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Advertising in the Spime World

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Last week we analyzed a few popular ad networks, or more accurately display advertising services, their traffic patterns and underlying technologies. With its automatic bidding systems, arbitration and fierce competition between fraudsters and fraud detectors it reminds me of the fashion business, with ever-changing, complicated earning schemes and high risk operations.

The scene has already started to change, as more and more processing power is used to analyze actual text, images and video into which ads are placed. However, most ads still make users annoyed, especially when they’re introduced after running a service (like YouTube) without ads for quite some time.

Metrics have also evolved from simple clicks to e.g. impressions per minute, which are increasingly difficult to be quantified as service providers use different terminologies. Furthermore, most of these services are readily available in the web, which has made traditional ad agency business prone to consolidation due to diminishing margins. Hollywood-type ad firms may already be history.

I believe that the spime world has a profound effect on advertising in general. When most products become digital services with optional physical manifestations, there will be far less space for traditional advertising. As the service provider maintains a continuous connection with the customer, ads will be replaced with highly customized and evolving, friendly consulting. Brand marketing most likely survives, but even that becomes more subtle, reputation being at the center stage.

The money currently spent to common advertising will most likely flow to continuous service improvement and customer trust management in the future. With spimes, these will be real time, not based on surveys or market research of today. Social media has shown us a prelude, but a sea change will be driven by spimes.

I’m looking forward to trying out these spime socks presented at CES 2015, just like I wrote in 2013.

//Pasi

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