The Chaos Theory of Marketing

Last week, I wrote why marketers are struggling with job security. In an effort to provide career counseling to an industry, I would offer this suggestion: start learning about the behaviors of non-linear dynamic systems. You’re going to have to get comfortable with the special conditions that accompany complexity.

Markets are always complex, but there’s a phenomenon that gives them the illusion of predictability. This phenomenon is potential. Potential, in this instance, means the gap between the current market state and a possible future state. The presence of potential creates market demand. Every time a new product is introduced, a new potential gap is created. Supply and demand are knocked out of balance. Until balance is regained, the market becomes more predictable.

Here’s an analogy that makes it a little easier to understand how this potential can impact the behaviors of a complex market. A model that’s often used to explain complexity is to imagine a pool table filled with balls. The twist is that each of these balls is self propelled and can move in any direction at random. Imagine how difficult it would be to predict where any single ball might go.

Now, imagine taking this same pool table and lifting one of the corner legs up 6 inches, introducing the force of gravity as a variable. Individual predictions are still difficult, but you’d be pretty safe in saying that the pocket that was diagonally opposite to the raised leg would eventually collect more than it’s fair share of balls. In this example, gravity plays the role of market potential. The market still behaves in a complex manner but there is a consistent force – the force of gravity – that exerts its influence on that complexity and makes it more predictable.

Marketing is built on exploiting potential – on capitalizing on (or creating) gaps between what we have and what we want. These gaps have always been around, but the nature of them has changed. While this potential was aimed further down Maslow’s hierarchy, it was pretty easy to predict purchasing behaviors. When it comes to the basics – meeting our need of food, water, shelter, safety – humans are all pretty much alike. But when it comes to purchases higher up the hierarchy – at the levels of self-esteem or self-actualization – things become tougher to predict.

Collectively, the western world has moved up Maslow’s hierarchy. A 2011 study from Heritage.org showed that even those living below the poverty line have a standard of life that exceeds those at all but the highest income levels just a few decades before. In 2005, 98.7% of homes had a TV, 84% had air conditioning, 79% has satellite or cable TV and 68% had a personal computer.

But it’s not only the diversification of consumer demand that’s increasing the complexity of markets. The more connected that markets become, the more unpredictable they become. Let’s go back to our overly simplified pool ball analogy. Let’s imagine that not only are our pool balls self-propelled, but they also tend to randomly change direction every time they collide with another ball. The more connected the market, the greater the number of collisions and subsequent direction changes. In marketing, those “collisions” could be a tweet, a review, a Facebook post, a Google search – well – you get the idea. It’s complex.

These two factors; the fragmentation of consumer demand and the complexity of a highly interconnected market, makes predicting consumer behavior a mug’s game. The challenge here is that marketing – in a laudable attempt to become more scientific – is following in science’s footsteps by taking a reductionist path. Our marketing mantra is to reduce everything down to testable variables and there’s certainly nothing wrong with that. I’ve said it myself on many occasions. But, as with science, we must realize that when we’re dealing with dynamic complexity, the whole can be much greater than the sum of its testable parts. There are patterns that can be perceived only at a macro scale. Here there be “black swans.” It’s the old issue of ignoring the global maxima or minima by focusing too closely on the local.

Reduction and testing tends to lead to a feeling of control and predictability. And, in some cases (such as a market that has a common potential) things seem to go pretty much according to plan. But sooner or later, complexity rears its head and those best laid plans blow up in your face.

 

 

How Vision and Strategy Can Kill a Marketer’s Job Security

“Apparently, marketers today are losing confidence in their ability to meet key goals, like reaching the right customers with their marketing efforts, or being able to understand or evaluate the ROI of their marketing plans.”

Dave Morgan – Why Are Marketing Losing Confidence in Their Ability to Do Their Jobs?

“I think marketing is going to be getting much, much easier over the next couple of years.”

