Trends Report: Saturation
I’m flying back to the East Coast via Chicago and realizing there is nothing more beautiful than a lightning storm this high up. I’m crammed into a small plane and the air condition doesn’t work. The seats beside me are occupied by a family with a young girl watching a cartoon DVD on a portable player. The young man behind me has his cd player on an unhealthy volume and I can hear the treble of the music. The elderly man directly in front of me immediately reclined his seat to the furthest position it could go when we hit cruising altitude. At this point, the last place I want to be is on this plane. From my window seat I can see the sparsely populated area on the ground and it appears serene and peaceful. This plane is saturated. It is saturated with people, the smell of airport fast food, stale airplane air, sounds of children and phantom music and conversations. The pilot just dinged the seatbelt sign and warned us of “choppy air.” I’m not sure what that means but it doesn’t sound fun.
I imagine many of you who attended AdTech are in my exact position flying back to your homes. The saturation of this flight reminds me of the current consumer experience that our industry faces in 2004. The industry is like a full flight packed with loud and reclining passengers who aren’t wholly considerate of one another but focused only on their immediate situation. The email market, once the savior of online marketing to many, has been ransacked by barbarians invading for quick loot. Inventory faces critical mass as regulations and external market forces such as ISP and consumer pressure continues to force limitations on commercial messages online. Pricing is therefore held at an artificial pricing curve and threatens many in both the CPA and CPM markets who rely on the shoulders of media buyers with limited budgets. 2004 presents a patch of “choppy air” for these three components of our industry and will ultimately determine how we do business with one another and consumers.
Email still has a bright future. According to published reports by researchers, consumers still prefer to receive email as a form of communication from businesses by a very wide margin over postal and especially over telemarketing. In one form or another, there is no doubt that the medium will survive and do well. However, the large question is in what form is it most viable and the least corruptible by things such as spam and bulk mail abuses that result in saturation. In general, advertisements are becoming little more than cultural artifacts and pop-art. The pop-art of Andy Warhol and Roy Liechtenstein made advertisements sacred by importing new meanings of cultural signification. But in doing so, Brillo Boxes and Campbell Soup ads meant less as a mode of selling and more as a mode of art. Once an object becomes art, it is freighted with an entirely different meaning than its original purpose. This is entirely legitimate, but it means that advertising looses its ability to sell commodities and instead points to other cultural signifiers of material consumption. Walk through any airport or mall and notice how the pastiche of ads do little to actually drive sales, but instead becomes background decoration and artwork. Branding is important, but there is a fine line. In much the same way, email is quickly loosing its grip as a communicable vehicle to drive consumer action. Aside from the continuing rise of email readers who delete instead of read, there are growing numbers who have stopped thinking of commercial mail all-together and view it as a part of the internet experience. Commercial mail has even taken on a comedic edge in jokes on late night TV and by modern artists who meld commercial mailings together to form strange poems.
This is dangerous for open rates, but it is even more dangerous for the future of commercial email as a viable communication vehicle worthy of media spending. Of course the culprit is saturation. As a result of our actions, your next email campaign teeters on the brink of becoming a future exhibit in the Museum of Modern Art rather than a source of ROI or ROAS.
Related is the concurrent saturation of inventory in the industry. As a former media buyer who still has many friends doing media buys, I know first hand how difficult the job of supplying affordable, reliable and legit media for a campaign can become. It is not a job for the weak at heart. Why is it so hard today? Saturation. As an industry, we’ve cannibalized our inventory out of the game. Not enough attention was, or is, placed on generating new data and media that is not only sufficient for the ever increasing demand, but also credible enough to appeal to brand-conscious media buys. Resultingly, the saturation has meant that the space has a self imposed glass ceiling keeping it from attracting new media and new players with large budgets. It is a vicious cycle and will take a dynamic paradigm shift in how we think about acquiring and handling consumer data to solve.
Lastly, and related to the email and inventory saturation, is the continued results of artificial pricing curves keeping the price of media. I’ve hit on this subject before in Trends Report, but it is important to consider the ramifications of what such an artificial curve means to a saturated marketplace. Specifically, will the industry out price the CPA model for most advertisers and publishers? As CPM rates continue to rise along the artificial curve, and media buyers continue to seek new media in a self imposed limited market sector, how will CPA survive? Of course, the answer is not easy, if available at all. It lies in the murky realm of figuring out a way to do CPA in the most optimized manner. Some sector companies are already doing this and the results are strong for themselves and their partners. These are the companies with long term viability who will keep the barbarians at the gate and who you should partner with for the long term.
Consequently, my plane is finally landing and it has been a stomach churning and bumpy flight. Hopefully, the industry will fare saturation better in 2004 than my jet-lagged body just did.
Sam Harrelson is the Co-Editor of the Digital Moses Confidential. He can be reached at [email protected]
