Advertising's Shake-Up

Is it just me, or does it seem like almost every industry is in the middle of an upheaval? Retail is getting the makeover of a lifetime, technology changes every third second, and even the banking industry seems to be morphing at a record pace. It doesn't make things easy for investors like myself, who pride themselves on deep understandings of certain spaces. It seems that another business is undergoing yet another renovation: advertising. We saw this coming, what with the Internet and all, but as the media and content businesses continue to innovate, advertising has been forced to take some sudden turns. How will this affect the future of the advertisers?

The future!
One day in the near future, simple television ads will be a thing of the past. Bob the Enzyte guy will be long retired; Foster, Foster, Foster, Foster and Sons won't be badgering us with a laundry list of mesothelioma symptoms; and maybe, just maybe, JG Wentworth will finally get that cash he has wanted for so long and will go use it somewhere else.

I'm only joking. Unfortunately for my fellow TV watchers, advertisements aren't going the way of the dinosaur, but they are changing quickly.

A company leading the way in advertising innovation is Target (NYSE: TGT  ) . The idea is actually pretty brilliant. In a new campaign, structured around three mini-episodes starring Kristen Bell, everything on the "show" is available for purchase. Yes, I understand this is what they call product placement, but there's more to it here. Online viewers of the ads can click on any of the products in the episode while viewing and they will automatically be added to a Target cart. We all know that things like clothing and accessories always look better on the mannequin/Kristen Bell than they do on us, so this new type of advertising is getting us before we have a chance to reconsider. It's brilliant!

Advertising needs to adapt not only to our migration to the Internet, but to the changing face of content creators and providers.

We don't need no stinkin' advertisements
One of the most disruptive moves in the industry as of late is DISH Network's (Nasdaq: DISH  ) introduction of the Hopper. A year ago, a hopper would only have been a reference to something that helps you pick up tennis balls, but now it's a DVR that actually skips advertisements entirely.

The company has faced enormous backlash from content providers who are worried that the new service will keep advertisers from buying space. Among the leaders of the mob is News Corp.'s (NYSE: NWS  ) Fox. Fox, along with the other major broadcast companies, has sued DISH Network for damaging the fundamental underpinnings of the broadcast television business. To be fair to Fox, it's a valid argument, though with today's technology changing so many industries, it seems this is just one more step in the direction of consumer power over that of the content provider. Advertisers will need to adapt, by doing things like the new Target ad campaign, in order to remain relevant.

Advertisements will always be a part of the Super Bowl, but for your average Thursday night primetime -- which may vanish anyway, given the rise of streaming options -- we may be looking forward to an era of fewer commercial breaks and viewing on our terms. Sounds great to me.

So far, DISH has navigated the legal waters carefully, addressing the concerns of broadcast companies and communicating to judges that what they are doing is well within the bounds of the law and is simply a sign of technological change that some parties are reluctant to keep up with.

Speaking of technological change, it's everywhere. But seriously. In this special free report, our analysts lay out the details on one stock they are sure will benefit from the latest revolution in tech. Read it here.

Fool contributor Michael Lewis owns none of the stocks mentioned above. You can follow him on Twitter @MikeyLewy. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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