Among the things he said in the now-obligatory 2005 Stanford University commencement address was that you can only connect the dots looking backward. I’m certain this is true of Jobs’ impact on history. As much as he’s eulogized in the coming days and weeks, his real influence will only be understood when we look back on the changes that occurred during his lifetime, and the role he played in leading so much of what redefined the relationship between human and machine. The details are unimportant.

A few months ago I attended a seminar at the 4A’s that examined the emerging role called “creative developer” in marketing agencies. I was overcome with déjà vu and nostalgia – I had this discussion – albeit with fewer people – in the eighties, as a game developer, and again in the nineties, as an interactive designer, about how “coders” could also be “artists” – and how this combination was going to be really important once the world catches up with the vision of computing and media fully converged. I now realize that Steve Jobs was the father of creative developers, and everyone who ventures to pick up that mantle can trace their roots to him.

The technology world will want to claim Jobs’ legacy. Technology has always valued its visionaries, its Bells and Edisons (even if some of them, like Tesla, never got their due). But Jobs changed the media world even more than the technology world. He revolutionized music, film, games, even print with his inventions. He changed our culture. He made computers important to people, and vice versa.

The world’s in a new phase now. Big shoes are empty.

Some might assume it’s impossible to do much to stimulate demand while unemployment is high and wages are stagnant. But consider the words of Federal Reserve Chairman Ben Bernanke: “Even taking into account the many financial pressures that they face, households seem exceptionally cautious.” Bernanke’s assessment is reportedly based on analysis of economic models that look at historical patterns, and that research is saying that lack of demand isn’t just a consequence of high unemployment, stagnant wages, or housing woes…there are also psychological factors holding back consumer spending, inhibiting demand, and trapping us in a downward spiral. Apparently, even the 5 percent of Americans with the highest incomes – which currently account for 37 percent of all consumer purchases according to Moody’s Analytics – are spending less than they could to rekindle growth, spooked by things like wild swings in the stock market and bellicose political dialog in the U.S. and Europe.

Fortunately, there’s a proven method of generating consumer demand by addressing psychological factors. I speak of advertising, which businesses have used for decades (centuries really) to persuade reluctant consumers to spend, even unwisely, on goods and services. Of course, like consumers, businesses don’t like to spend on discretionary items like advertising if they lack confidence in the results because of the economy. They need some stimulus to help convince them. Hence my proposal: a tax break on advertising – media buying to be specific. Make all media spending by businesses fully tax deductible for six months. This will allow business to increase advertising output without increasing budgets, generating jobs almost immediately in the media and related sectors. More importantly, it will persuade those consumers who could afford to spend more to do so – on cars, travel, real-estate, clothing, luxury goods – putting their sinking dollars to good use while bootstrapping the virtuous cycle of hiring and spending.

Consider the benefits. First, as a stimulus, it’s targeted directly at the demand problem, putting it into the hands of domestic private-sector professionals in the advertising business to solve. Second, it’s relatively cheap. Media spending in the U.S. was about $131 billion in 2010 according to Kantar Media, so foregoing tax receipts on six months’ worth would probably cost the government less than $50 billion, in contrast with the $447 billion the President has proposed to spend mainly on payroll tax cuts. Third, it would generate returns almost immediately, in contrast to programs such as infrastructure and education. And fourth, there are federally sanctioned measurement regimes in place, certified by the Congressionally authorized Media Ratings Council (MRC) which accredits independent methodologies that can be used to control fraud. (In fact, Nielsen just received MRC accreditation for its new Online Campaign Ratings for digital advertising campaigns which should also make advertisers more comfortable investing in online media while helping America build on its lead in digital innovation.)

I know what you’re thinking. The upcoming election year is the first presidential race since the Supreme Court overturned spending limitations and opened the floodgates on political advertising in its landmark Citizens United decision of 2010, so our media universe will already be saturated with as many ads as the public could possibly endure – most of them likely to reinforce themes contrary to economic optimism. That could be a problem. On the other hand, perhaps it will make us more receptive to positive messages from brands, which may seem like a breath of fresh air in contrast to the high-decibel debate that’s bringing us down and keeping us from shopping. In any case, even with the political advertising windfall, our media business could still use the help. How about it, Washington?

