Imagine five years out. It won't hurt, we promise.
Even the worst-case forecasts have our economic malaise nearing an end by then, a dreaded lost decade coming to a blessed conclusion and a true recovery taking shape with low unemployment and revitalized consumers.
Once again the ad business will be growing. But a new media and marketing order will be taking hold. In measured-media terms, in 2016, the furthest year forecast by eMarketer, TV will still own the biggest piece of the marketing pie (36 %), but just barely. Online advertising, at 31%, is sure to be hot on its heels. Further behind but growing fast will be mobile, whose share will have jumped from about 1% today to 5% as marketers chase a wholly mobile consumer reveling in constantly improving gadgets and services (see chart below).
The rise of mobile, coupled with an evolving, more web-like TV market will present a vastly different communications landscape. Rising to the challenge will entail many changes in old processes, from compensation to measurement. Whether you're ready depends in part on what you do now.
What follows is a program for how the ad industry and its leadership can take on the most pressing challenges and be ready for the problems of the future. Some of these are old, nagging concerns that have been kicking around for years or even decades. Others are just now taking shape. All are crucial.
BE RELEVANT ON CONSUMERS' MOST IMPORTANT DEVICE
By 2017, 85% of the world will be covered by 3G mobile internet and half will have 4G coverage, according to Sony Ericsson. Three billion smartphone users will contribute to data traffic that 's 15 times heavier than today's. For more and more consumers, the most important screen will be the tiny one in their pocket.
Personalized and data-soaked, context and location aware, the phone is the window into the consumer's soul that marketers have been looking for. Whether brands are invited in depends on whether marketers understand what consumers want and need in a mobile environment. By any measure, they're not moving fast enough.
To put it bluntly, there needs to be more ad spending on mobile, which now comprises only about 1% of budgets, according to a recent study from the consultancy Marketing Evolution. Based on ROI analyses of smartphone penetration, that figure will be about 7%. In five years' time, that number will need to be in excess of 10%.
Rex Briggs, CEO of Marketing Evolution, said marketers shouldn't be scared off by the current options for mobile advertisers, which many find to be creatively, um, challenged. "The formats are there but there is a lot of room for improvement," he said. In his study, for instance, there weren't even enough location-based campaigns to break into a separate category. That's not good because, as Mr. Briggs said, "what makes mobile unique is that it's mobile."
Of course, advertising is just part of the question and possibly not the most important part. Using mobile devices and platforms to offer consumers real utility and convenience -- and not just interrupt them -- is where the battle will be won. Inspirations here are Nike , with its Nike + and Fuelband platforms, Tesco's virtual subway store in South Korea and Starbucks. The coffee chain has dabbled in every big mobile trend and bet heavily on innovations in payment systems, recently handing off its credit- and debit-card transaction processing to Square, a mobile startup in which it has taken an equity stake.
TO DO: Up your mobile spend now so you can test and benchmark in the future. (CPMs are favorable at the moment.) But don't forget mobile threads throughout the whole consumer experience. Mobile is not just about ads, and it's certainly not about interruption.

BIG DATA COMES TO THE TV SCREEN
With apologies to cable cutters and death-of -the-30-second-spot prophets, TV remains the best way to tell a brand story to something approaching a mass audience. Yet it is still a relatively dumb marketing medium in which irrelevant ads are shotgunned at viewers as though they don't possess technology to skip them.
The TV market is inefficient, not ineffective, said Dave Morgan, founder of Simulmedia, a startup that 's trying to make TV more data driven. "There are a lot of ads going to wrong people, too much frequency for heavy TV viewers and not enough precision for micro-targeting campaigns."
Mr. Morgan said that now 1% or 2% of TV advertising is data-denominated, with guarantees of GRPs and sales attribution. In five years, when as many as 75% of set-top boxes offer direct, second-by -second viewing data, that number should be more like, 15% to 20%. With real knowledge of who's watching what and when, advertising's biggest medium will change. For a glimpse of that world, look to Allstate's addressable TV push for a relatively niche product, renters' insurance, designed to be seen only by renters.
