We’ve been hearing for quite some time about the coming online gold rush driven by local advertising. Borrell Associates, for example, forecasts local online advertising to grow by 48% in 2008. For projections like these to prove true, however, those local advertisers need some encouragement. According to this story in the Wall Street Journal, newspapers seem to be doing an especially poor job of it. An awful lot of small businesses have discovered the value of online advertising, particularly paid search, but a lot more haven’t. It’s the second group that can use the encouragement, but the thought of visiting all of those small advertisers to make a personal pitch is daunting. As a result, as the WSJ article notes, most newspapers initially “focused on selling ads to bigger advertisers who were already buying space in their print products.” Now, facing the possibility of losing the local advertising market to national internet companies, newspapers are scrambling to figure out how to sell the local guys on online ads.

Meanwhile Google, in position to be the king of local advertising through its AdWords, AdSense, and mapping products, has also been thinking about how to reach more local advertisers. They’ve come up with a nifty plan called “The Google Online Marketing Challenge.”

Student teams will receive US$200 of free online advertising with Google AdWords and then work with local businesses to devise effective online marketing campaigns. You will outline a strategy, run your campaign, assess your results and provide the business with recommendations to further develop their online marketing. Teams submit their reports and are judged by a panel of independent academics from all over the world.

You have to admire this marketing program run under the guise of educational service to our nation’s youth. The teams, from Azerbaijan State Economic University to the University of California, Irvine, will fan out all over the globe running online ad campaigns for local advertisers using Google AdWords. Google gives up some AdWords revenue in return, they hope, for student and business owner converts to the power of online advertising.

The winning team will get “a chance to visit the Google Headquarters in Mountain View, California, and meet the team that created AdWords.” I think I’d rather meet the team that came up with this contest.

Alex Iskold writes on Read/Write Web that there is “a myth floating around that contextual advertising is going to help Facebook justify its $15 billion valuation.” He goes on to say that the reality is much different:

• Facebook does not know much about us
• The data that Facebook has is not structured
• People are not coming to Facebook to click ads

Read the post to see exactly why he makes these assertions and then continue on to the comments to see several readers take him to task for having no real backup for them. My reaction to the post, is that Facebook’s ad programs are in their early stages and it’s too soon to tell just how successful the company will be with its targeted advertising.

While Facebook is currently running ads similar to those found on media and other web sites (presumably cpm and cpa), the buzz is all around its attempts at highly targeted ads. Given how hard the company is pushing the envelope, it clearly feels pressure to justify it’s valuation by bringing to market a highly effective ad program based on social networking. Implicit in this is the notion that the “everyday” kind of ads it’s running now won’t do it. Iskold adds to this idea by suggesting that Facebook users don’t click on ads. Anecdotal evidence would certainly bear this out, but it’s just that - anecdotal.

If Facebook users don’t click on ads, it may not be because they never will, but simply because the wrong ads are displayed. At first blush, the major facebook demographic may seem pretty tight - college students. But this group is really much less targeted than many advertisers want. A myriad of interests bubble beneath the surface, and tapping into those interests is where the real money lies. Facebook should be able to do that because users list their interests, but that has yet to become reality (although it may soon). In the meantime, it’s niche social networks that would seem to hold some real promise.

Niche networks, those based on a shared interest, make obvious what they’re all about, whether it’s a sport, a hobby, or a geographical community. With the network itself doing the initial segmentation work, adding in behavioral targeting only increases the network’s value. While there are a lot of these niche social networks on the web, traditional local media sites, such as newspapers, should be well positioned to create them. With already strong ties to the community, newspapers ought to be able to build sites based on geographical communities as well as interests specific to their market. Let Facebook work the bleeding edge of social network targeting, local media can let the network do the heavy lifting and start to build vibrant local communities of interest that are appealing to advertisers.

We’ve heard a lot about the creative generation lately, much of it revolving around the online work this group does for free. As this trend begins to mature, we’ve seen that creatives are realizing the value of what they do, whether it’s video, blog posts, or graphic design, and are looking for ways to be compensated. Offline, artists and crafters who begin making objects for friends and family, and are encouraged to sell their work, usually end up at craft fairs, hoping some of those in attendance will see value in what they’ve created. An uncertain process to say the least, but one that’s been established for many years.

