IAB and PricerwaterhouseCoopers released results of a study on Internet advertising at the MIXX conference this week. The positive trend shows a huge jump in ad revenue (37% over the same period last year).

Quite predictably, Search leads all categories by a wide margin, accounting for 40% of advertiser spending, but that number is the same as last year.

Separately, PricewaterhouseCoopers reported earlier that the entertainment and media sector is growing at a rapid clip, with broadband access becoming more available. But the US is not leading here. Russia and Eastern Europe are growing at more than twice as fast, and Japan will overtake China in 3 years.

The message in all this: while search and online gives us a certain perspective of the advertising and marketing shift, it is part of a lager ecosystem of  the entertainment and media world — a $1.8 trillion market in 2010 — that encompasses everything from IPTV, satellite radio, podcasting, and broadband video, and gaming. All of this is slowly but surely getting more connected, so we cannot think of online marketing as a single dimension.

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Focus groups have been getting a bad rap recently. Bart Cleveland (Small Agency Diary) at Ad Age tells a great story about focus groups, with a twist. Testing a concept with the dreaded focus group, they were pleasantly surprised to find the group gave it a high score, only to have the ad nixed by the client. Why? The CMO didn’t like the idea!

We see it all the time. The idea is ‘internally tested’ by passing it around to important people on the org chart, even though they may not even resemble the audience at whom it is directed. This is not a focus group. (There’s a better term for it: the kiss of death).

Malcolm Gladwell of Cluetrain fame makes the point (check this interview at IT Conversations) in Blink that great ideas are maimed by asking people the wrong questions, citing the the Pepsi-challenge, iPod and the Aeron Chair. The latter failed very badly when ‘tested’ because the focus of the focus group was all wrong, and people didn’t have the vocabulary to describe what they liked, or hated; they therefore made things up. If Herman Miller listened to its focus group’s recommendations, they would have produced a pathetic chair, based on ‘what customers wanted’ he says.

Which brings us back to knowing our audience. Too often marketing is about producing stuff, or going after market share. How about if marketing was all about digging deeper, and asking the right questions?

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Starbucks is getting burned over the all-to-successful viral coupon campaign. Who would have imagined a class-action suit over Frappuccinos! But in today’s media-saturated world, nothing a company does should discount the possibility of how consumers could trump an marketing or PR move. As a now regular listener to ‘FIR’, the Hobson and Holtz Report, I have come to appreciate their point of view on how communications encompasses –permeates, actually– everything companies do, and many of them are unprepared for this. All companies, whether they like it or not, whether they are prepared for it or not, are in the media business, they say.

Starbucks may never have realized –so soon after the ‘Agency.com kerfluffle’– the potential or the dangers when treading a viral path. As many have observed, some companies would kill for this kind of offtake, where your coupon becomes so widely distributed. But they discontinued it, because it had been ‘redistributed beyond the original intent.’ 

We’ve all had coupons passed along to us by colleagues and friends that would qualify as being redistributed beyond original intent. So this kinda excuse is meaningless, in the face of an event that tarnishes all the other good work Starbucks has done by sheer word of mouth. 

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I was somewhat amused to get a customized email from a company, addressing me as Samantha in the opening line. I know the pitfalls of customization, when someone messes with a database before it goes to a variable-data press, and merely deleted the e-newsletter. Didn’t think too much of it, except that I wanted to call the person I knew at the company and tell him to make sure this was not a major booboo.

This morning, I got another, with subject line ‘Who is Samantha.’ Needless to say I couldn’t delete it without checking why. Turns out to be Rod Key, President of R and R Images. "Unless you are my sister," he starts, "chances are pretty good that you’re not Samantha."

After a short explanation of how this happened, Rod’s had this to say:

"Please accept my apology. We all learn from experiences in life, both good and bad. Today’s lesson? The only way to get more attention than the three-pronged approach of sending the Right Message to the Right Person at the Right Time is to get 2 out of 3.

Lesson learned."

Not often does someone at this level of the organization come out so strong, and -minus the spin- say exactly what heppened. R and R could easily have: (1) Pretended this did not happen. (2) Tried to cover up for the error by using a folow up gimmick. What’s the big deal, some would say. To a database marketing company, it could mean a lot. A client’s databases is a valuable asset. But we all know that companies do make Samantha-like mistakes. Terrible ones, in fact. Remember the AOL database fiasco earlier this month? Not often do they own up to it. I tip my hat to R and R!

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Christopher Schroeder comenting on the Gillette (unbranded) site Noscruf.org makes some great observations (that may help put the whole Agency.com viral video fiasco in perspective) about how to talk to your target audience with no ‘branding’, no 30-second spot and no overt PR push, but good old word of mouth. The article appears in MediaPost’s Media section today.

The NoScruf site looks terribly amerturish that may seem counter-intuitive for a company like Gillette, now a P&G company. But that’s exactly what’s given it the viral effect. You could search the Gillette site for the keyword noscruf’ and nothing shows up. Clever! But you could look up the domain owner through a whois search.

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