This kind of stuff is game changing and will put new demands on every part of the marketing supply chain. First of all, marketers can think differently about how they use TV. With more granular data about who is viewing their ads, those micro-targeting approaches begin to make sense and that will impact not only the marketing mix but also business strategy and product development. Agencies will need to shore up consumer insights and creative processes to deal less in overly emotive anthems and more in clear propositions for well-honed customer segments. And the buyers and sellers that populate the TV market will need to populate their ranks with analysts who speak the language of data. In 2017, TV will be less about checking GRP boxes and making sure the eighth season of "Cougar Town" is teeming with ads and more about meeting business objectives.
TO DO: Hire the right people so you can start thinking of TV investment as a data play, if not a direct-response channel. But do not let privacy issues slip your mind.
MEASUREMENT SHOULD FOCUS ON OUTCOME, NOT JUST REACH
What do we talk about when we talk about engagement? I have no idea and, odds are neither do you. But semantic confusion hasn't stopped the marketing business from using the word as a placeholder for describing what we really, really want from campaigns: a deeper understanding of just what advertising does.
A few years ago, an industry attempt to replace frequency with engagement failed in part because engagement suggests we know what's going on in someone's brain when they see an ad and we couldn't really deliver on that . Yet into the brain is precisely where measurement needs to go, said Ted McConnell, exec VP-digital at the Advertising Research Foundation. "What I hope you will see in digital media (online, or TV in the future) is that measures of exposure will become comparable and reliable and that measures of engagement will try to glean what happened inside a brain," he said.
Such measures would yield more insight into consumers' behaviors, ranging hovering a cursor over an ad to clicking on one to changing channels, eliminating false negatives along the way. One reference point here is how behavioral targeting uses past behavior (and all behavior represents something going on in the brain) as a way to serve up a relevant ad experience.
Don't mistake this as an argument for neuromarketing. Monitoring brain waves is better used for qualitative feedback, small sample sizes and diagnostic work.
Mr. Briggs, whose work at Marketing Evolution has tracked how advertisers have over time received less return on their marketing budgets, argues that advocacy is more important than awareness. It follows that measurement models have to be flexible enough to allow for experimentation with new media, such as mobile. "Measurement has become the enemy of innovation," he said.
TO DO: Get out of the mindset that reach and awareness are enough and don't use models that fail to build in room for experimentation with new channels.
FIX COMPENSATION PROBLEMS
A recent Association of National Advertisers study delivered a grim finding on how agencies get paid: "New methods of compensation like value-based remuneration that rewards performance have not taken hold globally. Only 4% [of respondents] reported utilizing them." That's a depressing stat. Now here's a ridiculous one from a 4A's study: Agencies bill mobile developers at a rate less than half what account-services directors receive.
The compensation crisis has been on the industry's radar screen for years. The decline of the cushy, reliable 15% commission, coupled with the rise of procurement, has led to downward pressure on agency margins and widespread complaints about agencies losing their status as partners to become lowly vendors. Assuming we're not going to ditch the very flawed charging-for-time model, the fix is clear: a shift to performance-based compensation agreements that reward effectiveness and not time sheet completion.
Underwear purveyor Jockey International and its agency, TPN, offer an excellent model based on, as Jockey CMO-exec VP Dustin Cohn described it, "earned profits and payment on work output." Agency and client work together to determine the scope of work and metrics that determine the entire profit markup. Said Mr. Cohn: "Putting all of their profits on the line validates that the agency really believes in the client-brand and what they can do to move it forward."
Steve Blamer, former big agency CEO and compensation consultant, said it's up to agencies to become honest about profit margins and income levels. "I'm astonished at how reluctant agencies are to provide transparency around their costs." At the same time, client marketers need to be willing to pony up for deserving work. And some are not.
TO DO: Agencies, open the kimono on costs. Marketers, don't assume your agencies aren't open to new compensation programs. Both need to get on the same page when it comes to metrics. But don't be cheap.