I recently came across a new site called Mintd, that bills itself as a “a global collaborative space for artists, designers and musicians to sell their work and connect to new markets.” The twist at Mintd is something called a “Lookbook.”

People buy products. They take photos of themselves or their friends with these products, and upload them to the site. Other users can browse these lookbooks, and link to the products the stylist has used. If they subsequently buy the products, the user who submitted the lookbook gets a commission from the price.

The idea seems to be that there is no better way to sell a product than through an endorsement by a happy buyer. So much the better when that endorsement includes pictures of the product in use.

For a consumer, it sounds like an interesting site that could yield some real gems. When I look at it, however, I see it as a real resource for retail buyers. A whole Web site of interesting and unique objects aggregated in what amounts to an online showroom. But what if that buyer is from Target? How could an individual artisan ever hope to supply the large volume required? The Target buyer makes a simple introduction to her preferred China vendor, and everyone is off to the races. If it’s a resource for buyers, it’s competition for vendors. Another sign of how the mom-and-pop shop can compete on a global basis for business once available only to anointed suppliers with large logistical infrastructures.

Last month, Bob Garfield published an article (4th in a series) in Ad Age that created some buzz among media bloggers.  Written more as a warning to ad agencies, it has obvious relevance to media companies as well.  Although in many ways typical of the doomsday genre, it also has some twists.

A lot of time is spent chronicling the decline of traditional media, as well as some denial statements by media company leaders.  At this point, I would think the dead horse no longer needs to be beaten, but perhaps it does.  As critics write as if traditional media is already dead, and some proponents talk as if it is only getting stronger, the truth, we know, is somewhere in between.  More importantly, accepting the truth means understanding that the decline has begun and that new models must be found.  But these new models don’t have to replace the old models wholesale, they become part of a portfolio that includes both.  That, however, is a mouthful.  Imagine the change required of a newspaper company to view the newspaper as a portfolio product rather than as the heart and soul of the organization.  Or the same change in attitude at a television network.

 Garfield goes on to make the point that while previously we assumed that ad spending shifted among media but did not shrink in total, he believes that now it will shrink.  As producers gain the ability to directly reach finely targeted consumer segments, brand advertising, and certainly mass brand advertising, becomes less relevant. 

Mass advertising flourished in the world of mass media. Not because it was part of God’s Natural Order but because the two were mutually sustaining. You’ve read the Ten Commandments; not one of them is “Thou shalt finance hourlong dramas” — nor is there a word in there about scale. So why assume that either must transition to the new model? Not only is it economically nonsensical, it squanders the very nature of the digital universe, the ability to speak with — not to, but with — the narrowest communities and individuals themselves.

Garfield also lists five reasons the online world will largely displace traditional advertising:

1. People don’t like ads
2. But they crave information
3. The consumer is in control. No, really
4. Diversion of ad budgets
5. Pay-per-view

The discussion of each one of these is definitely worth reading, although I tend to see a half full glass in each, not half empty.  We know people don’t like ads, but they do like consumer products, so there is a tremendous advantage waiting to be gained by the organization that figures out how to tell them about consumer products without annoying them with advertising (advertising is in the mind of the beholder, isn’t it?).  Obvious, but often ignored, is the fact that people crave information.  Good news if you’re an information provider.  Point three includes a great quote from media economist, Bruce Owen:

I guess the most important thing that I would be asking myself is: How can I make advertising something that people are not only willing to put up with but actually have positive willingness to take?

 I’d be asking myself the same thing.  As ad budgets get diverted to exploit the Internet’s ability to target, it’s more good news for media companies that own targeted audiences, or can target audiences.  Everyone, right?  Finally, Garfield worries that pay-per-view content “would eliminate advertising from the equation.”  Well, if you’re a content producer this scenario is probably good for you, but I’m not sure I follow the logic in any case.  I once worked for a company that made a substantial amount of revenue through pay-per-view advertising.  That may have been some years ago, but the point is the same - there must be some mechanism by which consumers are made aware of the content.