Beyond the short-term, these events are also adding fuel to a long-standing debate about spectrum use. Seeking to head off what the telecom industry has predicted could be a catastrophic shortage of bandwidth for mobile broadband services facing skyrocketing demand, the FCC has asked Congress for the authority to reclaim up to 120MHz of spectrum currently licensed to television broadcasters. Broadcasters are concerned about this, to put it mildly, and have been lobbying intensely to protect broadcasters’ control over spectrum. One of the broadcast industry’s key initiatives in this regard is the Open Mobile Video Coalition which seeks to convince the FCC to mandate the inclusion of TV receiver chips (based on the ATSC-M/H mobile television standard) in all mobile phones sold in the U.S.

On August 25, the OMVC issued an open letter to the FCC citing the earthquake as evidence of “the crucial importance of Mobile Digital TV during emergencies:”

“Wireless networks simply are not now, and never will be, in a position to deliver the sort of ubiquitous, bandwidth intensive information during a time of crisis that broadcast television and Mobile DTV stations delivered on Tuesday. Merely allocating additional spectrum to wireless networks will not enable them to do so. Cellular economics do not allow for the massive buildout of network infrastructure that would be necessary to support the large call and data volume that invariably is triggered by mass events of this nature.”

This declaration echoes conclusions from an earlier study sponsored by the OMVC which said,

“…the cost of providing video broadcasts over the cell networks — even 3G and 4G networks — is prohibitive because the unicast nature of these networks was not designed to serve broadcast-sized audiences simultaneously …”

Did you spot the rub? It’s “unicast.” And here’s where the engineers run away with the argument. IP multicast is the internet’s general answer to more efficient live streaming, but applying it in mobile circumstances is problematic. For those interested, the difficulties are outlined in an Internet Research Task Force paper, but they boil down to problems with handovers between cells and related issues. Among the paper’s telling recommendations, however, is this:

“Integrate multicast listener support into unicast mobility management schemes and architectural entities to define a consistent mobility service architecture, providing equal support for unicast and multicast communication.”

In other words, merge broadcast capabilities into Mobile IPv6 so that service providers can operate and optimize a single integrated transmission channel.

The carriers, for their part, are generally unenthusiastic about putting ATSC DTV receiver chips in mobile devices: not only do they raise device costs (which are still largely subsidized by service providers) but they presumably encourage a mode of free usage that doesn’t boost ARPU or reduce churn. (Some have made the counterargument that such usage could relieve data network congestion and even provide a gateway to paid mobile video services like Verizon’s V-Cast by stimulating mobile video viewing in general.) Still, they also want that spectrum.

Consumer demand for mobile TV has been, shall we say, cool as evidenced by the failure of Qualcomm’s FLO TV service which sold its FCC spectrum licenses to AT&T and suspended service earlier this year. Although the broadcast lobby is strong, it’s probably not strong enough to win any public subsidy for mobile TV in the current economic climate. And the FCC’s visionary National Broadband Plan which includes plans for spectrum reallocation is currently as paralyzed and embroiled in partisan politics as most matters of public policy in the U.S. today, with House Minority Leader John Boehner describing it as “a government takeover of the Internet.”

So what can we conclude from all this? First, it’s going to take a long time for the FCC, Congress, and the competing factions to sort out the mandates for mobile broadcasting (IP-based or otherwise). Perhaps this is for the best as it will take some time for innovations like cognitive radio to make their way to marketplace, and massive changes in spectrum allocation are not to be taken lightly.

Second, until we can get this sorted out, I’m keeping my battery-powered AM/FM radio handy for the next emergency.

For those unfamiliar with Canoe, it’s a start-up spun out of CableLabs in 2008 by the six largest U.S. cable operators with $150 million in funding and a mission to develop a national platform for next-generation advertising technology to be shared by its cable operator owners. This has proven to be a tall order for a number reasons – diverse (and often anemic) legacy technology, internal competition among owners, skepticism on the part of both agency buyers and content providers, privacy issues and general industry recalcitrance to name a few – but the biggest challenge in my view is that the cable TV industry has a bad case of the innovator’s dilemma, and Canoe has apparently positioned itself on the wrong side of the coming gulf of disruption.