Cory Treffiletti – CMOs’ Vision Crucial to their Success

A couple of weeks ago, my fellow Spinners offered these two seemingly contradictory prognoses of the future of marketing. The contradiction, I believe, is in the conflation of the ideas of media buying and marketing. Yes, media buying is going to get easier (or, at least, more automated). And I agree with Cory’s prediction of consolidation in the industry. But that doesn’t do much to ease the crisis of confidence mentioned by Dave Morgan. That’s still very real.

The problem here is one of complexity. Markets are now complex. Actually, they’ve always been complex, but now they’re even more complex and we marketers can no longer pretend that they’re otherwise. When things get complex, our ability to predict outcomes takes a nosedive.

At the same time, an avalanche of available data makes marketers more accountable than ever. This data, along with faster, smarter machines, offers the promise of predictability, but it’s a dangerous illusion. If anything, the data and AI is just revealing more of the complexity that lurks within those markets.

And here is the crux of the dilemma that lives between the two quotes above. Yes, marketing is becoming more powerful, but the markets themselves are becoming more unpredictable. And marketers are squarely caught on the horns of that dilemma. We sign on to deliver results and when those results are no longer predictable, we feel our job security rapidly slipping away.

Cory Treffiletti talks about vision – which also goes by the name of strategy. It sounds good, but here’s the potential problem with that. In massively complex environments, strategy in the wrong hands can become a liability. It leads to an illusion of control, which is part of a largely disproven and outdated corporate mindset. You can blindly follow a strategy right into a dead end because strategies depend on beliefs and beliefs can dramatically alter your perception of what’s real. No one can control a complex environment. The best you can do is monitor and react to that environment. Of course, those two things can – and should – become a strategy in and of themselves.

Strategy is not dead. It can still make a difference. But it needs to be balanced with two other “S’s” – Sense making and Synthesis. These are the things that make a difference in a world of complexity.

You have to make sense of the market. And this is more difficult than it sounds. This is where the “Strategy” paradox can creep up and kill you. If your “Vision” – to use Cory Treffiletti’s term – becomes more important to you than reality, you’ll simply look for things that confirm that vision and plunge ahead, unaware of the true situation. You’ll ignore the cues that are telling you a change of direction may be required. The Sense Making cycle starts with a “frame” of the world (a.k.a. “Vision”) and then looks for external data to either confirm and elaborate or refute that frame/vision. But the data we collect and the way we analyze that data depends on the frame we begin with. Belief tends to make this process a self-reinforcing loop that often leads to disaster. The stronger the “vision,” the greater the tendency for us to delude ourselves.

sensemaking2

Sensemaking: Klein, Moon and Hoffman

If you can remain objective as possible during the sense making cycle you then end up with a reasonably accurate “frame” of your market. This is when the Synthesis part of the equation takes over. Here, you look at your strategy and see how it lines up with the market. You look for new opportunities and threats. Knowing the market is unpredictable, you take the advice of Antifragile author Nassim Nicholas Taleb, minimizing your downside and maximizing your upside. You pull this together into a new iteration of strategy and execute like hell against it. Then you start all over again.

By going through this cycle, you’ll find that you create a wave-like approach to strategy, oscillating through phases of sense making, synthesis and strategic execution. The behavior and mindsets required in each of these phases are significantly – and often diametrically – different. It’s a tough act to pull off.

No wonder marketers are having a tough time right now.

 

 

 

 

 

 

 

Why Can’t Markets be Moral?

Last week, I said there was an emerging market for morality. I painted that particular picture in a somewhat negative light. Andrew Goodman, a fellow Canadian who I have always admired for both his intellect and morality, called me on it (via my Facebook feed): Nice post, but I was hoping for a little more from this.” I paraphrase Andrew’s eloquent and lengthy reply by boiling it down to essentially this: extreme circumstances call for extreme measures and if that has to come from corporations and their advertising, then so be it.

It’s fair to say the last week has done nothing to dispel Goodman’s assessment of the extremity of the situation. Insanity seems to be accelerating at an alarming rate.

