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Are Computers the Best Predictors of What People Want?

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It turns out that human beings are making advertising more complicated than ever before.

Opinions, ideas, creativity and more have become the battlegrounds in the war to figure out who is the better advertiser: human beings or robots? Think this is a scene out of some Mad Magazine parody that mixes The Terminator with Mad Men? It isn't.

For years, marketing companies have existed that solve a very tactical and analytics-based problem: how does one create the best ad for Google's AdWords platforms? When you dig deep and uncover who the best advertisers are on Google, more often than not, what you discover is a lot of technology driving the solution, and very little creative effort that is being used to create these text-based ads. It is a complex system that melds keywords, geography, time of day, competitive terms, random terms that are highly-trafficked, bidding strategies, and other more obscure data points to widdle down to an ad that converts the best (and costs the least). The brand behind these ads, care little about the creative direction and much more about how it is reacting in the live bidding environment. Google is not alone. Facebook served close to $4.5 billion of advertising in 2012 (can you believe it?). And, according to the Business Insider article, How Facebook Is Replacing Ad Agencies With Robots, a good chunk of that work is never touched by a creative director, an ad agency... or even a human being.

From the article: Never has there been such a gigantic volume of advertising displayed in which professional agency creative types have had so little involvement... In the agency business, those ads are largely regarded as replacements for the old classified ads that used to appear in newspapers.

Then there's the other side...

The popularity of social media over the past decade-plus has attempted to convince brands that the only way to capture attention and engagement in these highly disintermediated and media saturated environment is to make the brand as human and humane as possible. The seminal business book on this topic, The Cluetrain Manifesto (originally published in 1999) said that "markets are conversations." Through blogs, podcasts, Twitter, Facebook, YouTube, Pinterest and whatever channel you care to think of, brands could connect with consumers and engage them in these conversations and meaningful relationships. So, how is that working out? We're closing in on 13 years of social media commercialization and some brands have done spectacularly well with it, while others are struggling to find the true return on investment. What we have learned is this: social media is not advertising, nor is it a replacement for advertising. There is a complexity in creating content as an engine of media, and in figuring out how it translates into an engine of direct response. The current iteration on social media marketing is now being dubbed "content marketing," while publishers - still trying to either stop the bleeding from their traditional ad revenue or the new digital-only entrants looking to gain revenue from brands - are turning to native advertising as a potential advertising windfall. Whether it is social media, content marketing and/or native advertising, all three of these venues require a lot of hand-holding for brands. They are not silver bullets with quick and easy wins. Any form of content strategy requires time, effort and ongoing maintenance that many brands never had to endure in the mass media advertising world of yore.

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Three sides to this story.  

So, on one side, we have this newish form of performance-based advertising that is highly automated and driven by technology over creativity, where speed and real-time reactions play essential factors in the brand's performance. On the other side, we have content marketing and native advertising, which is driven by content sharing, the social channels and more to create a reaction that would be similar to a blog post or a YouTube video going viral. Where does this leave the people who create the strategy, design the ads and figure out the best place to put an ad - in both the physical and digital spaces?

We live in a world where marketing pundits will publish articles titled, Customers Don't Want Ads, They Want A Conversation, but these sweeping generalities may not be reflective of this new consumer. What is abundantly clear is that advertising - as we have known it to date - slides into the middle of the publicity channel. It is no longer the 800-pound gorilla in the marketing mix. This does not spell the end of the "big idea," nor does it mean that the current slew of award-winning advertising agencies will be boarding up their doors any time soon.

What advertising becomes. 

What we do know is that the truly effective advertising agencies of the day are having to up their game in relation to technology, performance, content creation and more. While it may be easy to rattle off those terms and put a checkmark against them in a credentials deck, being able to demonstrate expertise is going to be an entirely different story. We live in a world of retargeting and remarketing where brands can better understand the user's behavior as they are being tracked throughout their regular online visits and send them ads based on the content that they have consumed and the products they have seen. Again, the vast majority of retargeting efforts rely little on creativity and much more on data and automated services. Couple that with multivariate testing and suddenly, we're in a world where hip creative directors are being positioned against ad monitoring technology that is able to create and serve the best-performing ad... regardless of how lacking it may be of creativity and a big idea.

The trick to advertising's future is going to be in how well these three stories -- automated marketing, content marketing and advertising agencies' offerings -- tell a bigger and bolder brand narrative that drives economic value.

Mitch Joel is president of Twist Image. HIs first book, Six Pixels of Separation, named after his highly-successful blog and podcast of the same name is a business and marketing bestseller. His next book, CTRL ALT Delete, will be in stores on May 21st, 2013.