Just 20 years ago nobody had the internet, and early adopters of technology could be spotted a mile off, thanks to the clunky, designer-brick prototype mobile phones they happily brandished. Today, there are one billion internet users in a world packed with two billion mobile phones. Digitisation is happening at rocket-propelled speed, with internet users doubling in the last year alone, and new technological wizardry emerging at every turn.
All this technology is making the world a more intimate place. Where once Coca-Cola might make a block-busting TV ad and then just sit back and enjoy audiences around the globe, now it and every other advertiser is poring over databases and scrutinising the "elusive consumer" through an empire of online data.
"Big Brother" is no longer just an Orwellian vision of 24-hour surveillance, and the fear that someone knows all about you, but a reality show which entertains in a digital space, with people joining in by texting their votes, going to the website, tuning into digital channels and enjoying the interactivity.
Advertising strategists, you might think, have never had it so good. "From our side of the telescope, the telescope has got more effective," Richard Eyre, the chairman of the Internet Advertising Bureau, says. "We have a much clearer idea of who and where people are, particularly online."
The sciences of behavioural targeting and microtargeting are on the increase. Websites are working to customise user content by analysing site registration data, movements on the site and even information from third parties. Damian Thompson, the head of consumer insight at Mediaedge:cia (Medialab) EMEA, says: "There is an obsession with behavioural targeting in the US. It's less visible in the UK, but I'm sure we will be evangelical here."
One method of divining user profiles is through the gateway to media content: search. There are still major restrictions on using the search process to understand the consumer, but advances are on the horizon.
Microsoft's new Ad Centre product, due to launch in the UK before the end of the year, will link registration details with search key words, so that advertisers can get a clearer idea if their target audience is ready to see an ad. "Even closer targeting is just around the corner," Mark Chalmers, the creative director of the ad agency StrawberryFrog, says. "There are companies like Hapax in London that have systems to 'read' content and understand what it means. Not just keyword matching, but actually understanding what the page says. If we have such a sophisticated level of understanding, surely this can be used to deliver highly targeted, relevant and very effective ads."
Through this activity, companies are treading on eggshells with concerns about privacy issues. In each country, there is differing legislation in place to prevent the gathering and use of personal data. For example, in the UK, we are governed by the Data Protection Act and European legislation.
It is being predicted that a whole chunk of global society will say "no" to being wired in. Rishad Tobaccowala, the chief executive officer of Denuo, Publicis' new strategic digital consultancy, says: "There may be an entire society that wants to come off the grid, because everything you do on the grid is monitored electronically."
But at the same time, the current huge wave of activity on the web has seen people piling on to sites where they generate the content (Flickr, YouTube, MySpace), happily sharing personal experiences with the other billion or so users.
According to Steve Tindall, the managing partner at MindShare, "The technology isn't an issue ... it can do just about anything these days, it's about getting around the law and demonstrating to the consumer that it's to their benefit, then everything else will follow." Nigel Morris, the global chief executive of Isobar, Aegis' global digital network, agrees that the barriers to advertisers using much of the new technology are not insurmountable. "I think the legislation in many countries tends to follow what consumers want or, conversely, gets pushed by consumer acceptance."
It seems the older generation is more swept along with all the changes. However, younger people, immersed in the new media, are less tolerant of traditional advertising approaches.
Gaming is one area where young people feel ownership of the medium, and advertisers need to be cautious. It's also a huge area of opportunity. Gaming has spread beyond the youth and "geeks-only" market and into the mainstream, with more than 26 million gamers in the UK. The three big manufacturers in this market are all layering on the sophistication, with major launches this year (see the "Gaming" box over the page). Online gaming is the mecca, especially for advertisers, where the flexibility to change and tailor ads for different audiences will open up a huge medium.
Possibly the most advanced games are those designed to be played over the internet. World of Warcraft has six million players entering into its virtual world. Others, such as Everquest and Second Life, are building up enormous player numbers.
The first media revolution, according to Eyre and fellow media observers, is everything migrating online. "Online is the most likely method of distribution," Eyre reckons, "because of its ability to manage interaction, to make spontaneous payment and to be personalised."
Apart from the significance of Web 2.0 (see "Internet" box over the page) and the whisperings of Web 3.0, (when web and computer will be as one), many online tools are becoming more sophisticated. New versions of Flash have allowed video in banner ads and weblogs can determine how much of a stream of video is watched, and if the user clicks through to another site. As Flash improves, we will be seeing more embedded ads, product placements and hot spots in the video stream.
One of the big pictures in online development is the emergence of wi-fi city centres. In the US, there are around 300 city plans for wi-fi networks, where people will be able to pay a monthly fee to connect wirelessly to broadband in areas across the city. There are already many high-traffic areas with wi-fi in various cities across the globe - including BT Openzone hotspots in Cardiff. But covering large areas is planned for the near future.
