2.0 is all about comparative advantage and nothing more. Adam Smith would be proud.

In this whole 2.0 world, I just can’t keep things straight. Was I born at 1.0 or 0.1? And where am I today? Am I in my 3.0s or just 1.9.2? Because I’d say that it looks like my 4.0s or my 5.0s are on the horizon, and I definitely feel like I’ve learned lessons from my 2.0s. And what will version 2.1.7b be like when we get there?

Unless I’m in the world of technology…which feels the need to 2.0 everything. Whatever you were doing is 1.0 and whatever you will be doing is 2.0. So according to the recent Advertising 2.0 conference, I’m destined to do tomorrow what I’ve been doing for years, which is going to conferences and looking for cellular signal. Or looking for a way to cram a day’s worth of work into the 30 minutes between sessions.

The biggest take-away from Advertising 2.0 is that, no matter what happens, the best that digital advertising can do is to grow its comparative advantage against other media. This is a difficult concept to grasp, but it’s very important. Everyone looks at Google, and they think that digital advertising is the land of milk and honey where riches abound.

In my arcane 1.0 way of thinking, Google has made all sorts of money selling search advertising to marketers who were either (a) not spending money on marketing, or (b) spending their marketing budgets on yellow pages, classified ads in magazines and newspapers, and so on and so forth. Your average Google AdWords campaign probably isn’t pulling budget from national spot television advertising. And there isn’t a traditional media parallel to what eBay is buying from Google.

When we start talking about key advertising concepts such as targeting and engagement, what we’re really saying is that digital advertising (online, e-mail, mobile, digital out of home, interactive cable, IPTV, satellite, internet video and so on and so forth) will become increasingly competitive in comparison to traditional media advertising (such as: print, radio, television, direct mail, magazines, newspapers, out of home, etc.).

And that the 2.0 world of Advertising is one in which digital approaches are increasingly competitive with traditional media. So by “2.0″ we mean that digital advertising approaches will become more effective than they have been. And more advertising budgets will transition into digital dollars.

But definitely, we’re not going to get rid of print, television, radio and out of home altogether. Instead, more dollars will shift to digital properties. And eventually we’ll reach an equilibrium of some sort. That should be around iteration 5.0 or 6.0…or thereabouts. For now, if numerology is any indication, it looks like we’ve got the terrible 2.0s ahead.