But on further reflection, I feel some further clarification needed here. I ascribed morality to markets, not necessarily corporations. There’s an important difference here. Corporations are agents within markets and will follow where markets lead. And increasingly, it looks like there is a market movement towards morality. Morality is becoming more profitable. So let’s look specifically at the morality of the market.

On one hand you could take the position of British economic historian Robert Skidelsky, who said in 2008 that there is an inherent dilemma when one looks for morality in economic markets. This was essentially the point I raised last week:

It has often been claimed that capitalism rewards the qualities of self-restraint, hard work, inventiveness, thrift, and prudence. On the other hand, it crowds out virtues that have no economic utility, like heroism, honour, generosity, and pity.

But let’s say for the moment that Adam Smith’s “Invisible Hand” is solely moved by greed. Does that mean that no good can come from it? New York Times columnist Nicholas Kristof ran a column earlier this year stating that 2017 could be the best year ever. If you can set your cognitive dissonance aside for a moment, here were his reasons:

  • “Since 1990, more than 100 million children’s lives have been saved through vaccinations, breast-feeding promotion, diarrhea treatment and more.”
  • “Every day, an average of about a quarter-million people worldwide graduate from extreme poverty, according to World Bank figures. in the early 1980s, more than 40 percent of all humans were living in extreme poverty. Now fewer than 10 percent are. By 2030 it looks as if just 3 or 4 percent will be.”
  • “While income inequality has increased within the U.S., it has declined on a global level because China and India have lifted hundreds of millions from poverty.”
  • “Some 40 countries are now on track to eliminate elephantiasis. When you’ve seen the anguish caused by elephantiasis — or leprosy, or Guinea worm, or polio, or river blindness, or blinding trachoma — it’s impossible not to feel giddy at the gains registered against all of them.”
  • “85 percent of adults are literate. And almost nothing makes more difference in a society than being able to read and write.”

All these benefits come from the “trickling down” benefits of capitalism. Globalization and the opening of new markets have unleashed a tide that has raised all boats. Kristoff shows what happens when you look at a bigger picture and rely on facts rather than personally held beliefs that come from your own limited perspective. What we forget is that the very first mention Adam Smith made of his “invisible hand” was actually in a text called “The Theory of Moral Sentiments” in 1759. Here was the exact passage:

“The proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest … [Yet] the capacity of his stomach bears no proportion to the immensity of his desires … the rest he will be obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of. The rich…are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.”

In direct contrast to the protectionist policies of the current U.S. administration, the western world (especially the U.S.) is the landlord in this scenario. As much as we may want to rely on our beliefs rather than facts, the average American is better off now they were 50 years ago as measured by almost any empirical baseline you may want to use: lifespan, economic well being, degree of civil freedom, measure of social equality or quality of our environment. And this American free-market drive to get ahead has dragged the whole world in its wake. Again, Robert Skidelsky concedes this point:

“From the ethical point of view, consumption is a means to goodness, and the market system is the most efficient engine for lifting people out of poverty: it is doing so at a prodigious rate in China and India.”

The other potential moral windfall of markets is that there is a second kind of “trickle down” effect that also happens – the driving forward of technology. Technology is a tool that is designed to advance the interests of humans. While there is much in technology that is misapplied to the human condition, we cannot deny that technology continually and consistently makes us better than we were yesterday. As Kristof notes in his column, today 300,000 more people around the world will get electricity for the first time. This will enable access to communication networks, clean water, higher levels of hygiene and many other spin-off benefits. All this happens because corporations see potential profitability in new markets.

But there is another piece to this. If we look only at the “trickle down” effects of capital markets, we have to keep a careful eye on what’s happening at the top of the pyramid. As Skidelsky said in 2008, “But this does not tell us at what point consumption tips us into a bad life.”

