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In the post-war era, corporate stewardship reigned. CEOs colluded to ensure high prices and profit margins so that unionized labor could be well remunerated. CEOs participated in the highest levels of the government and for a while all was well. 3 television stations developed and the quintessentially suburban family was marketed to in their white picket fenced homes with a Chevy in the driveway in a mass and universal way. It was American to have your advertisements like the color of your Model T in 1908: in black. If you want to know more about this epoch, read Robert Reich’s phenomenal book, SuperCapitalism.

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Fast forward a few decades and the world has changed dramatically. It’s the 1980s and the Japanese invented Just-in-Time inventory and implemented the Toyota Production System (TPS) to get you exactly the Tercel you’ve been dreaming about in less than 4 weeks, much less than the 6-9 months you’ll have to wait for the Chevy factory to finish its Chevelle runs and resume Corvettes. The beginning of the mass-market customization revolution had begun. MTV launched the first music television network to the tune of “Video killed the Radio Star” and enabled a new generation of marketers to begin developing proprietary advertisements for smaller subsets of the mass media audience. From that point forward, there was no going back to white picket fences in Pleasantville.

Jump 20 more years into the future and the internet has exploded the number of subsets of mass media audience. Going even further, the internet enables marketers to achieve something never before possible: developing and delivering advertisements customized for individuals, instantly (just-in-time advertising). To do this, publishers and ad servers supply data about users via cookies, either through match coding, cookie exchanges or the like.

Despite the unleashing of an entirely new and exciting way to market, there are several barriers to adoptions before the advertising kanbans can get going full steam. Shifting to a new medium from the old requires learning some new technologies and unlearning some old ones, while shifting from the old to the new. After all, the fundamental principle underlying TPS is kaizen, or “consistent evolution”. Those suppliers weren’t born ready to give Toyota the parts it needed when it needed them.

In the same way, marketers are evolving to learn how to supply publishers and users with just in time advertising. The particular barriers they have to deal with are:

  • Understanding how to develop advertisements that maximize the benefit of these new technologies; not just taking what worked in the old model and plugging it into the new one
  • Developing campaigns that achieve similar levels of reach they are accustomed to on older forms of media (mostly tv)
  • Reconciling and integrating the old and new media campaigns

Marketers aren’t going to simply dive into the pool of just-in-time ads and leave the old media behind. They are going to need some intermediate steps to get there, like the following listed in relatively increasing order of customization

  • Contextual and keyword targeting: Google AdWords and AdSense. Show me ads relevant to the content that I’m reading or asking to find.
  • Social media and conversation management, think FacebookMySpace or Twitter commercial profiles. We’re saying “Marketer, I like your product. Talk to me about it. Tell me when the new version is coming out or share with me a neat video about candy and cola.”
  • Dynamically created display ads from TumriTeracent or others fed by data coming from cookie exchanges like BlueKai. Show me an ad which you’ve constructed from a small set of images and offers that might be relevant to me and a few thousand other opeople
  • Self-selection of advertisements : Bill Gurley mentioned this methodology in his blog a few weeks back for Hulu . Companies like Oodle and SocialVibe also follow this model for classifieds and social networking respectively. By offering a variety of sponsors, users are electing the kind of advertisement they want to receive, a shift and one further step towards personalization.

While we aren’t yet at the optimal point for individualized marketing, we are well on our way.

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