Advertising of 2007

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These are incremental, but important, shifts.

"We've been talking about it for a decade or more, but this was the year when everything started to join up," says Waterfall, whose agency specializes in creating digital content. "People aren't so worried about defining work in terms of media; they're thinking more about the motivation for producing work in the first place. It's about value and information, a combination of content and signposting—that's a really important shift—and about time, too." Likewise, while skeptical about the grandiose claims for "multimedia" campaigns made by many agencies, which he suspected had more to do with winning awards than usefully serving a client, Jonathan Kneebone applauded work that eschewed formulas to provide its client with a useful service.

Take, for instance, the much-talked-about Nike (NKE) Plus Web site, designed by New York interactive agency R/GA as a way to provide a useful online community for runners. Available in eleven languages, the site was singled out as an example of the power of branded content. "Running. Music. Running to music. Not only does it fundamentally engage the Nike community, it makes something new from two things that have been around for millennia," says Waterfall. Kneebone adds: "It's an astonishing blend of usable Web design and Nike running technology," he says. "The simplicity and power of what's on display comes down to its accessibility and desirability."

How to Harness Facebook?

Last year, the buzz was about how user-generated content would reshape the industry. This year's hopes rode on the potential of social networking. Yet despite the hype, there's still uncertainty as to how sites such as Facebook and MySpace (NWS) should be harnessed by businesses—or what the impact will be from services such as Twitter, which currently serves text-based ads from the likes of Jet Blue (JBLU). "The population on MySpace is almost as big as Brazil," says Waterfall. "You wouldn't—couldn't—put an ad on Brazil. So why would you put an ad on MySpace? It'd be like sending one ad to a local branch of the Boy Scouts and expecting the entire global organization to listen to—or care about—your message."

And despite applause for its efforts to involve external parties in co-creation efforts, Facebook clearly doesn't have all the answers. Its clumsy introduction of the Beacon advertising service—and subsequent back-tracking—clearly showed that users do care about their privacy, and they do care about being used as vehicles for advertising. That doesn't necessarily mean they won't comply, but the days of consumers acting as unwitting brand ambassadors are over. Brands need to understand that consumers are not necessarily concerned with remuneration; they're concerned with a company's attitude. How brands treat their customers is exactly how they'll be treated in return—and then some. The playing field has leveled and the consumer is a more powerful player than ever. And one thing's for sure: The social networking genie is out of the bottle, and it isn't going away any time soon.

Then there's mobile, the potential of which many advertisers have yet to grasp. With the launch of iPhone, Steve Jobs and the team at Apple brought renewed vigor to the medium. But how will advertisers learn to harness the potential of the mobile medium in a brand- and bottom line-building way? At the pace the world moves these days, it won't be long before we find out.

Helen Walters is the editor for BusinessWeek.com's Innovation and Design Channel .