 

 

 

 

A Market for Morality

Things are going to get interesting in the world of marketing. And the first indication of that was seen this past Sunday during the Super Bowl. As Bob Garfield noted, there were a lot of subtle and not so subtle undercurrents of messaging in the ads that ran in between the distracting sub-story that played out on the field. Things got downright political with a number of 167 thousand-dollar-a-second ad swipes at the current president and his policies.

I and many others here at Mediapost have been criticized over the past several months for getting political when we should have been talking about media and marketing. But as this weekend showed, we’re naïve to think those two worlds don’t overlap almost completely. And that’s about to become even more true in the future.

Advertising has to talk about what people are talking about. It has always been tied to the zeitgeist of society. And in a politically polarized nation, that means advertising’s “going to go there”. That’s normal. What’s not so normal is this weird topsy-turvy trend of for-profit companies suddenly becoming the moral gatekeepers of America. That’s supposed to be the domain of government and – if you believe in such things – religion. That’s in a normal world. But in the world of 2017 and the minds of 53.9% of America (the percentage of the electorate who didn’t vote for Trump) there is a vast, sucking moral vacuum on at least one of those fronts. It seems that Corporate America is ready to step up and fill the gap.

Suddenly, there is a market for morality. Of course, we have always had “feel-good” advertising and codes of corporate responsibility but this is different – both in volume and tone. It is more overtly political and it plays on perceived juxtaposition of the mores of the nation and the official stance of the government. Markets are built to be nimble and adaptive. Governments are seldom either of these things. Corporate America is sensing a market opportunity by taking the high road and the Super Bowl marked the beginning of what may become a stampede to higher moral ground.

This isn’t the first time this has happened. Around the turn of the last century, we saw the rise of welfare capitalism. In a rapidly expanding industrial market where there was a scarcity of human resources and little legislative regulation of working conditions, corporations became paternalistic. The reasoning was that no one could better provide stability for workers than the corporation that employed them. What is different about the current situation, however, is that this moral evangelism is primarily aimed at the market, not internal operations. We’ll come back to this in a bit.

This creates an interesting dynamic. In a free market economy citizens have the right to vote with their wallets. After a deeply divisive election the debate can continue in a market suddenly divided along political lines. This is compounded by the interconnected and interactive nature of marketing today. We have realized that our market is a complex system and plays by it’s own rules, none of which are predictable. Social network effects, outriding anomalies and viral black swans are now the norm. As I said in an earlier column, branding is becoming a game of hatching “belief worms” – messages designed to bypass rationality and burrow deep into our subconscious values. Our current political climate is a rich breeding ground for said “worms.”

You might say, “What’s wrong with Corporate America taking a moral stand? “

Well..two things.

There is no corporation I’m aware of that has as its first priority the safeguarding of morality. As economist Milt Friedman said, corporations are there to make a profit. Period. And they will always follow the path most likely to lead to that profit. For example, Silicon Valley has been very vocal in its condemnation of the Muslim travel ban not because it’s not right but because it jeopardizes the ability to travel for its employees from Muslim countries. And a century ago, welfare capitalism spread because it helped employers hang on to their employees and gave them a way to keep out unions. Even if morality and profitability happen to share the same bandwagon for a time the minute profitability veers in a new direction, corporations will follow. This is not the motivational environment you want to stake the future on.

Secondly, there is no democratic mandate behind the stated morality of a corporation. There are a lot of CEO’s that have robust ideological beliefs, but it is fair to say the moral proclivities of a corporation are necessarily tied to a very select special interest group: the employees, the customers and the shareholders of that corporation. Companies, by their very nature, should not be expected to speak for “we, the people.” Much as we would like morality to be universally defined, it is still very much a personal matter.

Take just one of these moral stakeholders – the customers. According to Blend, a millennial messaging app, their users loved the Coke, Budweiser and Airbnb ads that all had overt or thinly veiled moral messages. But there was a backlash from Trump supporters asking for boycotts of all these advertisers along with others that got political. The social storms stirred up on both sides were telling. Reaction was quick and emotionally charged. In a world where branding and beliefs are locked together at the hip, we can probably expect that morality and marketing will be similarly conjoined. That means that morality, just like marketing, will be segmented and targeted to very specific groups.

