We are in the middle of a frenzy created simply by a few dollars shifting from traditional media to interactive. We are seeing acquisitions with silly valuations, talent wars, agency consolidations and more importantly agency transformations galore among the service companies, media outlets, and technology vendors that stand to gain from this shift. You all have heard reports of agencies refusing to participate in RFPs or even turning down real work because they don’t have the folks to staff the projects.

I predict an unexpected tsunami of work is on the way which the Interactive industry and infrastructure will not be prepared o handle.

Consider this, over the past three years a popular retailer that I’m close to (but wont divulge) who’s annual media budget has hovered around $200MM dollars had shifted from 2% to 4.5% to interactive. For him “this digital thing“ has come of age, and today he and his team are debating whether it should represent 11-13% of their total spend as they do their planning for 2008.

For those of you doing the math that means one marketers contribution to the digital pot has a bit more than doubled in the past three years. At their conservative estimate they will more than double that in 2008 alone. In this marketers’ mind it’s not such a big deal “so I’m shifting 5% of my budget to something that’s proven now”. To the marketer its’ only 5 points, to the interactive industry it’s 100 points which is BIG.

This bodes well for all of us in the industry right? My thinking is when the tidal wave hits two things can happen you may drown, or float and rise with the tide. Are you ready?

Excerpt form (Part 1) I predict an unexpected tsunami of work is on the way which the Interactive industry and infrastructure will not be prepared to handle.

I believe almost every agency today, which is fully committed to or just starting to dabble in digital media is struggling with delivering mistake free work on time with any consistency. I can’t tell you how many complaints I hear from clients about their respective agencies on this subject. One example of a woman who recently said to me about a small shop she was working with in Boston. “We loved those guys, they were very creative but they kept screwing things up and could not get the work out of the door”

Whoever can figure out how to scale efficiently, but still continue to evolve and improve the level of creativity and technical skills that the client is demanding will be in a great position to take market share from others. The traditional creative agency playing interactive, or the “creative only” digital shops will be the least likely to succeed in this scenario. To be successful agencies not only will have to fair well in the talent wars, they will have to perfect and automate the operational aspects of online marketing. This means they will need technology skills, delivery process expertise, and global distributed delivery capabilities and experience that they simply don’t have. In an earlier post “Can Interactive Agencies Scale?” I explored this subject in more detail, and one of the conclusions was that whether they could or not clients are demanding it.

The moment of truth is coming for many agencies, and it starts the second the client asks:

1. “Those are very creative ideas, but could you show me what you have actually produced?”
2. “Did you do that yourself?”
3. “How long did it take, and how much did it cost”
4. “Have you handled 20 or more of those projects per month for any one client, and can I talk to them to see if they are happy with your agency?”

I guess the point I’m trying to make is that at some point the bullshit runs out, and you need to show your client that you know how to do the work. Ideas are cheap, realizing those ideas is where the real magic happens.

This past week, my son returned to school from summer vacation. As the old adage goes, I told him, “Tim, you never have a second chance to make a good first impression.” We can apply this to media planning and buying. As an industry, we have spent much time on how we measure impressions. Between the early days of the iABC auditing to the standard IAB definitions we all seem to live with today, we have become very good at purchasing impressions. Then, determining between DART or Atlas or BridgeTrack how many impressions we “got” for our marketing spend. We have built databases of response rates, agency rate structures, traffic groups to send html code, report generators all around how we purchase impressions. I think we have taken our eye off the ball somewhat. Has technology taken some of the creativity from media?

One could define mass media as targeting a group larger that can sit in one place at one time. Being that I am from Michigan my reference point for this is always the Big House, the University of Michigan’s football stadium. However, by just purchasing impressions online, we have fell into the trap of fooling ourselves about mass customization. We believe via behavioral targeting, demo targeting or other means that we are creating a true targeted experience for consumers when in fact we are simply practicing mass customization. To make a true impression online, we need to focus on the consumer and what they want – how do we create a good first impression and start a relationship?

The second thing I talk to my son about on his first day was the Golden Rule, “Treat others as you would like to be treated.” We all know that personal true two-way communication with consumers is expensive. Typically, this type of selling is set aside for high value items like homes, yachts, jewelry, luxury cars and such. However, can we create an environment by which we can bridge the gap between mass customization of content and having a one to one relationship with the consumer? We believe this is possible if your focus is on how to really make an impression.

As an industry, I think we need to think about how do we fit the content and channel to the message and device. Do we make it easy for consumers to interact by placing short codes in all of our print ads? This seems to be one of the most logical things in the World to do especially in publications like USA Today where I would be willing to bet the ownership of cell phones and the readership of that newspaper is almost 100%. Or, making sure the message and content fits the occasion or venue. As one of my old clients once told me, “Any CMO that has his face to the CEO by default has his rear to the consumer.” A few simple steps can make sure you don’t’ just purchase impressions but help make them.

Let's examine focus group research, this so called qualitative research tool places paid constituents in a laboratory setting and asks/observes their attitude towards a product, service, concept, advertisement, idea, or packaging. It's meant to replicate what these so called consumers would do in a natural habitat as opposed to the lab rats that they are. More often than not, people will just try not to sound stupid, string together a few coherent sentences, collect their check and be on their way.

Most importantly --- what people say they'll do and what they actually do are very often two completely different things. Offline marketers have to rely on "asking vs. observing," online marketers have the opportunity to observe more often than asking. For Interactive Marketers, observing what people do on the web in their natural habitat with firms such as comScore, provides more meaningful insights, rather then observing through one-way glass.