You’ll recall that Clayton Christensen in 1997 described a pattern in which successful companies continue to invest in “sustaining technologies” that offer incremental improvements to their product lines – and steadily rising prices – until, often suddenly, an inferior, much lower cost disruptive technology would appear that was just good enough to take over the market and kill the superior high-priced incumbent.  A key observation was that this would often happen not because management was blind, foolish, in denial or just didn’t get it. Instead, it happened because, in most corporations, especially public ones that must report quarterly earnings, it’s really sales bringing in revenue that calls the shots and it’s almost impossible for even the most prescient and powerful strategic leaders to kill a profitable product line based on a suspicion that it’s about to be disrupted. Until it’s too late.

Back to interactive advertising on cable TV. The cable industry clearly sees what’s coming: IP-based video delivery is bound eventually to disrupt the fixed multichannel tiered packages cable (and satellite and telcos) sell today, at which point a new interactive or addressable TV advertising edifice built on 10-year-old legacy set-top box technology and cable-specific standards will face instant obsolescence.  But disruption of cable service packages is not really the cable operators’ biggest problem – it’s much more of a problem for cable networks and their media company owners accustomed to getting paid by the operators for channels that few people watch, because they’ve been bundled with the channels people do watch. This has been a bone of contention in the industry for a while, and at least a few major cable operators, who also happen to also operate the broadband ISP services poised to disrupt their TV business, might be perfectly happy to simply raise consumer broadband pricing for cable cutters and leave the acrimonious licensing negotiations to the likes of Apple, Hulu, and Netflix. Except for one thing: none of them wants to be a “dumb pipe.” Programming gives cable services differentiation, and keeps them from being a commoditized utility, competing with telcos on little more than the price of a fast connection. They need a way to differentiate.

Seen in this light, Canoe Ventures might yet be a source of competitive advantage for the industry. There’s a myriad of ways a service provider might offer more value to both consumers and advertisers across digital channels, once one gives up on legacy set-top hardware, embraces the Internet innovators, and looks toward the longer-term future. <Insert research plug here.>

Unfortunately, that’s not the way David Verklin seemed to see things, at least in some of his more memorable public pitches. I recall his address at a NewTeeVee conference in 2008 in which he emphatically declared,

“…don’t count out the traditional television business. […] Believe me, we get it. We’re not sitting idly by. We’re not Neanderthals and we’re not Luddites. We intend to turn the television set into a platform called ‘television.’ And we intend to give display advertising on the Internet, for one, a run for its money. Or maybe it’s a run for our money.”

Well, many heard these as fighting words. The problem wasn’t that TV wanted to compete for digital advertising revenue. To that, most say “bring it on.” The problem was that “the TV set” (as Verklin personified it) wanted to isolate its ecosystem from the Internet. And this wasn’t just talk – it was etched in a system of non-Internet standards that would compete with online video and other Internet standards for mindshare among advertisers and developers.

Verklin liked to emphasize the scale of Canoe’s vision, citing that Canoe’s owners represented 60 million American cable TV households. Of course, the global Internet doesn’t consider that a very big number. 750 million Facebook users, 1 billion monthly visitors to Google, those are big numbers. 100 million media tablets and 600 million smartphones are also big numbers. So big, in fact, that the cable industry has put some real wood behind its TV Everywhere efforts to make sure that its customers can use its services to access their paid-for programming on any connected device, anywhere (almost).

TV Everywhere is a sound response to the innovator’s dilemma: it builds a path beyond legacy infrastructure and gives the industry a great deal of flexibility to deal with over-the-top alternatives to conventional cable TV packages that will accommodate new devices and usage patterns. Unfortunately for Canoe 1.0, CableLabs standards for “advanced advertising,” designed to accommodate twenty-year-old disjointed headends and weak STB hardware, are unlikely to find much support on all these shiny new connected screens – even the ones that call themselves “connected TVs” – and will most likely wind up collateral damage.  Canoe 2.0 should plan accordingly.

Examples of non-advertising projects were abundant: McKinney showed an online RPG game designed to help people empathize with the homeless. Scott Roen of American Express showed how its OPEN platform fostered job creation by supporting small business. Gary Koelling of Best Buy talked about the significance of opening APIs. Kati London of Zynga (formerly Areacode) showed a variety of games with social and safety themes. At one point I asked Andy Hood, Executive Creative Development Director at AKQA who was describing the relationship among agency functions with creative technology in the middle, about the role of media planning, which appeared nowhere in the mix. His response was telling: he looked slightly perplexed and then said, “you mean, for advertising projects?” These were clearly not central to the business, and the related issue of close integration with the analytics department was still on the roadmap.

