Rise of technology

A phrase that Sky executives are fond of using about their company is "permission to entertain". The slogan says a lot about the way the media giant operates.

First, entertainment underpins Sky's content strategy, which is rooted in satellite but is now going great guns online, especially since Andy Jonesco came on board.

But what's also relevant about the phrase is that Sky is a subscription business. Twelve times a year it faces a moment of truth when customers receive their bill and ask themselves whether Sky gave good value that month.

Sky's faith in its ability to manage this process gives it the confidence to slug it out in the triple-play market until it's knee deep in competitors' blood. It helps that its huge SkyView panel gives it a real edge on understanding what TV viewers do.

It would be a simple process for Sky to cross-refer viewer data with log files from its ISP business. It would mean Jonesco could complete a picture of how Sky subscribers view content online, whether his own or that of competitors. But Sky doesn't believe that permission to entertain stretches to this. It's a lesson that the ISPs struggling to sell behavioural targeting would do well to remember.

It would be a great pity if, as well as playing a role in denting Tesco's share price this week, Simon Uwins also dented companies' enthusiasm for corporate blogging.

Uwins, you will recall, is head of marketing for Tesco in the US, and he has been blogging, among other things, about the retailer's foray Stateside with its Fresh & Easy convenience stores.

He happened to mention last week that the retailer was calling a three-month halt to its opening programme. It took the markets a few days to pick up on it, but when they did, Tesco's share price dropped. From now on, market analysts will be paying more attention to blogs, but it will be a real shame if as a result, executives also lose their enthusiasm for blogging.

After all, some companies, particularly in the tech sector, use blogging as an established part of their corporate communications. Google zealously guards the inner workings of its algorithm, but permits Matt Cutts to drip-feed the search sector with valuable insights into how the search giant is thinking. The interesting part is Cutts still sounds like an engineer, so whatever checks and balances Google employs haven't drained all life - and interest - out of his blog.

Tesco's share price will recover, no doubt, and hopefully Uwins' personal stock will also bounce back. But the problem remains: everyone keeps on at companies to be authentic in their digital communications, but on corporate blogs it seems, honesty isn't always the best policy.

Well what do you know? In this week's NMA (13.03.08) we ran a feature looking at the future of online ad networks. Our belief is that as Google and Microsoft build ad platforms that combine reach with segmentation, networks are going to get squeezed very hard.

In the article, Diffiniti MD Rob Horler said it wouldn't take a big leap of faith to say that most big advertisers and their agencies would be getting "bog-standard" ad serving for free in the not-too-distant future. And lo, this morning, the Wall Street Journal broke the news that Google is launching free ad serving with its Ad Manager.

The timing of this couldn't be sweeter, coming so soon after the EU waved through Google's acquisition of DoubleClick. It shows just how serious Eric Schmidt's team is about taking the food from Steve Ballmer's mouth. Google says that Ad Manager will be aimed at the long-tail SME market, a bit like its Google Analytics, but it obviously has the potential to have a wider impact. As one satisfied publisher says on the Ad Manager site: "Ad Manager has already reached a level of competency that rivals the expensive service providers".

Ad serving is going from commodity to free. Google says it has no plans to stop charging for DoubleClick ad serving, but it's now perfectly possible to see a day when this is bundled into big ad deals for nothing. Your move, Microsoft.

It was fun to listen to the Future of Advertising session at this week's FT Digital Media conference. In some ways the panel looked liked they'd beamed in from another planet - seasoned agency types in a room full of money men, consultants and geeks.

M&C Saatchi chairman Moray MacLennan did his best to be provocative. He questioned cherished notions, such as the fact that consumers want to engage with every brand. And as you'd expect, he delivered his message in classic Saatchi style: visually arresting, succinct and non-PC. To show how the ad industry had to adapt he put up an image of Mrs Thatcher with a green mohican.

MacLennan's point was that the industry had to combine the best of what it knew about branding with a willingness to break the rules. Then in the Q&A he made the impish assertion that "search is not marketing".

"When you're putting money into search you're taking it out of marketing," he said. "All you're doing is buying a space on the internet high street. You're commoditising your brand."

So for MacLennan, the activity that represents the majority of online spend in the UK is merely "distribution". His comment was a deliberate fart in the middle of a digital gathering and controversial for an IPA president, considering the trade body established a search group earlier this year (NMA 24.01.08).

Perhaps MacLennan - who makes no secret of his scepticism about digital hype - was trying to bait the industry. But beneath the soundbite, he's right to be provocative.

Back in 2005, Google began a presentation that ended with a casual announcement about ending agency commission by showing the inexorable decline in mass TV audiences. The message was: TV can't deliver the eyeballs any more, so search is the answer. Thankfully, the search giant has moved on, now trumpeting how it's working with 'traditional' ad agencies. Even Google has worked out that search isn't the answer by itself - you need other channels doing the work of putting the brand in people's heads in the first place.

MacLennan isn't anti-search - indeed, he also said he wished he'd got into the industry as it was taking off. But he's absolutely right to question lazy perceptions around it. The faintly pejorative reference to distribution is questionable - if successful marketing is about managing demand, it surely must include an effective distribution strategy. I believe that if you're spending on any kind of branding or PR, search visibility is crucial. But to see search as the be all and end all, or something that removes the need for other forms of marketing, is both limiting and dangerous.

Seen any great digital media ideas recently? I ask because on Tuesday night I joined Scott Gallacher from Sky and Greg Marsh from Index Ventures on the judges panel for the IAB's Digital Innovators event at the RSA in central London.

Eight businesses had to pitch to us ideas that in some way promised some kind of innovation in digital media. The businesses had five minutes each - nerve-wrackingly enforced with an air horn. The judges had the job of grilling the presenters and the audience had the job of voting for a favourite.

It was undeniable fun giving in to my inner Simon Cowell. But the event also raised some questions.

First, the winning idea was pitched at the start of the evening while the runner-up was pitched at the end. Such gap-toothed results could be as much a comment on human attention spans as on the strength of the actual ideas on show.

More fundamentally, I think the reason the voting clustered some saliently around only two ideas was that, despite some polished - and undoubtedly brave - presentations, there simply wasn't much innovation on offer.

Indeed, a lot of ideas seemed to be ways of badging a consultancy service or back-office tools. They were techniques for harnessing communities, or understanding social media, or validating and managing customer records.

While up-to-the-minute, these ideas seemed to me to operate within the game rather than trying to change it.

But if a truly original step-change innovation had been presented, would we have spotted it? Put another way, as I whispered to one of my fellow judges, if Google had been pitching to us ten years ago, would it have won our vote?

True innovation is hard to do, hard to assess and hard to commercialise. That doesn't mean it's not worth doing. Just that there's not very much around.