Another major internet development is internet protocol television which is being designed for reception through a TV, but which is broadcast using broadband technology. Despite the fact that it is taking a while for the infrastructure to arrive, IPTV will mean personalised, interactive viewing on demand. Jean Paul Edwards, the head of media futures at Manning Gottlieb OMD, says: "For advertisers, it will mean tighter targeting with minimal wastage. You won't be able to make one lovely looking TV ad for 50 people, but you could do a great ad, with 100 different versions."
Enter the technology to deal with different versions of TV ads. The New York-based Visible World has developed "intelliSpot" software, which allows a television ad to be customised. Different versions of spot ads can be triggered by audience demographics, programme content, geographic location, time of day, or other dynamic variables. The system automatically generates and distributes dynamic ads.
The shift of radio and IPTV online is underpinned by the rapid worldwide increase of broadband. The country with the greatest broadband penetration in the world (in 2005) was South Korea, with 70 per cent of households; the other major Asian presence being Japan, where penetration had reached more than 40 per cent by the end of last year.
This year has seen a sudden explosion in new advertising ventures in Japan, which are taking advantage of the new Web 2.0 technologies. Agencies and advertisers are using the likes of podcasts and weblogs to exploit the internet's new opportunities for advertising. Japan has had mobile phone advertising for years now and the mobile operator DoCoMo has designed a payment method, whereby your mobile phone is scanned.
But elsewhere, other exciting initiatives are seeing other parts of the world playing catch-up - as ads on mobiles become more sophisticated, with video and real-time possibilities. New mobile media channels are evolving; in the UK mobile phone operators are piloting mobile content portals, including T-Mobile's T-Zones, Vodafone Live! and Orange World. Mobot Inc, based in Massachusetts, is involved in a test for a "British convenience-store chain" which offers a new variation on clipping coupons. Customers with camera phones take pictures of store products and wirelessly send photos to an agency licensing Mobot's technology; the agency would send back barcode images. With a bar-code image on the mobile phone's screen, the phone could be swiped over a cash register's scanner for product discounts.
The Nordic region has been at the forefront of many new media developments. Martin Cedergren, the director at leading agency Forsman & Bodenfors, says: "The biggest trend in Scandinavia is that the internet is going mobile. With the 3G network reaching almost everybody, and with smart phones from Sony Ericsson (such as the K610im and W950i) and Nokia (N95) coming up, the advertising market will increase a lot in the coming months on the mobile internet."
One sizeable area of mobile development in advertising is outdoor. The industry giant JCDecaux has been trialling posters that send digital messages to your mobile phone as you walk past them. (The passer-by has to agree in advance to accept such messages.) This is the latest twist, following Bluetooth downloads and text communications with digital poster sites.
If you happen to be passing through Manhattan in the small hours, you may not find posters speaking to you, but another development, inspired by the Stephen Spielberg film Minority Report, gives you the chance to go window shopping - literally. Holographic, transparent, touch-sensitive screens behind the Ralph Lauren shop windows (see the lead picture on page 26) allow you to browse, select and pay for merchandise which is then shipped direct to your home.
Digital advances are coming thick and fast. As well as the underlying technology, the choice of digital gadgets seems to be ever-expanding. As well as mobile phones, there are BlackBerrys, portable games, portable satellite navigation systems and iPods. Well, here's another: Stop & Shop Supermarkets in New England has tested a "shopping buddy" which can change the discounts it offers you as you walk through the store, based on your buying history. Coming around the corner will be 3.5G mobile technology, which will allow for a speedier transfer of data. This is destined to be with us in 2010. And on the web, we can look forward to Ipv6, which will swell data capacity to intergalactic levels in comparison with the current Ipv4.
But what if you want to escape from all this? There's a raft of new technologies that allow you to opt out of ads. One of the best known is TiVo, the digital recorder which time-shifts through ad breaks. But even TiVo is now offering an on-demand web service called Product Watch, where users can opt in to messages from advertisers who have joined its scheme.
Escape, it seems, is futile.
BLUE SKY THINKING
- Dave McCaughan, consumer insights director, Asia-Pacific, McCann Erickson
"Continuing its popular Communo series of bio-patch personal communicators, SonAppleSung has announced the release of a version which features a GPS Preference Tracker Communo.
"It comes in a variety of decorative tattoo-like designs, which will stick to the wearer's flesh and is bio-powered - it absorbs enzyme-driven electricity from the body. There is a life-time guarantee, but given that most people replace Communo daily with different designs, it's more common for them to change their communicator on a weekly - or even daily - basis, with full transference of their personalised data.