Andy Hood’s team structure presentation was also relevant in the light it shed on the relationship between “creative technology” (or “Creative Research & Development” – CRD – as AKQA calls it) and the traditional enterprise technology function, still known in some parts as “IT”. Creative technology at AKQA, as, I believe, at most ad agencies (pure-play digital shops notwithstanding), started in the creative department, and only more recently has begun interacting with the “technology” department.

I found a surprising number of IT people in the audience. I spoke with several of them – most were employed by large ad agency holding companies to support specific offices or account teams – and confirmed a theme I’ve been observing for a while: they are struggling with this transformation. Creative teams often look for ways “around” internal IT – and, yet, making “marketing platforms” often translates into unfunded mandates for IT. Issues of IP ownership and codebase continuity, maintenance, service levels, multiplatform QA, resource provisioning and so forth – areas usually more familiar to IT than creative – are difficult to fund as overhead in a fee-for-services advertising model, which is still how things still tend to get structured, even at digital agencies building marketing platforms.

This disconnect is reflected in background economic trends as well. Most analysts agree that, although marketing budgets are on a long-term upward trend, advertising’s share of the marketing budget is shrinking – although it’s still large – while direct marketing, PR, and sales promotion’s shares are growing. Digital, to the extent it’s considered a separate budget category, is certainly growing the fastest – and, on the agency side, where it is broken out, digital is now a major contributor to revenue, even at traditional agencies (at CreateTech Trevor O’Brien, Creative Technology Director at McKinney, noted that digital now accounts for 40% of that creative agency’s revenue). But where is this digital spending coming from? The lines are blurry.

In a few years I believe it will be a rare ad campaign that doesn’t include some sort of direct response mechanism (mostly enabled by mobile devices) as well as a social element to attempt to generate earned-media buzz, virality, and support for low-friction embedded transactions, ultimately connecting through metrics and data to CRM systems and dashboards for enterprise marketers. Agencies that can provide these “marketing platforms-as-a-service” will see increasing demand and funding from outside traditional advertising budgets, but will need to solve the problem of how to integrate IT into the “creative technology” culture as a full partner. And that will not be easy.

Of course, these issues aren’t new. But the stakes are rising quickly. At one point at CreateTech, Fellman wryly noted one benefit of putting [IT] technologists on the creative team: “you can bill them to clients on a fee basis.” Unfortunately, that’s no way to fund a marketing platform.

As reported by AdAge’s Michael Learmonth:

"What it does is it erodes confidence in one of the primary tools for planning," said Sherrill Mane, senior VP of products for the Interactive Advertising Bureau. "Those who are making plans and allocating dollars were using a fundamentally reduced number of users of audience to do their plans. That does ultimately translate to lost money for publishers and websites."

Nielsen says methodology flaws appear to account for a 22% drop in reported time-spent year-over-year online. This revelation has implications beyond the tarnish it puts on Nielsen’s reputation.

First, in the long-standing debate between advocates of panel-based versus census-based (i.e., derived from server data) metrics, panel advocates have now been dealt a serious setback. Beyond long URLs (which are typical of the methods used by social media sites like Facebook to encode session data), other issues have come to light, such as excluding users of Google’s Chrome browser due to its use of long URLs for secure purchases and crashing “people meter” software (which panelists install on their computers which monitors Internet use). These are now being piled on to standard criticisms of panel data which charge that these panels are hardly “random samples” to begin with, and thus all of their data should be regarded suspiciously. Both Nielsen and its main competitor, ComScore, have been moving to “hybrid” methods that combine panel data with census data, and this incident only underscores the urgency of this transition.

Second, the incident also highlights the fact that neither Nielsen nor ComScore has received accreditation from the Media Rating Council (MRC), the group charged by the U.S. Congress with overseeing media ratings systems, although audits have been in progress for several years. Given the billions of dollars now being spent on online media advertising, the use of uncertified currency is clearly unsustainable, and may be costing online publishers millions.  This, too, must be urgently addressed.

