A recent article in Fortune entitled "Nightmare on Madison Avenue" (Subs. Req.) raises some important questions about the future of advertising in a Digital Entertainment world fueled by TiVo-like PVR's, entertainment consoles and PC's as well as the growing draw of the Internet as an entertainment destination in itself.
Among others, Alexander Schmidt-Vogel, MediaCom's CEO, points out that videogames, DVDs, iPods, mobile phones, and BlackBerries are largely ad-free media. "The amount of time people spend consuming media is growing, but the share of advertising possibilities is shrinking." Schmidt-Vogel says. He adds that in most cases, there is no way to measure the effectiveness of advertising through these new media.
You'll probably be thinking "Thank God there's no advertising on my iPod! (or DVD, mobile, etc.)" but that's because nobody has yet figured out a good way to make this work. For example, why not develop a Coke branded iPod that would cost say $50 less than an Apple branded one and which would be accompanied by a 'Coke Tunes' online music shop where you would benefit from MP3's priced at $0.10 less than iTunes but where you would be immersed in the Coke World? Not that far fetched + these Coke iPod's would likely become collectors' items. If Nokia is able to produce multiple fascias for its phones why couldn't Apple for its iPods?
To a certain extent Coke has already ventured here with CokeMusic in the US and myCokeMusic in the UK - both of which have proven to be very successful marketing initiatives. However, these types of activities obviously work best when the brands used can be entertainment related as I doubt that this would work particularly well with Crest toothpaste for example.
Bottom line is that marketers are willing to subsidise digital entertainment much as our TV viewership has been but it is not yet clear if this will appeal to consumers nor are marketers quite sure yet as to where or how to 'insert' their messages.
A parting thought: isn't it a bit bizarre that Coke should have a better MP3 download website than Sony's Connect for example?
[Added 7 Jul]
After some further research I came across this article and discussion at MacDailyNews relating to ads on the iPod. Some interesting views and comments. For example, I didn't know that Apple had released a limited-edition Beck (the music group) iPod.