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Ringside Seats at the Dawning of Digital's Third Age

By Bryan Noguchi

While the convulsive, self-inflicted suffering over at Twitter has been painful, entertaining, and fascinating to watch, I’m beginning to think that most of what we witnessed late last year are just some of the earliest and more dramatic changes in the next-phase evolution of advertising and media. I think we’ll look back on the fourth quarter of 2022 as the dawn of digital advertising’s “Third Age,” and here’s why.

Most of advertising’s evolution has been the story of creation and cohabitation: Radio didn’t displace print, and even television (though dominant) didn’t result in the elimination of print or radio. Media has had an uneasy history of adversarial symbiosis, where the major paid channels inflicted relatively little damage upon one another, always finding an equilibrium to ensure that they collectively continued to exist.

Which is why none of them were ready for the Digital Age. Digital media is ravenously efficient. And because it’s also insatiable, no morsel is too small to leave behind for a potential competitor. Digital has accelerated the evolution of paid advertising and can not only rightfully be described as having its own “era,” it’s also an era whose path can already be broken into distinct periods despite its relative youth. Each period has had its dominant species, enabled by a superabundance of specific resources. And unlike previous advertising evolutions, each period within the digital age has ruthlessly strewn significant casualties in its wake.
Is it possible to learn from recent history to help us predict what might come in this emerging Third Age?
Let’s give it a shot.

Digital’s First Age: Modems and Moore’s Law

This was the age of ever-increasing computing power, but also of glacial modem speed. The most compelling audio content of this age was literally the sound of, “You’ve got mail.” Still, some megafauna emerged in the form of AOL, Yahoo!, and the like, and they battled it out for our attention. In the end, most withered at watering holes of comically small bandwidth, and started to die off.

Like the tiny underground mammals that inherited what was left of the dinosaur world, email and search were the humble survivors of this first digital age. They proved to be foundational to every period since. (Oh, and it turned out those little buggers liked to feast on magazines and newspapers — didn’t see that one coming.) One other notable survivor from this period also ate up nearly all the world’s bookstores, I guess so we wouldn’t have anywhere to buy magazines and newspapers in the first place.

Digital’s Second Age: Bandwidth, Mobile, and the Rise of Social

Chatrooms begat Friendster which begat Dogster and indirectly spawned … MySpace. But it took the iPhone to make YouTube, Facebook, Twitter, and TikTok the dominant vehicles of this age. These players, together with virtually unlimited bandwidth, just about killed off television. In their avarice, the social platforms managed to almost destroy western democracy, and have played so fast and loose with their users’ data and privacy that they may have actually forced nations to legislate their doom. Which by the way, happened largely at the behest of said platforms’ users, who in the meantime voluntarily walled themselves into increasingly harmful echo chambers, which turned them into rabid militants representing nearly every interest but their own, truth, and social harmony. It’s a race that isn’t over, and the platforms may yet succeed in destroying themselves without outside help.

While a lot depends on what the major social platforms evolve into, this is not a consumer product/service apocalypse, but rather, an ad spending vacuum that will need to be filled. Advertisers withdraw from controversy as a matter of course, and consumers tend to have a far higher tolerance for this so long as the experience remains virtually free. The major question is whether the social platforms as we know them are compelling enough for someone to pay for them in exchange for no ads: You’ll still have the opportunity to put your pet pictures on the platforms, it’s just that brands may not be underwriting it anymore.

Even though this age isn’t quite over yet, I’d guess that most natively rich content sites (YouTube, Twitch, TikTok), and email, search, and Amazon will survive largely intact.

Digital’s Third Age

Even though my New Year’s hangover is finally pretty much over (that only took a month!), there’s still enough of 2023 left to ponder what will define this third digital age, and to think about where we should place our advertising bets.

There are a lot of directions this could go, but I believe we’re headed into a period that will emphasize commerce and content creation, where both professional content creators and regular people will focus on monetizing their personal brands, opinions, and content in exchange for their attention, approval, and/or implied endorsement. I think perhaps that the social platforms will (in retrospect) look like unnecessary middlemen as brands and advertisers seek out deals directly with potential influencers. What had been social media advertising will start to feel like a hybrid model sharing characteristics of display advertising (a minority of media investment) and product placement/influencer marketing (a majority of that investment).

The winners of this third age? I’m thinking maybe Twitch? Perhaps Amazon and some (U.S. government-approved) version of TikTok? Or the Amazon version of TikTok, which apparently is in beta right now?

There are some unanswered questions and more than one Darkhorse. For example, Meta, while not “too big to fail,” is probably too big to just roll over. Will Oculus prove to be this age’s iPhone and propel the metaverse into being? Or has it already lost? (I bet the former virtual real estate moguls over at Second Life may have an opinion on this.)

And then, where’s everyone’s head on AI chat, like Chat GPT? What if digital advertising goes mostly native, with content created dynamically by bots based on context and audience? If this is the case, keep an eye on companies like Taboola and Outbrain.

Predicting the future is fun! Let us know where you think it’s headed. Tune in next year to see if we got any of this right!