It’s hard to overstate the significance of Nielsen’s role as currency provider to the media industry (and hence, indirectly, in all industries that depend on media for marketing). Nielsen has borne the brunt of much criticism through its history, and many of its recent studies, such as its Three Screen Report and its Video Consumer Mapping Study, have generated some predictable skepticism, as is to be expected whenever a study billed as “independent” lends support for the core business case of its sponsors (in these cases, the conclusion being that Internet video consumption is yet utterly dwarfed by television consumption in the U.S.).

It’s ultimately a positive sign for online publishers and advertisers that ComScore has mounted a significant competitive challenge to Nielsen, and has plans to take that challenge to Nielsen’s home turf of television. It’s clearly in the interest of these publishers and advertisers, through associations such as IAB, OPA, and 4As, to turn up the heat on MRC and the measurement companies to raise standards of transparency in methodologies and the MRC audit and accreditation process.

As many who have been watching these industries have long predicted, what we have here is not convergence so much as collision and conflict being played out with messages like

The operating system or Web browser you’re using is not currently supported. For a list of recommended operating systems and browsers, please see the help section.

As media giants enlist Internet engineers to implement browser sniffers in an effort to gain negotiating leverage, we are at last witnessing the inevitable confrontation between two incompatible models for broadcast content: cable TV and the Internet.

The situation is complex, but suggests the possibility of game theory analysis using the “prisoner’s dilemma” framework. In a simplified model, broadcasters and cable companies are cast as the “prisoners.” In principle, as long as they cooperate to keep unlicensed Internet-delivered TV programming off connected-TV sets (or at least inconvenient enough that it remains on the viewer fringe), they both win: broadcast gets its hefty retransmission fees and cable gets to sell differentiated premium service at a profit.

Enter Over-the-top TV (Google and Apple) to propose the dilemma. To broadcasters, OTT offers the opportunity to sell programming direct to consumers, at potentially higher margins than through the cable middleman. It also offers more direct control over advanced advertising and interactive capabilities, that cable companies are currently attempting to control themselves. To cable companies, OTT offers the opportunity to gain more leverage in retransmission negotiations by potentially offering content that’s free on the Internet for free to their cable customers as well.

In most well-formed prisoner’s dilemma scenarios, the situation results in the defection of both (or all) rational players (in game-theory terms, defection strictly dominates cooperation). The OTT situation today is not well-formed enough to make this prediction, however, because the benefits of defecting do not yet clearly exceed the benefits of cooperating. Broadcasters are unlikely to get more money from OTT providers than cable companies, and cable companies are unlikely to gain enough leverage to offset the potential loss of subscribers should they lose access to popular programming.

The game is also complicated by the fact that there’s a time factor involved: at some point technology will evolve to the point where the boundary will fall and broadcasters will have to choose between offering programming on the Internet knowing it will be viewable on TV as well, and losing a large share of the growing online audience. Distributors, for their part, will need to choose whether to continue to pay escalating carriage fees to hold-out broadcasters or take their chances with OTT. To head off this stage in the dilemma, distributors are working with broadcasters on the TV Everywhere concept, that would extend subscriber-based conditional access to video on any device. As often happens with large, distributed technology initiatives, progress has been uneven and technical issues abound.

The situation is clearly different for cable networks, especially premium ones like ESPN, which has made significant progress on TV Everywhere, than for over-the-air broadcast networks. It’s also clear that delayed action can be costly in this game. In any case, this game’s more complex than the idealized blackboard version.

To discern the winning strategy requires plugging in some numbers and making some forecasts. This will be occupying a good deal of our time in the coming season. You see, billions of dollars hang on the outcome.

On the principle that three data points close together define a trend, here are two more:

• DataXu, a leading demand-side platform (DSP) for RTB announced last week the “industry’s first” DSP advertising solution for mobile, GroupM’s B3 (using DataXu’s decisioning technology);
• Ericsson announced that, on September 22, it will announce AdMarket, a “an open marketplace for targeted mobile advertising through which Ericsson acts as a neutral broker” (in other words, an ad exchange) – see video here.

This is all good news for the mobile advertising market, which still trails online by about $60 billion worldwide. It shows that many of the technologies and concepts innovated for the Internet can help accelerate the mobile market and potentially avoid some of the pitfalls of fragmentation and inefficiency that have at times impeded the development of web advertising (at least on the display side).

