We’re witnessing the death throes of advertising’s “Mad Men” era, and the birth of the Mr. Spock era. Mr. Spock is all about making logic-driven decisions with programmatic ad buying based on data collected about consumers and the context surrounding the ad. Who is clicking, and is that click leading to a transaction? Is this ad worth what we’re paying? Mad Men were all about coming up with clever ideas for ads, treating clients to steak-and-martini dinners, and putting TV spots on the most popular shows. You didn’t know exactly who saw your ad when it ran on “Bonanza,” or what impact it had on sales, but you knew it reached a lot of people.
Basically, explains venture capitalist Jeffrey Bussgang, “The geeks have taken over the advertising industry, and it turns out we have a lot of geeks in Boston.”
In the Spock era, it’s amazing how much information an advertiser can get about who’s seeing their message, and how automatic the purchase and placement of these ads are. As you click around a website on your iPad, for instance, advertisers can bid to have their ad shown on a page as it loads.
What price is Zappos willing to pay to reach a 37-year-old woman in Wellesley on a given Sunday? They can pay for their ads to follow you from one site to another, a practice called re-targeting. They can even set ads to show up only when the weather is below 30 degrees.
“Honda might try to encourage people to do test drives by ‘geo-fencing,’ ” says Jennifer Lum, cofounder of Adelphic Mobile, an ad tech start-up in Waltham. Geo-fencing uses your phone’s current location to determine which ads to show you. “They can have mobile ads show up only when someone on a phone or tablet is within a mile of one of their dealerships. Or Starbucks could advertise to users who are close to Dunkin’ Donuts locations.”
And just like programmed stock market trading, many of these ad campaigns are being run automatically with programmatic ad buying. “If you are a company like Wayfair with millions of products, you want to use software to figure out what products to advertise where, and with which kinds of ads,” says Ric Calvillo, chief executive of Boston-based Nanigans, which is nearing 150 employees.
Boston start-ups like Jebbit and SessionMare trying to devise new ways to incentivize consumers to watch or interact with ads. SessionM, for instance, offers a kind of “frequent flier point” for using mobile apps; they can be given out by the app itself, but you get more when you do something with an advertiser, like watch a video or fill out a survey.
With enough of SessionM’s points, “You can shop for Amazon or iTunes gift cards, or make a charitable donation,” says chief executive Lars Albright. “It turns advertising into a more positive experience than just slapping up a banner ad, which people see as basically spam.” His Boston company has 60 employees and has raised $26 million from investors.
All of these new forms of digital influence may skeeve out consumers, who’d prefer to remain untargeted and unmolested. But it’s important to remember that in the Mad Men era, we had soap operas and “Seinfeld” on TV because we watched the commercials. In the Mr. Spock era, we have free apps and social networks because we watch — and occasionally click on — the ads.
“It’s an explicit value exchange,” says Lum. “Consumers get apps and content, but the creation is being subsidized by advertisers that want to reach them.”
The technology delivering the ads may be new, but the trade-off is the same.
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