Piper Jaffray just released an extensive new report entitled “The User Revolution” that describes how the Internet is empowering consumers and dramatically changing consumer content consumption patterns (MediaPost summary of the report here). 

“The historically passive consumer is changing rapidly, not only becoming more informed and confident about purchase decisions, but also increasingly taking control of the consumption of information and content that used to be distributed by networks, studios, publishers and retailers,” said Safa Rashtchy, senior research analyst at Piper Jaffray. “We believe this will cause a significant rise in the prominence of the Internet as a major content consumption and marketing medium.”

In the report, Rashtchy goes on to coin a term for this new type of online content called “Communitainment,” defined as the blending of community, communication and entertainment into a new form of online activity driven by consumers.  The report predicts that consumers will shift more than 50% of their content consumption over the next decade to niche Communitainment formats (e.g., social networking, video and photo sharing sites), displacing traditional forms of media content like TV, magazines and large Internet sites.  This revolution will create a major challenge for advertisers and agencies that need to figure out new ways to incorporate their brands and messages into this new medium. 

As I read the highlights from this report, I couldn’t help thinking about how our Smack Shopping Show is a wonderful example of Communitainment (blog post on Smack here).  Smack Shows combine an entertaining live shopping event with an online community that creates a new form of original online content.  The content is highly engaging, with consumers tuning into Smack Shows for an hour or more each day.  Even more interesting, advertising is the centerpiece of each Smack Shopping program.  Leveraging the unique Jellyfish Cash Back auction, we use advertising dollars to actually create the shopping deals and entertainment that consumers tune in to experience.  By integrating advertising, entertainment and community, Jellyfish is helping drive this “user revolution” in media consumption and helping advertisers reach consumers in new highly efficient ways.  We think Smack Shopping is one great way that advertisers can meet the challenge laid out by Piper Jaffray in their report to stay relevant in the age of Communitainment.   

Since our launch in June of 2006, Jellyfish has been working hard to drive adoption of a new form of online advertising we call Value Per Action that eliminates the waste from traditional advertising and transforms it into added customer savings (you can read about VPA here and our vision of advertising here). 

With Jellyfish taking the high road against traditional forms of biased, interruptive advertising, many questioned how we were going to attract customers and generate awareness for our brand and our shopping search engine.  Not a bad question and one we asked ourselves many times.  Television ads, billboards, and even Google keywords were out of the question.  But what was left? 

The answer for Jellyfish has been something we call Smack Shopping.  The Internet’s first live shopping game show, Smack Shopping combines the fun of a game show with the fantastic deals generated by the Jellyfish cash back auction.  Smack shows run every business day at 12 CST and include multiple Smack Auctions where a limited quantity of products are offered for sale at increasing cash discounts.  Participants have the chance to buy the hottest online products at remarkable discounts, play games for prizes and interact with a virtual community of other Smack shoppers (a Smack by definition is a group of Jellyfish).

To our knowledge, Smack Shopping is the first game show broadcast live to an online audience that actively participates in the event.  There are other companies working on streaming video plus chat, see for example Pete Cashmore’s discussion of Lycos Cinema here and the much anticipated launch of Joost here, but Smack Shopping does more than view pre-assembled video.           

Fueled by Jellyfish cash back, the game and the entertainment is actually advertising, but I doubt any of our users would view it as such.  It’s a customer acquisition strategy that is consistent with the Jellyfish promise.  Instead of spending money interrupting people with traditional advertising, Jellyfish is using advertising dollars to create compelling game show like content that consumers seek out and invite into their lives.  And it is working.  From the beta launch of Smack Shopping on November 1 until today, Jellyfish has grown its user base over 5X, with Smack Shows regularly engaging 10’s of thousands of online shoppers for an hour or more of fun every day.   

Advertising as content.  It is a trend we are going to see more of as consumers gain more control over where they devote their attention and advertising seeks out new ways to be relevant.  We view Smack Shopping as permission-based, engaging advertising at its best.