 Hi, this is Gerd Leonhardt, media futurist in Basel, Switzerland, with another edition of Gertube today on the topic of advertising. I get asked to speak about this a lot and I really like the topic because advertising is a very crucial part of our business culture and our society. So far, advertising before the internet or even on the first edition of the internet has been mostly about disruption, interrupting people to get messages across so we would see this new car, we would see it on television, on billboards and newspapers and on the radio we would hear about it and eventually we would take a look at it and so interruption was basically the principle of advertising and as the old saying goes 50% of advertising was spent on stuff that we knew didn't work and the other 50 did work, we just didn't know which one. So advertising is already today, it's roughly five from the 50 billion dollar market. If you add marketing and data mining and behavioral targeting and all the other fancy stuff to it, it's roughly about one trillion dollars that include public relations by the way. So you have a trillion dollar budget and what's happening now because of the internet as you can see in this first slide, advertising must go and is going beyond this idea of interruption because basically what's happening is that when we're on the road with our mobile phones, when we're on our iPads, when we're on mobile devices, when we're on a game, on a PlayStation or an Xbox or even on television, we don't want to be interrupted with meaningless stuff that we don't want to hear about. We want to know exactly what is of interest to us. So I'd be much more interested to say, okay, I'm looking for a cruise ship trip in Norway. If I'm interested, I want to hear a clip from a company pitching it, but I definitely don't want to hear about diapers because I don't have kids of that age. So what's happening in a digital society with about five billion people connected to mobile devices is that we can identify every single person. Twenty years ago, this is a scary thought, of course, as well, but twenty years ago, the television did not know who we were. We were all watching the same stuff on television. There could be a hundred people there. Television wouldn't know, of course. Now today, every single television that's being shipped right now, you can connect to the internet. Every single thing that we do can identify us because we log into it. Now we go on television and we use tools like Apple TV or Google TV and we put our data in. And if you check out the Google TV trailer on YouTube, it's pretty amazing how that works, superimposing the browser over the television program and typing and stuff and using my personal recommendation to play really cool videos from YouTube for free, right, and without having cable television. So advertising has to adjust to this. The very fact is that we'll have five billion people, probably sooner or later, six billion people globally identifiable through their data. So advertising can be much more valuable. And basically, most of the big brands will now shift the budget into advertising that's based on engagement and actually connecting with the consumer one by one, rather than like a watering can of garbage that we don't hear about. Seth Gordon, who's a great writer, one of my favorite writers, he wrote, we're moving from an era of finding customers for our products to an era of finding products for our customers. And there's a big difference, right, is that we go to the market and we say like Nike Plus did, you know, the running shoe that connects to the internet. Nike Plus said, what do people really like? They like to run, they like to listen to music, and they go online two hours a day in America, kids go online. So now we connect the two and the running shoe, talk to the iPod, the iPod talks to the internet, and you can publish your running data and you can become part of this global club, right? And that's basically a good idea of finding products for our customers. That's what advertising really is, marketing really is, about making those kind of products. TBWA in South Africa has a great slide you see here, is I think this is the truth, really. Advertising is the price you pay for not realizing the value of building a tribe. In other words, if you're not connecting with your audience, then you have to pay to interrupt them. And these kind of payments are extremely expensive. So on the internet now, we're getting paid for rewarding stuff. For example, the idea of saying, okay, if I'm on Facebook, I have the Facebook app on my mobile, I go to the mall, I log in, I say I'm in the mall, and then Victoria's Secret sends a message saying, today, because you like Victoria's Secret on Facebook, it's 50% off certain collection, then I can go to the store and get this. This is the kind of thing that's going to be extremely meaningful, this kind of advertising fully interactive and based on data, a bit futuristic, but coming right down the road. You see this slide here from Kleiner Perkins, Mary Meeker, one of the most influential people in venture capital and analysis. She says, basically in this slide, it's quite clear the mobile phone and mobile devices beat all other devices for the power of advertising. The efficiency of mobile is much further, the reach is further, the targeting is better, the engagement is better, and it can be viral, which means I can share stuff. So the future of advertising clearly is on mobile devices. It's interactive, it's video, it's games, people love games and advertising in games. It's going to be branded content and those kind of things that we see there. Because as you can see on this slide, what's much more powerful than any kind of advertising is recommendation by others. So if I go to Facebook, I say, I like this car, then 17,000 or so of my fans can see it on Twitter and on Facebook. That means a lot. That's much better advertising and it's basically free. So think about this scenario in the future. We're going to get stuff like, you know, I can watch 100 free movies on Facebook. All I need to do is opt into hearing from a brand I like. So if I like Harley-Davidson, I become a friend, I watch some of their trailers, I do a virtual test drive and then Harley-Davidson will give me the 100 videos a month to watch for free because that's basically the exchange of value, data versus content. So we're going to see a lot of this, of course, location-based stuff, as you can see on this slide. This is crucial. Advertising will become location-sensitive. You know, what's the point of me looking for sushi in London when I'm in Milan? Obviously, the phone would know where I am, so it would give me tamely suggestions. And now, you know, if I go to a big city like Singapore and I want to go out to eat, I don't Google stuff. I go to Foursquare or I go to Facebook, I go to Twitter, I put in Sushi Singapore and I get timely results. In some cases, I've actually seen people have written a review on Twitter and by the time I got to the restaurant, the same people were still sitting there. So their review was real-time, real-life, location-based, advertising-marketing relationships. This is a crucial trend for the future and, of course, social networks are becoming broadcasters of these activities. So the future of advertising is about engagement, not about interruption. If you're in the advertising business, that's the message, but if you didn't know, of course, it's mobile, social, local and video. Thanks for listening and check out my site at mediafuturists.com and I'm on Twitter, G Leonhardt. Thanks for your patience and spread the word.