Digital Advertising: Surviving the Teen Years - Tom Phillips-Microsoft Advertising

By most accounts, the first internet ads appeared around 18 years ago, in October 1994. The ads weren't much to look at…more a curiosity than anything else. In fact, in a recent blog, John Battelle dug up an image of what he says was the very first banner ad that appeared in HotWired:

Little did anyone know then that these annoying ads would signify the birth of what is today an $80BB+ global industry. We've come a long way since those first ads appeared. Compare them to the digital ad experiences the industry is creating today and the difference is striking. Here's an example of what Microsoft Advertising is doing on the Windows 8 Ads in Apps canvas.

To learn more about our Windows8 Ads in Apps experiences, clickhere

But as fast as the digital ad industry has grown, as many people as it employs, and as sophisticated as it has gotten – the industry is really still just a "teenager."

As the father of two teens myself, I am struck by the similarities between teenaged peopleand this teenaged industrywe work in today.

Like most teenagers, our industry is gawky and not entirely comfortable in its own skin. We're not really sure what we want to be when we "grow up" -- yet we seem to be in a race to get there. Moreover, the definition of "there" seems to change every month. But if you step back, you realize that we actually have come a long way in a relatively short time. Online advertising has already lapped newspaper advertising, and as of this year, 38 percent of US households have at least one TV connected to the internet. For a gawky teenager, we're growing up fast.

Walk into any teenager's bedroom and odds are that you be struck by how messy it is. Our industry is similarly messy. We operate in a world filled with thorny issues, like: Who owns user-generated data? Is there a uniform response to the DNT signal? How do we convince consumers of the value of an ad-funded digital ecosystem? None of these issues are perfectly clean, but there is value to be had when we navigate the obstacles, exercise our brains and build grey matter. We should embrace the mess -- rather than sweeping it under the rug -- and use it to get stronger and smarter as an industry.

Finally, teenagers of course make mistakes. But as a parent you avoid the temptation to say "I told you so" because you realize that you were once, well, a mistake-prone teen yourself…ahem…

…and that is how lessons are learned, sometimes the hard way. No one in the digital ad industry has it all figured out. Every company in this industry, in some way, has made a big bet that didn't pan out, created a "revolutionary" product that never revolutionized anything or hitched onto an emerging trend that didn't materialize. The teen years are characterized by trial and error. But these mistakes -- big ones at that -- are what continue to build our industry.

So as we mature past this gawky, sometimes chaotic teenage phase, what's next? Our 20's of course, where "real" adulthood starts. A person's 20's are characterized by formal education, their first real job and lots of other firsts. You're still learning from mistakes and finding out what you do well, where your passions lie and how to turn your aspirations into reality.

I would like to think that our industry's 20's will be an era where the lessons we've accumulated will start to give us more clarity, structure and stability.

We'll see more ad and content innovation in areas that even just a few years ago were uncharted territory, like touch, sensory, and voice activated advertising.

We'll see greater emphasis placed on user-centric advertising, not necessarily top-down and brand driven. We may even see – perish the thought – more programmatic decisions made in which the best ad to show a consumer may be no ad at all.

We'll see more industries follow the U.S. automakers' lead and not just consider digital advertising as an add-on, but as a "must-have" in order to engage consumers, sell products and build brands.

We'll continue to push the boundaries of conventional wisdom and blow up the myth that consumers live in our purchase funnel. They don't. The linear funnel is dead – digital advertisers live in the consumer's multi-dimensional world today, not vice versa.

We'll see more companies partnering with each other to deliver products and services to the marketplace instead of trying to do it all themselves. This partnership philosophy drives much of what we do at Microsoft Advertising, such as bringing in the creative community early to imagine potential ad experiences on Windows 8 before the platform even launched.

We will – I hope -- see the collision between privacy champions and the ad industry move from divisive rhetoric to progressive engagement that benefits both consumers and the ad business. It will happen if we continue to evolve and mature as an industry.

For me personally, writing about things that I think are interesting about our business – both inside Microsoft and within the industry in general – is my way of contributing to the discussions that are taking place, and that I believe need to take place in the future. In posts to come, you'll see a deeper dive into areas that we are particularly intrigued by here at Microsoft Advertising, and I will also use this forum to break news when we have it. So, as they say, "watch this space."

It was either Ralph Waldo Emerson or Steven Tyler, I can't determine which, who said "it's not the destination but journey." In the digital ad business, we're still in our teenage years. But as much fun as they've been, I'm even more excited about how the journey into our 20's is shaping up.

Tom Phillips is Senior Director of Communications for Microsoft Advertising. In this capacity, Tom has global responsibility for external communications and Public Relations for the Microsoft Advertising Business Group (MSA BG). Follow him on Twitter at @tphillips59.