 5 have seen. You (we) are drawn to things that others have deemed to be good. This is one of the mechanics of word of mouth, and something that clearly sets us up--as marketing strategists--to think of the world in highly dynamic terms.

Past (broadcast world) strategy had more to do with trying to figure out what would work and running it. You'd see if it did work, and try to learn from success and failure. Today, that is myopic and lazy. Today, we live inside of a highly-connected world where there is data, data and more data.

This is the opportunity that we have today. Everything is a living lab, where we can watch our target markets operate in very-close to real time, with stacks of algorithms at the ready. We need to continue to operate in a living way. Running a marketing program is more about optimization today than it is about initial insight. It is about flexibility and the ability to think quickly and recognize patterns as they begin to emerge.

Google and DoubleClick: Match Made in (Data) Heaven

So, Google gets DoubleClick. What does that mean?

Well, first off, it definitely cements the notion that online advertising is Google and vice-versa. Google controls 60% of search, so they touch all of those ads. I don't know if anyone's clear about the reach of AdSense, but it's pretty big, especially down at the lower end of the tail with small publishers and bloggers. Now, everyone that uses DART is going to have their data pass through a Google server.

Certainly that represents a pretty significant chunk of a big and growing market. But what is even more interesting is the way that Google uses the things it buys. That is, they want the marketshare, of course. But they also want the technology and (more importantly) the way that people use the technology.

I wrote in ClickZ a week or so back about the concept of Adverting by Robots. The idea being that computer scientists are increasingly becoming interested in advertising, but they are approaching it as a math, and not a creative challenge.

The thing that they need, of course, is data about what ads are effective and under what conditions. The DART system is able to catch a lot of that. That great big data set is now going to be available to the Google engineers and their magic algorithms.

Owning the Means of Production: Brands do Content

MarketingVox is linking to a story in USAToday about brands creating their own content. There's definitely nothing new about this concept. P&G used to own (and still might..I'd have to check) soap operas. That is, they were created by P&G Studios and the P&G owned the rights to them.

You can definitely see how the idea has gained so much favor, and it is really the long-term fallout from the Internet revolution. When we started advertising online, we realized that the ad had to be interesting and valuable in its own right. So, naturally, the ads started to evolve into content.

The question then becomes, how far can this go? Well, in the USA Today story, to the extreme, where the content is compelling enough to capture interest for a full 30 minutes.

Ad about how great newspapers are won't go away

You know, I actually sort of like this campaign from the Newspaper Association, touting the power of newspapers.

But this morning, the ad just opened up, covering about half of adage.com with no apparent way to close the stinking thing!

It's even covering up an article on ad clutter!

Free 411....of course

Another day, another great big disruption to someone's revenue stream. Google announces free 411 directory assistance. And...they do it better.

411 is a joke (to paraphrase Public Enemy). Why do you have to a) pay for this? and b) pay so much? Plus, I hate the fact that they connect you directly to the listing, but you have no record of the number. So, if you get a busy signal or need to call back? On to 411 again. A bad, overpriced system. Definitely needing shaking up.

Google's new experiment not only is free, but it allows you to get a text message of the business information. How great is that? And how happy are businesses going to be about that? This is a market that has been sitting like a ripe apple for a long time and its good to see it plucked.

The Growth of Ad Auctions

The idea of an online auction has been around for a good, long time. The idea makes a lot of sense: a ton of ad space is either undervalued or unsold, simply because it too frequently, the process of selling involves people, and people are focusing on buys that are bigger and more interesting than just a bunch of banners scattered across a network.

Or...we realize that ad space has a temporal element to it: if someone doesn't buy the home page at 4:00 on a Saturday, that impression is gone, along with any potential value, just like a hotel room.

But we've got two big stories this week around auctions: Google is doing it with TV and DoubleClick is doing it online. It's a pretty amazing step forward, and one that could potentially change much of the dynamic of buying ad space. The planning portion is going to be a challenge, of course. That is, where CPMs were previously some combination of rate card times relationship, we'll now just get pure market-based pricing.

The big thing to see, of course, is the quality of the inventory that is posted up. That will determine much about whether buyers will see auctions as a way to backfill buys to hit reach and frequency goals, or if they will actively engage as a method of getting high-value placements.