Mark Pesce, a media professor at the University of Sydney, lectures on his “Hyperdistribution Theory.” The theory is predicated on a few assumptions: the internet’s revolutionizing effect on content distribution has transformed how advertising must relate to content, and also how viewers react to advertisers.

Traditional advertising is increasingly losing its effectiveness. One marketing trade publication said that television advertising is only one-third as effective as it was in 1990. Only 14% of people say they trust it, and only 16% are even watching the ad. So television advertising as it has existed is not sustainable.

Advertisers used to be able to simply buy or rent a captive audience. Today, advertisers have to invent ideas that actually attract an audience. Now advertising is the price you pay for not realizing the value of building your passionate tribe.

People hate irrelevant advertising. Technology and channel choice are enabling viewers to eliminate irrelevant advertising. Every brand today has to think and act like a media company. They can’t just push spots and banners out onto websites or television, brands have to pull people in. It’s a very different attitude.

Pesce’s lesson is to connect the program with the advertiser authentically. The aim is relevance: in order for the advertiser to be relevant to the target market for the show, the advertising should feel relevant to the program content.

The advertising should be integrated completely with the program. The advertiser effectively pays for the budget of the show. Or show segment (or package). Then, in an internet-wired world, you hyper-distribute that piece of content any way you can. Put it on bittorrent, peer-to-peer networks, free video sites, you get it out there any way possible because the advertising message – which is relevant to your audience – is part of the program.  And the advertiser is paying producers for eyeballs. Wherever the producers can get them.

The trick is we’re getting sophisticated.  Therefore, this integration must be more than Clorox sponsoring General Hospital back in olden times. Integration also has to be more than glorified product placement. To be truly integrated, the content must be consistent with the advertisers’ brand. The advertiser’s involvement must be meaningful, trustworthy and valuable. Brands and producers have actually got to provide something that people want, not something that people avoid.

Red Bull does it with action sports. The soda company has an in-house video content department that creates content. They have an in-house event management department that stages competitions. After building an audience for their content, ESPN is now paying Red Bull for the right to air what are basically commercials for Red Bull.  That’s what I’m talking about.

Are any other brands beginning to do this?