Esther Dyson on the New Advertising Age

17 05 2009

Advertising is of interest to everyone, not just marketers. After all, it’s advertising that pays for much of the content that many of us see (including this newspaper). But it also tells us about new products and spurs companies to improve their products and services. Of course, there’s good advertising and bad advertising (and good and bad products).

Fortunately, advertising will (and must) change in a way that will accentuate the good and reduce the bad – because advertisers will increasingly need consumers’ help in getting the word out, and consumers won’t support bad products. (That’s a slightly Utopian overstatement, but there is some truth in it.)

Of course, sometimes I have a hard time explaining what I mean when I say that advertising must change. It needs to move from sending “messages” to passive consumers to sponsorship, product placement and conversations with active consumers. The traditional skills of advertising will give way to those of public relations.

Advertisers often look at me with a blank expression when I try to explain this.

So I use metaphors: imagine you sell sports shoes (are you listening, Nike?). You’re not going to intrude on people having dinner in a restaurant, but you might well show up at a ball game, handing out free sneakers to the coolest-looking kids and joining in the festive atmosphere. Or think of all the marketers whose brands are popular: people actually pay to wear their branded T-shirts – especially if the marketer is sponsoring a cause they believe in.

Now I have a practical example. Last week, I met Suzanne Xie, a recent graduate in economics from the University of Chicago. Her parents, Chinese immigrants, were engineers, and they encouraged her to go into a safe, prestigious career, so she joined a New York investment bank after graduation. But little more than a year later, just before the financial meltdown, she and co-founder Richard Tong took an even riskier route – a start-up.

They recently moved from New York to Palo Alto, California, to see if they could make a go of their start-up idea – a style-oriented photo-sharing site with a twist. But just shoving some ads and affiliate links onto the page didn’t make much sense to these 24-year-olds, so they applied a little bit of business-model smarts rather than technical innovation, and looked for ways to involve clothing vendors in their community.

Thus was born Weardrobe. Call it Netflix-meets-fashion-show-meets-Flickr: Young women post photos of themselves and their “looks” and get style inspiration from others. It’s real people wearing real clothing. The most influential users get a direct line to the brands, and starting next week will be able to borrow the latest fashion releases from the Weardrobe closet. Some vendors, such as American Apparel, have already seen the value of their clothes being modeled by real people, and have started showcasing their products by linking to photos of Weardrobe users.

In a few weeks, Xie and Tong hope to announce a retail partnership. The most trusted and active members will get to borrow, wear, and pose in clothing from this brand. The sooner they return the items, they sooner they get a new item.   Of course, this will add complexity and logistical challenges to the business, but it’s also likely to add revenue to the bottom line.

And for brands, it’s an opportunity to place product directly in the hands of fashion influencers. Product placement has traditionally been seen as a way to get celebrities and models to wear branded clothing, but Weardrobe believes in the power of what Xie calls “micro product placement.”  She says, “This sort of micro product placement takes the success of Dove’s Campaign for Real Beauty a step further, allowing clothing companies to reach young women whom others follow. Imagine having a bunch of real girls who like a brand so much that they wear and style it for free!”

And, of course, aspiring models and stylists will see Weardrobe as a place to be discovered (just as MySpace and YouTube have become such places for performers).

My point here is not to predict Weardrobe’s success, but to show the kind of creativity and experimentation that makes California such a great place to visit after six months in Russia and a week in New York.

Each marketer needs to think of a message and a platform appropriate to its niche.

Financial firms are sponsoring sites such as Wesabe and Mint.com, where users supply their own financial data and get relevant, extremely targeted advice from vendors. RealAge does the same for consumers. Its advertising base is a little heavy on vitamin supplements, since pharmaceutical companies are extremely constrained in how they can advertise.

And it needn’t be just online. The companies that are sponsoring power outlets in airports are another example of this kind of creativity. They are sponsoring something of value and something relevant to their core customer base.  Meetup (I should disclose that I am on its board) is a company that lets marketers sponsor face-to-face get-togethers of like-minded people: Huggies (diapers) sponsors stay-at-home Meetups and offers free diapers; American Express sponsors small-business Meetups and helps covers members’ fees.

Of course, it’s neither easy nor obvious.  Advertisers are looking for one big idea. But that’s the point. Media are fragmenting, and so are advertising and marketing platforms.  Advertisers will need to work harder to get the attention of their core audience.  What they still don’t understand is that consumers don’t want just to give attention; they want to get attention. In these new communities sponsored by brands, it’s possible for them to get attention from other members while reflecting a little glory onto the brands that sponsor them.

Esther Dyson, chairman of EDventure Holdings, is an active investor in a variety of start-ups around the world.  Her interests include information technology, health care and private aviation and space travel.

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16 06 2009
GarykPatton

How soon will you update your blog? I’m interested in reading some more information on this issue.

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