Branding in the Post Truth Age

If 2016 was nothing else – it was a watershed year for the concept of branding. In the previous 12 months, we saw a decoupling in the two elements we have always believed make up brands. As fellow Spinner Cory Treffiletti said recently:

“You have to satisfy the emotional quotient as well as the logical quotient for your brand.  If not, then your brand isn’t balanced, and is likely to fall flat on its face.”

But another Mediapost article highlighted an interesting trend in branding:

“Brands will strive to be ‘meticulously un-designed’ in 2017, according to WPP brand agency Brand Union.”

This, I believe, speaks to where brands are going. And depending on which side of the agency desk you happen to be on, this could either be good news or downright disheartening.

Let’s start with the logical side of branding. In their book Absolute Value, Itamar Simonson and Emanuel Rosen sounded the death knell for brands as a proxy for consumer information. Their premise, which I agree with, is that in a market that is increasingly moving towards perfect information, brands have lost their position of trust. We would rather rely on information that comes from non-marketing sources.

But brands have been aspiring to transcend their logical side for at least 5 decades now. This is the emotional side of branding that Treffiletti speaks of. And here I have to disagree with Simonson and Rosen. This form of branding appears to be very much alive and well, thank you. In fact, in the past year, this form of branding has upped the game considerably.

Brands, at their most potent, embed themselves in our belief systems. It is here, close to our emotional hearts, which mark the Promised Land for brands. Reid Montague’s famous Coke neuro-imaging experiment showed that for Coke drinkers, the brand became part of who they are. Research I was involved in showed that favored brands are positively responded to in a split second, far faster than the rational brain can act. We are hardwired to believe in brands and the more loved the brand, the stronger the reaction. So let’s look at beliefs for a moment.

Not all beliefs are created equal. Our beliefs have an emotional valence – some beliefs are defended more strongly than others. There is a hierarchy of belief defense. At the highest level are our Core beliefs; how we feel about things like politics and religion. Brands are trying to intrude on this core belief space. There has been no better example of this than the brand of Donald Trump.

Beliefs are funny things. From an evolutionary perspective, they’re valuable. They’re mental shortcuts that guide our actions without requiring us to think. They are a type of emotional auto-pilot. But they can also be quite dangerous for the same reason. We defend our beliefs against skeptics – and we defend our core beliefs most vigorously. Ration has nothing to do with it. It is this type of defense system that brands would love to build around themselves.

We like to believe our beliefs are unique to us – but in actual fact, beliefs also materialize out of our social connections. If enough people in our social network believe something is true, so will we. We will even create false memories and narratives to support the fiction. The evolutionary logic is quite simple. Tribes have better odds for survival than individuals, and our tribe will be more successful if we all think the same way about certain things. Beliefs create tribal cohesion.

So, the question is – how does a brand become a belief? It’s this question that possibly points the way in which brands will evolve in the Post-Truth future.

Up to now, brands have always been unilaterally “manufactured” – carefully crafted by agencies as a distillation of marketing messages and delivered to an audience. But now, brands are multilaterally “emergent” – formed through a network of socially connected interactions. All brands are now trying to ride the amplified waves of social media. This means they have to be “meme-worthy” – which really means they have to be both note and share-worthy. To become more amplifiable, brands will become more “jagged,” trying to act as catalysts for going viral. Branding messages will naturally evolve towards outlier extremes in their quest to be noticed and interacted with. Brands are aspiring to become “brain-worms” – wait, that’s not quite right – brands are becoming “belief-worms,” slipping past the rational brain if at all possible to lodge themselves directly in our belief systems. Brands want to be emotional shorthand notations that resonate with our most deeply held core beliefs. We have constructed a narrative of who we are and brands that fit that narrative are adopted and amplified.

It’s this version of branding that seems to be where we’re headed – a socially infectious virus that creates it’s own version of the truth and builds a bulwark of belief to defend itself. Increasingly, branding has nothing to do with rational thought or a quest for absolute value.

