Death of a Salesman

As video on demand, DVRs, and the Internet give people greater control over the media they consume, many traditional media outlets, including music labels and movie studios, have fought this increasing freedom tooth and nail. But an article I read this morning suggests that the advertising industry has taken a different approach, attempting instead to embrace the new wave of empowered consumers.

The Reuters article, reported from the Cannes Lion advertising festival, pointed to advertisers' increasing attempts to harness consumer-generated content and viral, word-of-mouth marketing in their messages, despite the well-known risks inherent in relinquishing control of marketing and brands.

This effort springboards off the remarkable increase in amateur Web video, easily distributed on sites like YouTube, and the increasing importance of Internet advertising, as people spend more time in online social networking and other Internet pastimes. The Web has created increasing opportunities for consumers to put their own stamp on brands and marketing messages -- and, of course, spread the word in viral campaigns.

The Reuters article highlights advertisers' attempts to get in on the action by setting up shop on News Corp.'s (NYSE:NWS) MySpace.com, an extremely popular social networking site. Some companies have even invited consumers to create their own ads. Engaging online consumers with interactivity is another trick; consider Burger King's rather bizarre Subservient Chicken Internet campaign, which allowed Internet users to watch the aforementioned chicken obey their commands. It had little to do with the chicken sandwiches it was supposed to peddle, but users flocked to the site nonetheless.

Of course, there are some old-school thinkers. A popular amateur video clip making its rounds on the Internet shows that Mentos candies dropped into a Diet Coke can create a wild geyser effect; while the company behind Mentos was delighted by the clip, Motley Fool Inside Value pick Coke (NYSE:KO) wasn't amused. (It's no surprise that Fool Rich Smith called that an idiotic move.) Earlier this year, YouTube users launched the SNL skit "Lazy Sunday" into instant viral fame -- until General Electric's (NYSE:GE) NBC Universal forced YouTube to pull the video from the site, even though it was arguably free advertising. Such harsh reactions doubtlessly fail to create goodwill from consumers.

The music industry may be an especially good example of an industry that hasn't yet accepted the potential benefits of consumers' increasing power. Although the birth of Napster (NASDAQ:NAPS) and the subsequent proliferation of Internet piracy panicked the industry, it's arguable that music labels have benefited from viral marketing for decades. How many of us got our first introduction to a band from a mix tape made by a friend? Such free exposure has often formed on the foundation on which loyalty -- and eventual sales -- are built.

But the music industry has sometimes treated its customers like the enemy; the Sony (NYSE:SNE) spyware controversy was a good case in point. The film industry may be a little bit too inspired by the music industry's often heavy-handed tactics; in negotiating deals for downloadable movies online, it's trying to have its cake and eat it, too.

Industries are often rocked by disruptive influences, but the smart ones can adapt to the ways of creative destruction. The walls between media and consumers appear to be falling, and consumers are becoming anything but passive. In many areas of the media industry these days, old-school thinking just won't cut it.

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Alyce Lomax does not own shares of any of the companies mentioned.