In the not too distant future, marketers hope to track a consumer’s every move.
Electronic advertisements for a retailer could pop up on a smartphone as a shopper passes its store or display.
Many ad agencies anticipate being able to communicate directly with consumers in the next three to five years. They say advertisers will be able to track potential buyers through GPS-like services provided by companies such as New York-
based Foursquare Labs Inc. and Texas-based Gowalla Inc., which allow consumers to publicly update their locations in real time via mobile phones and other devices.
The advertising industry already has undergone big changes in the past two years with the rise of social media
advertising and the proliferation of smartphones.
It has gone from an industry that primarily focused on television and radio ads to one that launches campaigns using dozens of ways to interact with consumers.
“The technology is progressing so fast with what opportunities and applications are appearing out there,” said Jim Harrington, president of Newport Beach-based O’Leary and Partners. “Agencies now have the ability to reach out and interact with a customer through dozens of channels.”
Twitter, Facebook
In the past 12 months, thousands of companies have launched Facebook accounts and started Twitter pages to be part of social networking, though it remains a largely unproven source of marketing.
Many disagree on the staying power of some social networking sites.
“We are going to see that Twitter as a
medium becomes less and less relevant very quickly,” Harrington said. “It has certain value for certain clients, particular retailers, but for most it’s a disposable conversation.”
Some even are seeing Facebook’s popularity waning as the technology has grown rapidly and new networks vie for consumers’ attention.
“Younger folk are going to leave and fragment into other communities, because the worst thing that you can do as a teenager or young adult is go into a night club and see your parents there,” Harrington said. “Facebook is still going to be useful for marketing, but not be the be all and end all everyone originally predicted.”
As social networking fragments, marketers could be able to cater directly
to smaller groups of enthusiastic follow-ers.
“You’re going to see competitors with smaller online communities because the youth of today communicate and thrive in these online communities, which will be both harder and easier for advertisers to target,” Har-rington said.
The rise of location-based social networks could provide advertisers with valuable information. If a consumer updates his or her location as near a shopping center, retailers could send coupons for nearby stores directly to his or her phone.
“We’re talking to a lot of companies out there that are developing these products that will figure out who you are when you walk into the store and deliver a coupon to your cell phone when you walk past a display,” Harrington said. “It would be a kind of opt-in type of thing currently.”
Some marketers are looking beyond that.
Facebook games that send consumers on scavenger hunts or require them to do other tasks in exchange for coupons and deals could hit the site in the next few months.
“We’re excited about the potential for location-based platforms such as Foursquare and Gowalla,” said Tim Blett, president at the Newport Beach office of Southfield, Mich.-based Doner Co. “They offer high levels of engagement and the possibility to create a multiplier effect in the Facebook environment.”
Advertisers could, say, organize a game on Facebook where consumers visit various filming locations of a movie they’re interested in and then receive access to a sale at Macy’s, Blett said.
Most agencies expect something akin to the iPhone becoming the key object for marketers to target.
“It’s all going to come down to some device that we carry around that won’t be a laptop or cell phone, but everything included,” said Dan Olson, western region managing director at the Irvine office of New York-based Wunderman, part of New York-based Young & Rubicam Inc. “Big brother is now here to stay.”
Money?
With smartphones and social media, marketers have a lot more access to consumers, but the question is: How do advertisers make money from that access?
“You can’t give it away for free so it’s a matter of figuring out what you pay and charge for these things,” O’Leary’s Harrington said.
The same issues apply for traditional print media.
Magazines and newspapers are struggling with figuring out a fair price to charge advertisers when stories are published online or on devices such as Apple Inc.’s iPad or Amazon.com Inc.’s Kindle.
“The people who own the distribution channels are going to want to control that, but they are faced with a lot of unknowns,” Olson said.
Even with the growth of technology, many believe that advertising’s truisms will never fade.
“Most of the old rules still hold true,” said Sean Hardwick, senior vice president at the Irvine office of Chicago-
based DraftFCB. “Know your audience, know what you want to achieve and figure out a creative way to get them to think that.”
