Where advertising struts and frets its 30 seconds

Advertising has come a long way from its humble origins. Where in the past, commercials were merely a tool to increase consumer awareness of a particular product, these days, commercials are being developed and created to entertain and amuse more than anything else.

Consider one of the most popular recent commercials, 'The Man Your Man Could Smell Like' by Old Spice. This award-winning and hugely popular ad not only catapulted an NFL has-been (Isaiah Mustafa) into pop-culture, but also redefined what was previously seen as an old person's hygiene product to a new generation of consumers. And all this was achieved with a commercial that really bore no relevance whatsoever to the product being advertised. But you can't argue with the facts. Nielsen data provided by Old Spice shows that Old Spice body-wash products were up an astonishing 107% in the two months following launch of the campaign and the video going 'viral'.

I want to explore some of the changes in advertising using the example of a site I have set-up called vidlounge.com.

To continue our story: one of the highest rated ads on vidlounge.com's Super Bowl 2011 competition is 'Darth Vader Jr' by Volkswagen. The ad features an adorable child dressed up as Darth Vader who's trying, in vain, to use 'the force' on everyday objects. Of course the child is not successful, until he tries it on the family car – a Volkswagen no less – and the father uses his electronic key to unlock the car. While there are no statistics that quantify the success of this ad, there is no denying the global appeal and popularity of the commercials. The obvious question then, is how do these campaigns work?

The theory behind this kind of advertising is similar to a supermarket's business plan: high volume, low margin. A supermarket makes its money by selling huge quantities of very low-margin products. The same basic theory is true for these campaigns in that the main aim is to gain huge exposure and popularity of the commercial itself. The theory goes that, statistically, the more exposure a commercial has, the smaller the percentage conversation rate is necessary to make the endeavour profitable. This contrasts with more targeted campaigns that are only exposed to a relatively smaller number of people in the hope of converting a higher percentage to actual customers.

This is where social networks have become incredibly important in the next generation of advertising. Targeted advertising is being taken to a whole new level on by social networking sites like Facebook. The campaign strategies offered by Facebook are really like nothing we've ever seen before. Companies are able to tailor specific ads (for the same or different products) to certain users based on their demographic data. For example, a company like Coke may be looking to launch a new product to 18 – 30 year old males living in the eastern United States. Facebook establishes ad campaigns that allow companies to specify who will see the ad (i.e. only 18 – 30 year old males in the eastern US) thereby assisting Coke in ensuring it isn't wasting its money on consumers who they aren't targeting.

So why is targeted advertising so important when Old Spice has been so successful with its untargeted commercial? The simple answer is because it isn't easy to make such a successful commercial. Consumers are fickle and they're wary of the obvious ulterior motives companies have in 'entertaining' through ads. The only way for an ad to go 'viral' these days is for it to be so novel/unique that people are prepared to accept that it's blatant advertising; a very difficult proposition.

And what does this mean for the future of advertising? In the short-term, I expect to see a continuation of the targeted ad campaign trend as companies gain more and more access to consumer details online. Those companies that, for whatever reason, don't go down this path will need to find increasingly novel ways to advertise. For example, a company might launch a competition for users to create their own ad for a product and win a prize if their ad is chosen for the campaign. The medium-term will see a complete revolution in advertising as we know it. Ad campaigns will become ever more intrusive as technology companies use advanced recognition software to identify consumers. We've all seen this sci-fi technology on movies like Minority Report, where facial recognition software allowed ads to be delivered directly to a consumer as they were strolling through a shopping centre. This technology is currently being trialled in Japan and while not as advanced as that in the movie – the software can only recognise basic information like gender, ethnicity and approximate age – it won't be long before our eyeballs are being scanned so ads can be delivered in line with our personal preferences, religious beliefs, dietary habits and any other information that may impact on our shopping habits.

Of course the main concern with this form of advertising is privacy. Obviously – and justifiably – consumers will be concerned that their personal information is up for sale to anyone and everyone who can afford it. Naturally we can expect regulation around this kind of information, but much like the internet, it will eventually be accepted as a normal part of your shopping experience. And what about the long-term? There's only one serious answer to that; who knows!