The Bermuda Triangle of Advertising

In the past few weeks, via the comments I’ve received on my two (1,2) columns looking at the possible future of media selection and targeting, it’s become apparent to me that we’re at a crisis point when it comes to advertising. I’ve been fortunate enough to have some of the brightest minds and sharpest commentators in the industry contributing their thoughts on the topic. In the middle of all these comments lies a massive gap. This gap can be triangulated by looking at three comments in particular:

Esther Dyson: “Ultimately, what the advertisers want is sales…  attention, engagement…all these are merely indicators for attribution and waypoints on the path to sales.”

Doc Searls: “Please do what you do best (and wins the most awards): make ads that clearly sponsor the content they accompany (we can actually appreciate that), and are sufficiently creative to induce positive regard in our hearts and minds.”

Ken Fadner: “I don’t want to live in a world like this one” (speaking of the hyper targeted advertising scenario I described in my last column).

These three comments are all absolutely right (with the possible exception of Searls, which I’ll come back to in a minute) and they draw a path around the gaping hole that is the future of advertising.

So let’s strip this back to the basics to try to find solid ground from which to move forward again.

Advertising depends on a triangular value exchange: We want entertainment and information – which is delivered via various media. These media need funding – which comes from advertising. Advertising wants exposure to the media audience. So, if we boil that down – we put up with advertising in return for access to entertainment and information. This is the balance that is deemed “OK” by Doc Searls and other commenters

The problem is that this is no longer the world we live in – if we ever did. The value exchange requires all three sides to agree that the value is sufficient for us to keep participating. The relatively benign and balanced model of advertising laid out by Searls just doesn’t exist anymore.

The problem is the value exchange triangle is breaking down on two sides – for advertisers and the audience.

As I explained in an earlier Online Spin, value exchanges depend on scarcity and for the audience, there is no longer a scarcity of information and entertainment. Also, there are now new models for information and entertainment delivery that disrupt our assessment of this value exchange. The cognitive context that made us accepting of commercials has been broken. Where once we sat passively and consumed advertising, we now have subscription contexts that are entirely commercial free. That makes the appearance of advertising all the more frustrating. Our brain has been trained to no longer be accepting of ads. The other issue is that ads only appeared in contexts where we were passively engaged. Now, ads appear when we’re actively engaged. That’s an entirely different mental model with different expectations of acceptability.

This traditional value exchange is also breaking down for advertisers. The inefficiencies of the previous model have been exposed and more accountable and effective models have emerged. Dyson’s point was probably the most constant bearing point we can navigate to – companies want sales. They also want more effective advertising. And much as we may hate the clutter and crap that litters the current digital landscape, when it works well it does promise to deliver a higher degree of efficiency.

So, we have the previous three sided value exchange collapsing on two of the sides, bringing the third side – media- down with it.

Look, we can bitch about digital all we want. I share Searls frustration with digital in general and Fadner’s misgivings about creepy and ineffective execution of digital targeting in particular. But this horse has already left the barn. Digital is more than just the flavor of the month. It’s the thin edge of a massive wedge of change in content distribution and consumption. For reasons far too numerous to name, we’ll never return to the benign world of clearly sponsored content and creative ads. First of all, that benign world never worked that well. Secondly, two sides of the value-exchange triangle have gotten a taste of something better- virtually unlimited content delivered without advertising strings attached and a much more effective way to deliver advertising.

Is digital working very well now? Absolutely not. Fadner and Searls are right about that, It’s creepy, poorly targeted, intrusive and annoying. And it’s all these things for the very same reason that Esther Dyson identified – companies want sales and they’ll try anything that promises to deliver it. But we’re at the very beginning of a huge disruptive wave. Stuff isn’t supposed to work very well at this point. That comes with maturity and an inevitable rebalancing. Searls may rail against digital, just like people railed against television, the telephone and horseless carriages. But it’s just too early to tell what a more mature model will look like. Corporate greed will dictate the trying of everything. We will fight back by blocking the hi-jacking of our attention. A sustainable balance will emerge somewhere in between. But we can’t see it yet from our vantage point.

