Advertising ‘under threat’ from internet of things but marketing and creativity will thrive, says Microsoft’s James Whittaker

The future of advertising is "under threat" as we hurtle towards an internet of things-dominated economy, but marketing and creativity will thrive in this new landscape, according to Microsoft’s technical evangelist James Whittaker.

Speaking to The Drum at IAB Engage 2014 in London today, Whittaker said marketers must “get working on their clairvoyance” and reinvent how they market to their customers, in a landscape increasingly dominated by machine-to-machine-driven information.

“Marketing is all about introducing the value proposition to your customers. When your customers are humans, advertising makes sense, but when you’re trying to make your pitch to a machine – the machine doesn’t care – it’s got the data.

“You can still market to a machine but you must make sure that machine understands your value proposition. And you can’t do it with ads. So marketing is alive and well, but advertising is definitely under threat."

However, Whittaker dismissed the notion that creativity may suffer in this data-driven, machine-to-machine landscape adding that there will come a new generation of creative marketers that must work hand in glove with programmers to unlock the potential of marketing in the internet-of-things ecosystem.

He admitted that Google and Microsoft are the two gatekeepers to this landscape, but added that Microsoft is a “value proposition”, whereas Google is an advertising one, and that its rival is on the path to disrupting its most successful revenue stream.

“Google and Microsoft are the gatekeepers because they have the world indexes of information, so they are well positioned in this as they basically own all the data. Google is an advertising company so they have a problem in the sense that they are disrupting what they currently make money on – they are eating their own lunch. Whereas we will be eating their lunch…it’s always better to eat someone else’s lunch,” he said.

Microsoft will be “at the forefront” of the internet of things environment, albeit alongside many other companies, some of which haven’t yet been invented yet, according to Whittaker.

He urged start-ups to “think bigger”, and that they should be “salivating” at the opportunities that will arise in the internet of things ecosystem.

“When one economy is coming down, and another is rising, that’s where the big companies are made. When the paper economy went down and the digital one went up it was Microsoft, when the desktop economy began to go down and the web economy went up Google was right there. We are at one of those inflection points now – who wants to own it?”

Meanwhile Whittaker also stressed that the app economy continues to suffer from the ongoing lack of discoverability, with many brilliant apps remaining unseen and falling by the wayside.

“This app discoverability problem is what’s killing the app economy. People don’t know about the functionality that is out there. And it’s going to get worse – the internet of things is coming.”

The solution to this is to break away from regarding apps as “nouns” instead using them as “verbs” to reflect their functionality, according to Whittaker.

“Right now apps are nouns, so you have to go out and find them, grab these little nouns and possess them on your machine. But they should be verbs…that’s my prediction for the app model – it will give way to the verb functionality – it’s a functionality market not an app one.”

However, all ecosystems are “doomed eventually”, he added. “The record industry made way for the CD industry, which made way for the MP3 industry, which made way for the streaming industry. That’s why Apple bought Beats by Dre, as they saw the end of the MP3 world. All those models are doomed anyway, as all old models eventually give way to the new one.”

IAB Engage took place at the Barbican Centre in London.

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