The internet's next step

The step forward in marketing could be a move to bypass the media and towards owning it directly, says Ajit Balakrishnan.

The video starts with a 20-something man cuddling his Labrador puppy.

It then shows the puppy running away with his master’s shoe.

In another shot, they are seen running together in the grass; then, the puppy -- now nearly full-grown -- dives into a pond together with his master.

Then we see, one evening, the young man driving off with a group of his friends, and the dog wistfully looking at him go out of the window.

The sky outside darkens into night and we see the dog whining for his master through the night, and we start worrying what has come of the young man; has something bad happened to him after his night of drinking?

Suddenly, it's daylight, the door bursts open and the young man arrives back, saying to his dog, “I was in a daze and couldn’t drive home last night! I am back!”

The dog jumps joyfully to lick his master all over his face. The video ends with a word from its sponsor, Anheuser-Busch, the makers of legendary American beers like Budweiser, and the video’s message: the owner is a responsible young man; instead of driving home, he has slept it off in a friend’s house and, hence, has arrived home safe the next morning -- so you, too, be responsible, and don’t drive after you have had a lot to drink.

When this video was posted on the internet, it went wildly viral and in its first week has 13 million views. Many viewers re-transmitted it through various social networks with comments like “the new Budweiser commercial got me like (crying)”.

The video tugged at my heart, too, and brought back memories of all the dogs that I have had in my life and the cute things they did when I got home in the evening from work or late in the night from business trips.

No surprise here.

The real surprise to me was what the Anheuser-Busch executive who was making a presentation on the stage at the AdTech Conference in New York last week said next: this heart-string tugging video that has had over 50 million views on the internet, making it one of the most viewed videos this year, has had no impact on Budweiser beer sales online; offline store sales were, in fact, down compared to the same period last year.

He then went on to demonstrate the marketing initiative that his company was doing now with far greater effect on sales: putting LCD screens on the doors of the beer coolers that Anheuser-Busch keeps at retail beer outlets; these LCD screens are connected to the internet, and Anheuser-Busch transmits messages through the internet to these LCD screens throughout the United States, adapting these messages to the geographical location of the store.

The AdTech conference is the biannual gathering of all those interested in advertising on the internet and a moment’s reflection will make you realise the strategic significance of the story: one of the largest advertisers in the world had just recounted a case study that showed that by “owning” media (that is what installing internet-connected LCD screens on beer coolers amounts to), they have found greater impact on sales than by “paying” media (which is what posting a video on popular video streaming sites is) to get them an audience.

It has always been a source of wonder for me that when internet technology first burst on the scene in the mid-1990s, its first impact was felt in the media industry and not in, for example, in manufacturing or distribution.

This path is a little different from the path other technologies have historically taken.

When the possibilities of the steam engine first became evident a series of attempts were made -- by Thomas Savery in 1698, by Thomas Newcomen in 1712 and finally, successfully, in 1749 by James Watt -- all addressing the need to pump water from the coal mines of northeastern England.

From here the steam engine was harnessed to pulling carts laden with coal from the pitheads to the consuming centres, then to the establishment of the passenger railway system, and so on.

It took more than a hundred years for it to be applied to the media -- in the production of affordable mass-media newspapers, when William Bullock used it to drive the steam-driven rotary press for his newspaper, The Philadelphia Inquirer.

In a similar fashion, electricity and wireless spent many years being applied in manufacturing, transport and defence before finding its application in the media in the form of radio and TV channels, and wireless news services.

On the other hand, the World Wide Web found an early home in the media perhaps because Tim Berners-Lee, the man who conceived it, thought of a “website” as a place to store and retrieve information; entrepreneurs seized on this aspect to create “media” websites that showed breaking news and other information; and when users came flocking to these websites found an economic model by charging advertisers to reach this audience.

The Anheuser-Busch case study that I just recounted sounds to me like the next step forward in marketing -- a move to bypass the media (the internet sites that host videos like the cute puppy one, offering them a platform to help them spread “virally”) and towards owning it directly.

Does it mean that advertisers using internet technologies will reach out to consumers directly at the point of sale?

Photograph: Reuters

Ajit Balakrishnan, the founder and CEO of Rediff.com, is the author of The Wave Rider: A Chronicle of the Information Age. ajitb@rediffmail.com