Although the piece was written for ad agencies, I think the point for traditional media companies is not that they’re doomed, but that they must change.  Not exactly a novel idea.  For many, traditional media companies are assumed to be stocked with Luddites, unable to see the future much less act upon it.  Talking about the online market’s ability to absorb ad budgets moving from traditional media, Garfield says:

A collapsing old model. An unconstructed new model. Paralyzed marketers. Disenchanted consumers. It’s all so … chaotic.

Chaos, yes, but also opportunity.  For traditional media companies that believe their mission is to deliver news, not print newspapers; deliver entertainment, not broadcast over the airwaves; the future can be bright.  But it can’t be the same as the past.

In its most recent newsletter, PODi reports on RocketDog Racing’s use of personalized follow-up after the Cellcom Green Bay Marathon and the Door County Triathlon.  It featured a personalized postcard mailer and a customized Web site:

The postcard for the marathon featured an over-sized image of the runner’s bib number on the front. The back of the card included copy that thanked them for participating in the race and a Personalized URL for the runner. The URL led the participant to a personalized Web site that listed their race results. When the participant visited their personalized Web site, they were greeted by their name, their official finish time, and a finish line photo (and link to a gallery of their photos at the event photographer’s site.) They were also presented with a table outlining their mile and pace split times.

Decades ago photographers began taking and selling pictures of competitors in all kinds of races.  (How can Mom not buy that picture of junior racing down the river in the Head of the Charles?)  Bib numbers provided the perfect means to identify participants.  Now, with the use of RFID tags, a large amount of data can be generated on each competitor, limited only by the cost of placing receivers along the course.  RocketDog’s mailer and Web site is a nice use of some of this data.  Athletes can be data obsessives, at least when it comes to their performance, and a web site with split times and pace plays right into this need.  The company reports that over 30% of participants visited the triathlon Web site.  Honestly, that seems low to me; I’d be on that site the moment I received the mailer.  It may be a bit more obvious here, but  this still serves as a reminder that customization and personalization affects every single business.

Brandchannel.com has an interesting article on the proliferation of hotel brands.  Noting how difficult it is for a consumer to differentiate among all of these brands, the article states:

This is just one aspect of the branding problem. The larger hotel companies seem to spawn brands whenever the mood strikes. And the problem is getting worse. “The hotel industry has launched several new brands in the past 18 months,” says Jeff Weinstein, editor-in-chief of HOTELS magazine. “Not only is it hard to create the critical mass necessary to make these brands relevant, but these new hotel brands have to create a very distinct identity and then deliver the matching experience to have any chance of resonating in the mind of the consumer. Creating that identity, making sure there is enough demand, and then actually delivering the goods is not at all easy.”

It’s hard to argue with the notion that hotel brands aren’t what they used to be.  The days of a few major hotel chains (e.g. Marriott, Hilton, Ramada) with clearly differentiated value propositions, seem to be gone.  Now, if you consider a reservation at a Hilton, for example, you have to find out if it’s a good Hilton or a crummy Hilton (or Marriott, Ramada, etc.).  Crummy Hilton!  The very statement would seem an oxymoron 30 years ago, but now it’s possible.  With so many brands trying to reach so many segments, consistency has become a problem along with differentiation.

Perhaps most interesting, though, is the article’s contention that “the hotel industry seems to be moving in the direction of very customized offerings.”  In this view, brand proliferation is seen as the industry’s attempt to customize.  Customization is a long-term consumer trend that’s been impacting all sorts of businesses for some time now, and it seems smart for hoteliers to try to capitalize on it.  As with so many things, it’s all about the execution.  If you don’t know what a brand stands for, it’s hard to see it as customized for you.  Maybe the winning formula is a customizable brand - a hotel chain that allows guests to customize their rooms.  Or maybe a brand that offers different characteristics at different locations (e.g. green, long-term, business traveler, etc.), but with a clear, overarching value proposition (e.g. customer service, family friendly, luxury, etc.).  It’s an interesting challenge, but one that doesn’t seem to be met with the current over-branding approach.

Some time ago I noted Don Norman’s article discussing consumers’ desire for more complex products. Shortly after that I pointed out a New York Times article that discussed research showing that if a multi-attribute product is priced too low, consumers suspect its quality. The Times is back again with an article discussing a paper in the Journal of Consumer Research that found consumers “are more likely to repurchase products when the initial purchase experience is packed with ’superfluous choices.’”