"The new version offers all the normal services, such as full vocal transference, internet access, multimedia download, and credit/debit payment systems, but it also has an addition to the standard personal purchase history service. Preference Tracker will sort your prior consumption habits and notifies you whenever you are near an item or brand or service to which you have shown an interest. Services are voice-reactive (keyboards having disappeared five years ago, as written literacy became less relevant)."
- Rishad Tobaccowala, chief executive, Denuo
"I'm looking at the year 2015. The last mass medium left is outdoor and most of it has turned electronic and televisual. All electronic media will be distributed over internet protocol. There will be more devices, rather than fewer. People talk about convergence into one device which mows the lawn, opens the refrigerator and answers the telephone, but really people are using more. The convergence is the fact that each device can talk to each other or access a common storage point.
"There will be large groups of people who will spend most of their time in a virtual world. The virtual and the real will become more like each other, with things like interesting 3D pornography. Ten years from now, cinema will be virtual worlds which you step into and people will play 3D games.
"We are on the brink of a new generation of video game consoles coming out ... there will be the processing powers of real-life graphics; real life might be very boring compared to a virtual life. The first global country will be this virtual world."
All media roads lead here, so it's hard to pin down just one thing which is new on the internet. The buzzword in 2006 is Web 2.0 - a shorthand for the new online services emerging to make the internet a sharing place to be, where people can add their own content. You're a virtual nobody if you haven't checked out the websites MySpace (shown, below) or YouTube. This summer, MySpace was getting 3.5 per cent of global internet visits a day; YouTube was receiving 3.9 per cent. Among others, there's the photo management site Flickr and Google's blogging site, Blogger (shown bottom), which had 289 million page views in August.
The biggest things in TV technology are internet protocol television (see main article) and TV on your mobile phone, so it will be the perfect time to welcome the world's first DAB-IP-enabled phones with internet access and real-time TV broadcast. In the UK right now, a combination of ads featuring Pamela Anderson and the catchy tagline, "tellyphone", should make Virgin Mobile's new Digital Audio Broadcasting/internet protocol-enabled phone, the Lobster 700 (pictured, above), unavoidable. The phone uses technology developed by the Taiwan-based HTC, is powered by Windows and uses services provided by BT's wholesale mobile broadcast entertainment service, BT Movio. The phone features red-button interactivity and an Electronic Programme Guide. So, for £200-plus you can catch episodes of Coronation Street on your phone.
The latest big thing in Japan is the QR code - a centimetre square patch of digitised lines that appear on magazine and newspaper ads, on posters, on vending machines ... You take a photo of it with the camera in your mobile phone, the phone then automatically dials into the advertiser's website, your details are downloaded from the phone to enter you into any promotions on offer. A recent twist is the release of a new version, where, instead of the small-code box, the code can be embedded into the brand logo.
This development doesn't fit snugly into any media discipline, but as consumers embrace these ideas, the marcoms business will too.
Outdoor is getting fancy, with new digital sites making use of Bluetooth technology and online connectivity. The Transport for London win for Viacom Outdoor will mean more updating of the London Undergound estate, with rival companies all upgrading in similar digital directions. But in innovation terms, this is the tip of the iceberg.
The latest developments aren't just about online and interactivity, there's optical illusion, too. The Danish company Vizoo has brought out an award-winning effect - New Format - which was used at the start of the year for the launch of the new Lexus IS.
Created by projecting a specially produced film on to a see-through screen, the results are very realistic, despite being an illusion. Vizoo's latest product is the Cheoptics360(TM) (above). The technique features revolving video images which can be seen 360 degrees in all ambient light conditions. See video teasers at www.vizoo.dk.
The next generation of online games consoles is changing the landscape of gaming and ads for games. The key, as ever, lies in online connection. Brands such as Adidas (pictured) are already making their presence felt in PC games, while PlayStation 3, Xbox 360 and the Nintendo Wii are all built with the internet in mind. In principle, at least, it means that rather than ads being static and fixed, they can be added or removed, or even made interactive. The Xbox 360 is already out there, with its two rivals hot on its heels, although the PlayStation 3 is not scheduled to hit UK shores until March 2007.
In-store has the potential to be a new technology lab, with talk of beaming offers to mobile phones, state-of-the-art scanning and microchip tagging of products. But perhaps the nattiest opportunity is replacing price tags on the shelves with video monitors. In the US, a price-labelling company, Vestcom, is working on producing four-inch wide monitors which would be able to screen ten-, 20- or 30-second commercials alongside the price. As well as being a huge boon for retailers and manufacturers to enable instant price and promotion changes, it clearly opens up a new medium at that vital moment of purchase.