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August 12, 2007

Mass Customization

Computers and the Internet have made mass customization possible. The long tail of goods and services now available to us are a beneficiary of that trend.

Amazon doesn’t look the same way to any two of us (unless we take cookies off our computers). It’s personalized to the books we’ve bought and even looked at; it knows what country we’re in, what language we use, and even our screen size. It presents itself to us in as relevant a way as it possibly can.

Google doesn’t give us all the same response to the same query. It has our query history; it knows where we are and what language we speak. It tries hard to be relevant to us individually.

The WSJ Online (paid service) says “welcome evslin”. When the front page remembers who I am (it regularly forgets even though I told it to remember), it contains information on stocks, companies, and subjects I care about.

In fact many of the newer web services are valuable only because they are configurable to include the people, places, and things we care about.

Broadcast television and radio are “one message fits all” media because of the technology they use to reach us. To the extent the audience is segmented by where they watch or what they watch, some tailoring of ads to audience can be done on traditional broadcast media. But the Internet, e-mail, and even traditional direct mail allow for much more targeting. So that’s where the action is in advertising. The next generation of ads we see – the ads we’re beginning to see now, in fact – are mass customized.

There was a fascinating article in the NY Times last week by Louise Story about the plans of advertising giant Publicis Groupe (Saatachi & Saatachi, Leo Burnett and more) for mass customization of the ads they create:

“The plan is to build a global digital ad network that uses offshore labor to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which advertising message to show at which moment to every person who turns on a computer, cellphone or — eventually — a television.

“More simply put, the goal is to transform advertising from mass messages and 30-second commercials that people chat about around the water cooler into personalized messages for each potential customer…

“Greater production capacity is needed, Mr. Kenny [David W. Kenny, the chairman and chief executive of Digitas, the guy in charge of the effort for Publicis] says, to make enough clips to be able to move away from mass advertising to personalized ads. He estimates that in the United States, some companies are already running about 4,000 versions of an ad for a single brand, whereas 10 years ago they might have run three to five versions. And he predicts that the number of iterations [sic] will grow as technology improves.”

I think he means distinct versions rather than iterations. And I don’t think this will eventually come to television as we know it; instead video will move to the Internet where mass customization is already embedded in the delivery technology.

IMHO, this is a positive development. Both consumers and advertisers gain by better targeting. I’ll certainly glad NOT to see the same old ad a million times. The losers are the broadcast middlemen who have a stake in selling the largely untargeted audience that they deliver with their technology.

Content will go where the ads which support it go (and where consumer ears and eyeballs are). So mass personalization is one of the reasons why content like TV shows and even professional sports will move out of the walled gardens of cable TV, will never really move into the walled gardens of individual cellular networks (but will appear on small screens), and we’ll each be able to enjoy more of exactly what we want – including the ads.

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» broadcast model (r)evolution from NextBlitz
Tom Evslin has a good post up about Mass Customization, referencing an interesting article from the New York Times about mass customization in the advertising space specifically. Tom describes how the transition from the broadcast era to the Internet era [Read More]

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