For example, students choosing between packages of blank CDs with varying prices and features were more confident in their eventual choices, and more likely to repeat them later, if they were first asked whether they wanted 4, 5, or 6 CD case colors in their packages — though all had said that case color was unimportant.

The choice itself, the authors said, was meaningless. But that tiny extra step — choosing how many colors to get — made the decision seem more considered, and hence more reliable, when the students reflected back on it.

This isn’t the same as a complicated product, of course, but it does reinforce the idea that we like choices and we like to feel in control.

A few other noteworthy nuggets that came out of the PSFK conference on Tuesday were from the panel discussion titled “Eco Shift or Greenwash.” The panel was comprised of Tamara Giltsoff, Hemal Vasavada-Gill, Jill Fehrenbacher, and Marc Alt.

The first few people to speak, Marc and Jill, both noted companies that they felt hadn’t received proper credit for their Green efforts. In Marc’s case it was Wal-Mart (several initiatives) and in Jill’s case it was H&M (organic cotton). I had expected fire-breathing eco-dragons on this panel and instead heard some rational discussion of corporate Green efforts. This, along with some other discussion, made me feel that the eco-ground is truly shifting for activists. With opinions expressed in the media and among the urban cognoscenti swelling in their favor, they seem to be shifting into business mode from fire-breathing mode. If I’m right, this should mean that companies can stop trying to please activists with their Green products and start trying to please consumers. I’ve said many times before that Green products will only become widely accepted when they offer benefits beyond their Greenness. Those who truly believe in the cause should work on creating superior Green products, not just Green products. It looks like there may be hope that the shift is beginning to occur.

The danger for companies is not over yet, however, as evidenced by an interesting quote from Hemal: “Green is a liability.” She wasn’t entirely clear on what she meant, but I took her to mean that if you do Green “wrong,” the price you pay is high. To me, this brings to mind the lessons learned by the college football world as a result of the criticism Notre Dame received when it fired Ty Willingham. Whatever it was that the critics wanted to teach, the lesson learned was don’t hire a black coach unless you are absolutely positive you won’t need to fire him. With Green products the lesson may be don’t bother unless you are willing to make your product, initiative, etc. absolutely unassailable. The shame of this is that it leaves no room for companies to make honest, but flawed, efforts. What I heard from this panel, I hope, means that is also beginning to change.

The best evidence of a change in the air came from Tamara who said she has been, somewhat controversially, “pro-greenwash.” Her belief is that even if flawed, a Green initiative at least starts the conversation. I think that’s a healthy attitude and one that may actually result in truly remarkable Green products.

In New York yesterday, I attended the first PSFK conference and found that although it was occasionally a bit rough around the edges, it was worth the trip. I was also glad to see that the “creative type” uniform was being enforced, as I never before saw so many plastic rimmed, rectangular glasses riding above dark, peacoat length coats in one place in my life. There were many good things to take away from the presentations, however, even though some of the afternoon talks were a bit heavy on marketing speak.

One of the morning sessions involved two artists talking about how they turned their art into advertising. Laurie Rosenwald and Scott Campbell are two very different people, but both successfully created businesses out of traditional art. By traditional art, I mean non-digital. Scott told an interesting story about a client meeting that included four other graphic designers, all of which broke out their laptops at the conference table, while Scott opened up his pad of paper. In our highly digitized world, it’s taken for granted that anyone doing commercial art will create it digitally. We’re so inundated with stories of consumers creating graphics, videos, and blogs, all of it digitally, that we sometimes forget about physical art. Might there even be people who have visited Second Life art galleries, but none in real life?

Laurie and Scott, however, still sit down at a desk (Laurie) or an arm (Scott) and create. Their creations may finish their lives in digital form, but much of what makes their work desirable comes from the fact that they create the old fashioned way. They’ve tapped into something that’s awfully tempting to see as a counter-trend.

Laurie uses ink bottles, scraps of paper, and cut-outs to create designs that are meant to be touched. Even when they end up on a two dimensional page, they look very 3-D. Her designs make me think immediately of the current handmade card trend. These cards are embellished with paper, fabric, and plastic doodads that give them a hand made look (think scrapbook page). The tactile nature of these cards seems to be a reaction to the digital nature of much of the rest of our lives.