The Rise of the Audience Marketplace

Far be it from me to let a theme go before it has been thoroughly beaten to the ground. This column has hosted a lot of speculation on the future of advertising and media buying and today, I’ll continue in that theme.

First, let’s return to a column I wrote almost a month ago about the future of advertising. This was a spin-off on a column penned by Gary Milner – The End of Advertising as We Know It. In it, Gary made a prediction: “I see the rise of a global media hub, like a stock exchange, which will become responsible for transacting all digital programmatic buys.”

Gary talked about the possible reversal of fragmentation of markets by channel and geographic area due to the potential centralization of digital media purchasing. But I see it a little differently than Gary. I don’t see the creation of a media hub – or, at least – that wouldn’t be the end goal. Media would simply be the means to the end. I do see the creation of an audience market based on available data. Actually, even an audience would only be the means to an end. Ultimately, we’re buying one thing – attention. Then it’s our job to create engagement.

The Advertising Research Foundation has been struggling with measuring engagement for a long time now. But it’s because they were trying to measure engagement on a channel-by-channel basis and that’s just not how the world works anymore. Take search, for example. Search is highly effective at advertising, but it’s not engaging. It’s a connecting medium. It enables engagement, but it doesn’t deliver it.

We talk multi-channel a lot, but we talk about it like the holy grail. The grail in this cause is an audience that is likely to give us their attention and once they do that – is likely to become engaged with our message. The multi-channel path to this audience is really inconsequential. We only talk about multi-channel now because we’re stopping short of the real goal, connecting with that audience. What advertising needs to do is give us accurate indicators of those two likelihoods: how likely are they to give us their attention and what is their potential proclivity towards our offer. The future of advertising is in assembling audiences – no matter what the channel – that are at a point where they are interested in the message we have to deliver.

This is where the digitization of media becomes interesting. It’s not because it’s aggregating into a single potential buying point – it’s because it’s allowing us to parallel a single prospect along a path of persuasion, getting important feedback data along the way. In this definition, audience isn’t a static snapshot in time. It becomes an evolving, iterative entity. We have always looked at advertising on an exposure-by-exposure basis. But if we start thinking about persuading an audience that paradigm needs to be shifted. We have to think about having the right conversation, regardless of the channel that happens to be in use at the time.

Our concept of media happens to carry a lot of baggage. In our minds, media is inextricably linked to channel. So when we think media, we are really thinking channels. And, if we believe Marshall McLuhan, the medium dictates the message. But while media has undergone intense fragmentation they’ve also become much more measurable and – thereby – more accountable. We know more than ever about who lies on the other side of a digital medium thanks to an ever increasing amount of shared data. That data is what will drive the advertising marketplace of the future. It’s not about media – it’s about audience.

In the market I envision, you would specify your audience requirements. The criteria used would not be so much our typical segmentations – demography or geography for example. These have always just been proxies for what we really care about; their beliefs about our product and predicted buying behaviors. I believe that thanks to ever increasing amounts of data we’re going to make great strides in understanding the psychology of consumerism. These  will be foundational in the audience marketplace of the future. Predictive marketing will become more and more accurate and allow for increasingly precise targeting on a number of behavioral criteria.

Individual channels will become as irrelevant as the manufacturer that supplies the shock absorbers and tie rods in your new BMW. They will simply be grist for the mill in the audience marketplace. Mar-tech and ever smarter algorithms will do the channel selection and media buying in the background. All you’ll care about is the audience you’re targeting, the recommended creative (again, based on the mar-tech running in the background) and the resulting behaviors. Once your audience has been targeted and engaged, the predicted path of persuasion is continually updated and new channels are engaged as required. You won’t care what channels they are – you’ll simply monitor the progression of persuasion.