Fred Wilson Discusses Ads, Mobile, and Crowdfunding at Ad:Tech NY

11/8/12Follow @jpruth

No one has discovered a magic formula for the best way to leverage digital advertising. However, it never hurts to take a bit of advice from venture capitalist Fred Wilson, managing partner of Union Square Ventures in New York. He spoke Wednesday afternoon at the ad:tech New York digital marketing conference, discussing “Tomorrow’s Digital Landscape” in an interview with Dave Morgan, CEO of television advertising company Simulmedia and a pioneering force in online marketing advertising.

Wilson, ever candid with his perspective, said that as content on the Web and in mobile continue gains popularity, digital marketing must be dynamic to remain relevant. “If you just slap up some generic ad format, people tune it out,” he said.

Creating marketing and ads in the same format as the core content of different platforms, he said, is crucial to capturing the attention of the audience. Ads that take the audience out of the regular flow of content can turn them off. For example, Wilson is not keen on YouTube’s current strategy, which includes a mix of preroll video ads, video banner ads, and marketing content that appears in the margins of videos. He believes video ads should be uploaded to YouTube just like the main content and discovered organically by users. “I think the overlays on YouTube are horrible,” he said. “YouTube should have promoted channels where marketers pay to push content out to the broader ecosystem.”

He compared this possible strategy to the model Twitter uses for promoted tweets that appear among the normal flow of tweets. The idea is to make digital marketing fit the medium. “If you want to build a really good ad campaign in Facebook, tumblr, Twitter, or YouTube, you need to build a unique experience for those platforms,” he said. Wilson was an early investor in Twitter, and he also backs companies such as tumblr, Flurry, and Kickstarter.

In addition to changing the way ads are presented on the Web, Wilson sees opportunities for marketers to cultivate the mobile sector as the public grows more attached to tablets and smartphones. “We haven’t given publishers great ways to monetize that traffic,” he said. Wilson suggested creating mobile apps first and then scaling up that content for the Web, rather than the reverse, which can look poorly put together.

As the discussion wound down, Wilson offered the audience his perspective on topics beyond advertising, such as Amazon’s growing clout in Web services. “They are the dominant supplier of servers and storage on the Internet,” he said. “Amazon is more dominant in that world than Google is in search.” He also noted Amazon’s growing reach in media through the combination of Kindle tablets and the digital delivery of e-books, music, and video. “They are as well-positioned, in some ways, as Apple is in that world,” he said.

Wilson also shared his hopes that crowdfunding, under the JOBS Act, will become a stable part of the investment landscape—as long as it does not get crushed by regulatory rules. “It’s upsetting to me that you have to be a millionaire in this country to invest in your friend’s startup,” he said. Wilson sees crowdfunding as a potential boon, by extension, for angel investors and venture capitalists. More capital coming from diverse sources, he said, is healthier for the marketplace and innovation than fewer sources controlling most of the money. “The more entrepreneurs there are and the easier it is for them to get their ideas financed,” he said, “the more great companies there are going to be that we can all invest in.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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