Scott’s art is rooted in tattoos, and he’s designed a line of tattooed furniture at Bergdorf’s and is working with Nike to design their 2008 US Olympic uniforms. I’ll certainly be interested to see those uniforms, although Scott was mum on what they might look like (contractual arrangements, you know). Scott had one of my favorite lines from the conference when talking about digitally designed, infinitely replicable graphics - “There’s no personality in perfect.” As he talked about the “grit” in his work, he told us how he met with Comcast reps in the back room of his tattoo shop. I’ve talked before about how tattooing came in from the cold quite some time ago, and Scott does an excellent job of keeping one foot planted in the street art underground while toeing the commercial line with the other.

I think both Laurie’s and Scott’s art is enjoying some popularity because they run counter to the mega trend of all digital all the time. Every large trend produces counter trends that swirl off of it like eddies at the edges of a river. While they may not slow the river down, they can still be quite profitable for an innovative company.

Earlier this month, as Gap’s problems came back into the news, the gang at Influx posted a list of 21 possible solutions. While not the raw output from a brainstorming session, it’s still first stage output and, as you would expect, is “a wild mix of the predictable, the impractical and the crazy.”

While the folks at Gap ought to read this list, its value for me isn’t so much in the solutions, as in the opportunity to see a snapshot of an early stage in the innovation process. Some of these ideas are contradictory while others are downright silly, but Influx laid them all out for us to see. In a lot of companies I know, some of these ideas wouldn’t even make it out of a brainstorming session much less onto a public Web site. They would be self-selected out because they are “obviously” not workable. Each of us can see the ideas that are silly, right? Right, but which ones? Show this list to twenty people and I’ll bet that not one idea is unanimously declared to be not worth following up.

Influx does us all a great service by posting this list because we get to see that while many of the ideas are ones we might have come up with, others are more insightful than what we could think of, and others we might have thought of but never said for fear of looking silly. But you never know how the really innovative solution will emerge and it usually comes from a combination of ideas, some of which intially seemed great, and others that seemed pretty bad. If your company knocks out ideas at brainstorming sessions for being dumb, unrealistic, or retreads (or just about any other reason, for that matter), you have to wonder if you’re allowed to have any new ideas at all.

Now, if Influx would only show us how to implement…

It’s the day after the Super Bowl so I suppose it’s de rigueur to comment on the ads and the New York Times does its part with this piece. Here’s how it begins:

No commercial that appeared last night during Super Bowl XLI directly addressed Iraq, unlike a patriotic spot for Budweiser beer that ran during the game two years ago. But the ongoing war seemed to linger just below the surface of many of this year’s commercials.

We then learn that the violent commercials were influenced by the war (”It was as if Madison Avenue were channeling Doc in ‘West Side Story…’”), the sweet, happy commercials were influenced by the war (”…welcome counterpoint to the martial tone of the evening.”), and the dream commercials were influenced by the war (”Those who wish the last four years of history had never happened could find solace in several commercials that used the device of ending an awful tale by revealing it was only a dream.”). Oh, and those sweet, sappy, Coke commercials? Guess what else they drew on for inspiration? You got it, the”Peace” Coke commercials from the Vietnam war.

This is all so silly it’s hard to believe it made it into the pages of any newspaper, much less the NYT. Perhaps the article’s author, a baby boomerish looking Stuart Elliott, got tired of hearing how to baby boomers everything’s about Vietnam and decided to make everything about Iraq (and a little about Vietnam). I don’t know about “Best” and “Worst,” but I do know I didn’t see any ads about Iraq.

Uh, wait a minute, maybe they were too subtle for me; they were working on a subconscious level. Maybe I just needed the New York Times to tell me what was going on. Yeah, that’s it. Now I understand; those ad guys sure are crafty devils, pushing all those ads at me with the subtext of the Iraq war. Jeez, and me not even catching on!

Talk to any Wal-Mart vendor about RFID tags, and his eyes will start to dart around the room, his feet will shuffle, and he’ll say “uh” a lot. He’s either nervous about how to meet Wal-Mart’s upcoming RFID requirements, or he’s pretended it will go away and you’ve just reminded him that it won’t. For some people, however, RFID tags are fun.

