As Jill goes to watch the shows Mike has teed up, the ad delivery system is poised to take action. The way in which the ads are viewed will be dependent on the couple’s billing preference with the cable provider (yet another yield management variable). They may have chosen the free cable option that requires them to watch ads at set periods. As the show starts, a number of advertisements appear at the bottom of the screen. A couple of these have a dollar sign next to them indicating that they can reduce their cable bill if they watch them. This is attractive particularly since Jill wants to watch them anyway since they are infomercials for a San Diego area spa. She can choose to watch them now or later.

Later on in the evening she checks her email before going to bed. The ad delivery system knows this is the same person who has been watching ads about San Diego area attractions so it serves up some discount offers for packages to San Diego which she emails to Mike with a message about how excited she is about going to San Diego. Who knew that an ad delivery system could enhance marital harmony?!

Will these sort of events transpire five years from now? My belief is that they are largely foreseeable. Undoubtedly, the specifics won’t take place exactly like this, but it’s not a huge leap to get to this place with consumers and businesses that are more than willing to benefit from the experience.

If you buy all or part of this scenario, what does it mean for the parties most financially vested in the ad marketplace – media outlets, ad agencies and marketers? It means further evolution in their business models. Perhaps the most radical impact will be on ad agencies that have already seen their business evolve. In part two, I’ll make the provocative statement that Google will be the largest ad agency in the world by 2010. While this potentially ludicrous notion may not seem worth thinking about, viewing the ad agency business through a Google prism should cause ad agencies and their clients to experience profound insights.

If you want to have more fun with the previous scenario, you can weave in various other variables that include, but aren’t limited to, the following factors:
• Product placement evolution. At one time there was a website that allowed you to buy products that were shown in TV programs. Think about that woven into the aforementioned ad marketplace. This is an evolution of what AdvertisingAge’s Madison+Vine regularly reports on.
• User reviews. User ratings of various advertiser products could become another variable determining which ads get served. Amazon-like collaborative filtering can be facilitated thus increasing content consumption.

Will Google be the biggest ad agency in the world by 2010?
In part one, I laid out a future of how Internet-based advertising models will pervade the TV world. If you buy some of these factors, there are inevitable industry changes that will happen to the ad industry. I will make the provocative statement that Google will be the largest “ad agency” in the world by 2010. While this potentially ludicrous notion may not seem worth thinking about, viewing the ad agency business through a Google prism should cause ad agencies and their clients to experience profound strategic insights.

Dramatic industry shifts usually don’t happen from obvious places. Ample evidence of that exists if you look at various businesses whether you look at the music business, the encyclopedia business, the newspaper classified business, the retailing business or many others. Companies that too narrowly define their competition inevitably have their business cratered from unexpected places. Aggressive, growth-oriented companies whether they are Google or Wal-Mart don’t care about pre-existing industry dividing lines. If it wasn’t them, some other organization would gladly eat away at incumbents’ businesses even though the leaders of the change are attractive “bogeymen” for those under attack.