Warning: Advertising talk ahead

I've been thinking a lot about advertising's continuous progression towards the eventual monetization of every little action leading up to a sale. I can't help but wonder what will happen to the world of marketing as we lose ourselves inside an illusion of security once we start believing our dollar values are correct.

Perhaps I should give some background to my concerns. It's no secret that the traditional advertising business has been shaken up due to the increased level of measurability and accountability digital advertising provides. That's yesterday's last week's news. When you market online, you can track every little click, every time the mouse hovers over an ad, every item you toss into a virtual cart. With traditional advertising, the best you can do is sit there and hope your ad was seen or heard by someone in your target audience. Anyone. But who's to know?

Once the ability to trace actions to money is available, every action now has a value. Of course this value will fluctuate given a multitude of circumstances, but there's a number somewhere nonetheless. And when there's a number, there's math to be done. Advertising used to be so unstructured, where companies just tried random copy and creative materials. The revolutionary direct marketer and copywriter David Ogilvy championed the use of testing to actually make advertising recommendations credible. And now we're to the point where every click online is valued.

The newest trend I've noticed is the increase in modeling and valuation of online actions. There are now even more formulas, and everything you do online potentially has a dollar value attached to it. Did you just look at a product? Did you put something in your virtual cart butt hen decide you don't want it anymore? All of these actions are worth something to the marketer. And you can bet they'll try to determine just how much those actions are worth if they haven't done so already.

My concern is - what if we start becoming too dependent on these models? They are, after all, still just guesses, albeit smart guesses. Are there any consequences that we can't see yet?

One of the main reasons for this current economic meltdown is the extensive use of models whose origins eluded the majority of the people working with them. The models were used to price the really crappy mortgages based on how high the risk of default was. However, models are simply frameworks meant to guide predictions. What people didn't take into account was that the real world cannot simply be squeezed into a formula because its nature is to be chaotic. And that's the same issue that the new marketing valuation models will soon encounter. This BusinessWeek article explains what I'm trying to say in a much more eloquent fashion.

The final question, after all of that background and speculation, is, "Have we considered the risk in building these new marketing valuation models?"