Today’s New York Times published an article about billboards that give Mini Cooper owners personalized messages as they drive by. The enabling mechanism for these messages is an RFID tag in the driver’s key fob. From the article:

The boards, which usually carry typical advertising, are programmed to identify approaching Mini drivers through a coded signal from a radio chip embedded in their key fob. The messages are personal, based on questionnaires that owners filled out: ‘Mary, moving at the speed of justice,’ if Mary is a lawyer, or ‘Mike, the special of the day is speed,’ if Mike is a chef.

Of course, this raises privacy concerns, but,

‘There’s no piece of this that’s invasive,’ said Trudy Hardy, manager of Mini’s marketing department. ‘It’s a completely voluntary program, and there is zero confidential information in the fob.’

This is a fun use of RFID technology and it gets us closer to the day when we all do the “Minority Report Walk” for real (remember Tom Cruise walking down the street as signs called to him by name and projected his image?). Even more fun are billboards that display your own message when you drive by (in your Mini, of course). This inventive bit of loyalty building was covered earlier by engadget:

Users can select a custom message to be encoded on their RFID chip, and when they cruise near an overhanging MINI billboard, their particular message lights up for the world (or at least nearby motorists) to see.

Every fun use of RFID technology that gets consumers to willingly carry a little homing beacon around, makes it that much easier when the time comes to convince them that it’s really in their best interest to beam their presence around a store so they can receive special offers tailored just for them, and so signs can present ads for their favorite retailer that just opened a new store around the corner. There will always be privacy concerns, but that’s why innovation is so important. Nobody will carry a RFID tag around just because you want them to, they’ll carry one around when it helps them get something they want.

“Tell a story.” That seems to be the marketing advice du jour, and is usually very effective. There are times, however, when it misses the mark, and I was reminded of that last night watching the State of the Union.

The State of the Union speech, and the Response to the State of the Union (a ridiculous notion if ever there was one), are an exercise in marketing communications. The President has programs to sell to the nation and Congress, and the opposition has a different view to sell. “Tell a story” advice seems perfectly suited to these two speeches, and both President Bush and Senator Webb took the advice. Why was it, then, that I dreaded the moment when the President would start to tell the stories of the “citizen heroes” in the gallery? Was I the only one who cringed when Senator Webb pulled out the photo of his father? The speakers were telling stories, but they just didn’t work. Why?

The answer, I think, is that the stories were too specific; too anecdotal. It’s pretty clear that a politician can find an example or two to “prove” just about any point he wants to make. Doing so in a speech simply confirms that the speaker fits the politician stereotype and becomes embarrassing, not probative. A story I would want to hear would be broader and more extensible. Don’t tell me about a woman who started a $200mm company, tell me about a entrepreneurship program that helped 50 laid off workers start their own companies. Don’t tell me about a student from an inner city school who went on to college, tell me about an education program that enabled hundreds of inner city students to graduate from college.

One last point should be obvious - if you’re going to tell a story, tell one that proves your point. In his Response last night, drawing a parallel to the War in Iraq, Senator Webb told the story of President Eisenhower, who entered office pledging to end the Korean War and soon did so. In telling the story, however, the Senator seemed oblivious to the fact that North Korea, which was left intact by the Korean War armistice, is now one of the major sources of instability in the world. Stories can be very powerful, but only when they support your message..

Monday’s New York Times story on the ubiquity of advertising ignited some discussion about the relative merits and demerits of ads everywhere, all the time. Many writers lamented the loss of blank space while others decried the crass commercialization of Everything. I’m a little more sanguine, however.

Early in the Times article, Linda Kaplan Thaler, chief executive at the Kaplan Thaler Group, a New York ad agency, is quoted as saying, “Ubiquity is the new exclusivity.” This is one of the article’s key statements about this trend. The statement itself reminds us that the trend will one day be replaced. The fact that we are reading an article about it in a major daily makes us believe that day will come sooner rather than later. In fact, one suspects that Ubiquity is now, well, ubiquitous.