The problem, of course, is that for an exchange to work – that is, to attract a critical mass of buyers and sellers and generate enough fees to cover infrastructure and operations – there needs to be sufficient liquidity to start with. This also goes for the highly-touted targeting capabilities of mobile: they’re only valuable if the resulting segments are large enough to interest advertisers, and we still appear to be short of audience.

Part of this is simply a factor of where we are in the growth curve, but there’s another things to consider in assessing the prospects of the mobile ad exchange concept: the problem of smallness. I mean smallness, both in terms of literal size and figurative impact, of the common formats available across platforms, especially as compared with the bigness of proprietary formats like Apple iAds. Proprietary formats may be more attractive than a 300×50 MMA banner, but they fragment the audience in a way that is not conducive to the exchange model. Advanced targeting may someday overcome this, but until then we appear to have a chicken-and-egg problem with mobile ad exchanges, even if they can do RTB.

So, what will it take for mobile ad exchanges to take off? Look for it when Google integrates AdMob mobile inventory into its AdX online display exchange.

It’s no surprise to see Google buy a DSP, as it was one of the few links in the online display advertising value chain in which Google didn’t already have a dominant presence (the other would be supply-side yield optimizers, which have had strained relationships with Google). But it does rekindle the issue of whether an entity such as Google, which happens to be the largest seller of online advertising, can continue to provide both media and the platforms for trading media in a neutral way.

Google now counts among its display ad assets the dominant buy-side ad server (DFA), the dominant ad exchange (AdX), and the dominant sell-side ad server (DFP). Threading these together is the ubiquitous DoubleClick cookie, which, with the inclusion of the vast AdSense network, is evolving into a kind of Rosetta Stone for user data in the display targeting world. As tactics like Real-Time Bidding (RTB) become more prevalent, Google is now well positioned to parlay its search success to drain the clutter out of the display advertising ecosystem and permanently lay to rest the “one trick pony” charge.

But the issue of neutrality won’t go away. As noted by Allthingsd, Invite counts among its clients Vivaki, one of the largest digital ad buyers, which must maintain its ability to buy ads from Google’s competitors on an equal footing with Google. As Google seeks advantage by integrating Invite with DFA and AdX in subtle and attractive ways, pressure for neutral solutions will build, and Google’s competitors are likely to start to find sympathetic ears among anti-trust regulators for whom the analogy of a bulge-bracket brokerage house owning a major stock exchange and the trading systems it supports won’t seem like too much of a stretch. And privacy is already on the minds of politicians who are likely to see the ubiquity of Google’s cookie-based targeting technologies as a target of opportunity themselves.

Media agencies, nostalgic for the 15% commission days of yore, are already looking at Google’s 32% “commission” on AdSense ads with envy and contempt. (Although Apple iAds’ 40% may make this look like a bargain.) And publishers…well, we don’t need to go there. Suffice it to say that the path to seamless integration for Google across its chain of display assets is full of hazards. But then again, in the pursuit of ad businesses, they haven’t tripped up yet, and I wouldn’t bet against them. But a strategic spin-off of AdX – down the road, once all the tools integration is complete and mobile and TV have been added to the mix – may yet produce the ultimate winning end-game.

In case you missed this, Google wants you to know that, even though the official HTML5 standard may be years away, HTML and Javascript today are capable of some pretty sophisticated interactive animation. Apple, Adobe, and Flash developers, take note. In a clever demonstration disguised as a tribute to the 30th anniversary of PacMan, Google coded the game (or a facsimile, anyway) in cross-browser Javascript – which I noted runs just fine on all my Apple i-* devices – and sent a message, which I interpreted as follows:

Adobe: time to give developers a way to convert SWF to Javascript/HTML5. No excuses.

Flash Developers: until Adobe gets to this, better brush up on CSS and Javascript (or find a coder to work with if you’re more of a designer).

Apple: Glad to hear you’re committed to supporting HTML5, because that’s what we plan to use and promote for simple cross-platform interactive apps.

I found this demo pretty distracting, and more than little nostalgic for me: I was a video game designer back in 1980, and I spent quite a while in those days reverse engineering the behaviors of Blinky, Pinky, Inky and Clyde, which I’m sorry to say I’m not convinced Google rendered faithfully.