Broadcast advertising is a dying business . . . as would most of the blogosphere would like to posit. Driven by

1. rise of performance based advertising models
2. legitimatizing of direct marketing (highly correlated with pt 1)
3. shift of eyeballs from TV to Internet
4. TiVo
5. IPTV and associated convergence (brightcove, Google Video, Media Center etc)

I ran across Spot Runner’s press release and Silicon Beat’s coverage the other day but didnt think too much about it until a VC friend mentioned it to me again yesterday. So I took a deeper look at the company, below is an except from the press release

Spot Runner’s web-based service allows businesses to air personalized, high-quality television ads in their local markets. Spot Runner offers a full-service package – commercial production, media planning and ad time – for a fraction of the cost and time of traditional broadcast advertising. A complete campaign can be purchased for as little as $500. In contrast, traditional methods can take weeks and cost tens of thousand of dollars to produce a commercial of comparable quality.

The entire process is automated online, making it cost effective for even the smallest of businesses to use.

My first reaction was “what the hell is a startup doing in broadcast advertising?, a dying business for sure.” The second thought was that coffee has been a declining business since the mid 80’s (and still is) but we all know how Starbucks has performed during that time. As long as the market is big enough, and the idea revolutionary enough, the vision broad enough, declining market is not an issue. Companies with huge business momentum can eventually “jump the curve” and redefine its market as Starbucks has been able to transform itself to be much much more than just a coffee shop (its Cheers for the rest of us). (as Google is trying to do from its search beach head).

SpotRunner is going to be a huge . . . just incredibly huge. . . IF they are able to make a couple of these curve jumps . . .

Fred and Marc Pincus had a debate last week directly related to Spot Runner. In a world where value containing objects are “microchunked” to the nth degree, commoditization might not be inevitable, but PERCIEVED commoditization will be. Consumer will have to rely on BRAND again as an ultimate arbiter of quality since most portion the value creation stack will be similar if not the same. (Brad Burnham has more, as does Umair )

The “success” of search marketing will eventually force the pendulum backwards. I talked about this before here. Jacob Nielson too has highlighted a growing trend to view dependence on search engine as an the only advertising channel as unhealthy. (He uses a much harsher word :) ). In such a world, creating a brand will be incredibly important, but up until now there hasnt been a channel that allows SME to do so effectively until SpotRunner.

SpotRunner is bringing the best of google adwords/adsense to the brand world.

1. Self service
2. Menu(or auction) pricing (all negotiation does is slow down transactional velocity & scalability)
2. Mico-chuncked (buy as much or as little airtime as you want)
3. Integrated production (even john q public can create a adsense ad)

Spot Runner will become an incredible complement (and competition) to any direct marketing efforts. (Read search advertising). Whether Spot Runner will become just another advertising agency or a huge game changer will be dependent on their ability to . . .

1. Move from broadcast advertising towards brand advertising across all channels - IPTV, Internet Video, TiVo etc
2. Add components of whats good about direct marketing - performance, accountability, trackability, and measurement
3. Automate ad targeting and datamining - which includes getting some demographic & behavioral data on their audience

Some of these will only happen if structural changes to madison avenue take place, with Google breathing down its throat, it might just happen. . .

Adding more . . .

Did anyone see this . . .Google Agrees to Buy Radio Ad Company. A spotRunner for radio ads? Worth $1.2B . . . these guys are getting into the podcasting advertising game for sure. . . now they just need an video play. . . see the comment section of John Battelle’s blog (esp Henry Blodget)