This ubiquity of ads, though, has a meritorious effect - innovation. It takes great ads to break through the clutter and it’s the existence of great ads that convinces consumers to allow the clutter. Any consumer backlash is quickly felt. The “Got Milk?” signs that smelled like chocolate chip cookies in San Francisco bus stops caused complaints and were quickly “de-smelled.” Longer in coming but much more draconian is the ban on outdoor advertising that began on January 1st in Sao Paulo, Brazil. Despite the ultimate outcome, I do believe the smelly “Got Milk?” signs were a good idea. They went a bit too far for some people, but I’ll bet there were more people telling friends they’ve got to visit a bus stop to smell the sign than there were complaints. (Advocates for those sensitive to scents ultimately did them in. It is San Francisco after all.)

One of the great ads mentioned in the article was “an interactive floor display for McDonald’s last year [that] showed the head of a teenage boy with small Big Mac burgers flying past; when people stepped on the ad, the burgers bounced away from their feet.” An Adidas sign “looked like a static picture of a sneaker until someone walked past it, triggering a motion sensor that sent a spray of miniature sneakers flying.” People liked these ads, were amused by them, and were probably glad they saw them. Although another innovation, the electronic billboard, is said to make a community “look like Las Vegas,” if programmed to be season, time of day, event, or even weather specific, it will be a great improvement over the static pasted graphics now on display. As John McNeil, executive creative director at McCann said, “If you do it the right way, you actually win points.”

As another example, look at product placement, which was also demonized when it first became popular. The fact is, it enhances a user’s experience, whether it’s watching television or playing a video game. A NASCAR video game with actual products on the cars is much more realistic than one with blurred logos, and we always laughed at how TV characters never drank a recognizable brand of soda.

Interestingly enough, even the ad opponents mentioned in the article seemed to accept the ads, they just wanted advertisers to pay more. The New York and New Jersey Port Authority canceled plans for Geico to place ads at toll booths at the George Washington Bridge when politicians and preservationists complained. The preservationists may have been high-minded about it, but others (only the politicians?) felt the space was sold too cheaply. In New York City last month Chase and Commerce banks were told by the city to turn off ads projected onto the sidewalk outside some branches. I have to wonder if it was because no fees were paid for the sidewalk space. As George Bernard Shaw said,”…now we’re haggling about the price.”

Ultimately this trend will also respect varying community mores, as the Sao Paulo example shows. Commenting on the Adidas sign, a women from the state of Washington said the sign was “cool,” but “I wouldn’t want to see it back in Spokane.”

Finally, one ad agency president said that this type of out-of-home advertising is “one of the last mass mediums.” Yes, and perhaps that explains why it’s so popular among ad agencies - like nearly all mass media advertising, a good creative ad can make a big splash, yet the ROI really can’t be measured. The article ends with Perry Ellis dubbing a campaign which placed ads on shirt boxes and dry cleaning bags a success because laundries continue to call looking for more after the campaign ended. Since the bags and boxes were given to the laundries for free, that tells me more about the cleaners desire for free bags than the success of the campaign.

Through Micro Persuasion I saw that IBM is helping Sears launch a store in Second Life, and has already been working with Circuit City. Like everyone else writing online I applaud these retailers for opening stores in Second Life and expending some real effort to explore where the future of retailing might be headed. The real game, though, is Life 1.5 (if “First Life” is real life and Second Life is a virtual world, I guess shopping online leaves us with a foot in each - Life 1.5).

As commentators talk about the need for Second Life to get easier to use so more people can shop in virtual stores, I think developers should focus on creating virtual stores outside of Second Life. Sure, the framework already exists in Second Life to create these stores so it only makes sense to start there, but the real goal should be to create stores that any visitor to a company’s Web site can use. That would mean no download required, by the way. If I were Linden Lab I would be working on a standalone virtual store app that I could sell to retailers for their own Web sites.

Second Life might eventually become the online equivalent of Wichita, where companies go to test market their products before unleashing them on the world. Second Life stores could be integrated with a retailer’s online virtual store so that Second Life citizens could bump into their neighbor, who is not a Second Lifer, in Sears. Sears, meanwhile, could open sections of its store just for Second Lifers with special deals and products. It could have regional (real world geography) virtual stores as well.

Linden may very well be working on this right now, but it looks like opportunity to me. Not everyone wants to live a Second Life, but (almost) everyone wants to shop in an easy to enter virtual store.