The Future of Advertising?

Posted on May 11, 2011

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Over the last week I’ve noticed two interesting developments that could have long-term effects on advertising driven media.

Or they may just fade away. I’m really not sure which.

Regardless they are certainly food for thought, especially for creative people who are good at generating content.

The first is paying people to watch ads.

Facebook recently announced plans to begin giving incentives to people for watching certain ads. The reward will be virtual credits that, initially, can be redeemed for virtual goods inside many of the sites popular games.

However, since Facebook also announced a new Groupon-style Deal of the Day service eventually these rewards could conceivably be used to purchase the discount offers which, in effect, would give the credits actual monetary value.

This seemed like just a noble experiment until I saw an article in AdWeek about a company called AdGenesis that is paying pre-screened consumers for watching ads. Like Facebook most of the rewards  will be non-monetary; coupons, branded swag or sweepstakes entries. However the platform is heading toward offering credits that will be redeemable for actual goods through the Web site.

There are plenty of pros and cons to this approach. A Fast Company article points out that paying people to do something they have previously done for free can set a dangerous precedent. You run the risk of people becoming unwilling to watch ads without being paid which could be a problem for the advertising industry.

The next notable item that could be signal a new model for advertising or might mean nothing at all is an announcement from NBC Universal that it has renewed the series In Gayle We Trust for a third season.

Don’t feel bad if you’ve never heard of it and no, it wasn’t a late-season replacement for the Paul Reiser Show. It’s a web-only series about Gayle Evans, an American Family Insurance agent in a fictional city called Maple Grove. The show centers around her relationships with her various unique clients living in the city.

In case you hadn’t guessed, the series is sponsored by American Family Insurance. It’s essentially a soap opera.

Not a soap opera as in overly dramatic actors portraying characters with wildly intertwined lives filled with affairs, backstabbing and deceit. 

I mean a soap opera in that the genre got its name because originally the shows each had a single sponsor; usually a brand of soap that wanted to market their product to housewives who watched television during the day.

So this approach certainly isn’t new and there have been periodic efforts to revive it with mixed results. What’s different now though, is the cost of producing and distributing a web-only series. It’s a lot easier and less expensive today than it used to be.

The key is you have to build enough of an audience to make it worthwhile. Since NBC Universal and American Family Insurance are on their third season, I imagine someone must be watching. 

As you might have guessed from the tone of this post, I’m not sure what to make of these two initiatives. I definitely thing each bears watching for anyone making their living in a business based on advertising revenue.

Beyond that, I’m curious what you think. If you have thoughts about the potential of either of these new advertising models please, post a comment or send me a note.

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