The End of Advertising As We Know It

June 21, 2017

Everybody is well aware that the advertising game has undergone some pretty radical changes. Online advertising, animation, keywords and contextual ads, to name a few. But that’s just the beginning according to IBM, which is predicting that the next five years will bring more change for the advertising industry than we saw during the previous 50 years.

That’s the conclusion of an IBM Institute for Business Value report titled “The end of advertising as we know it.” The study’s results are based on the input of 2,400 consumers and 80 advertising experts. It invites us to imagine a bold new frontier in advertising, a marketing environment where:

  • Spending on interactive, one-to-one advertising formats surpasses traditional, one-to-many advertising vehicles that we’ve used for decades in the form of newspaper, radio stations and TV networks.
  • A significant share of ad space is sold through auctions and exchanges, rather than proprietary channels.
  • Advertisers know who viewed and acted on an ad, and pay for their advertising based on results rather than “impressions.”
  • Consumers self-select which ads, choosing to receive only those messages about products and services that interest them. They then share preferred ads with their peers.
  • User-generated advertising that is as prevalent as spots created by professional advertising agencies.

Naturally, these conclusions don’t bode well for radio, television and newspaper advertising, though that is assuming their operational models don’t undergo some significant changes, which is already happening. Traditional media outlets all have websites and are experimenting with new advertising models and packages. This aside, notions that companies are going to entirely abandon brand-building ad campaigns entirely in favor of measurable direct-response campaigns is surely folly.

Still, statistics show there is a major reordering of spending priorities underway by advertisers, as more and more ad dollars continue migrating from traditional media venues to online channels. This is due in part to the high priority advertisers place on reach young people who haven’t yet established their buying patterns.

The IBM report believes there are four powerful trends at work that are reconfiguring the advertising business.

Attention. Consumers are increasingly in control of how they view, interact with and filter advertising in a multimedia environment. TiVo alone shook up the television advertising business, as viewers shifted their attention away from linear TV watching and have adopted tools that allow them to skip advertisements, as well as rate their favorite ads and easily share them with friends. This is happening while people spend less time with tradition media outlets and more time with online media. Those surveyed for the IBM report say they spent as much time online as they do watching television.

Creativity. Technology has unleashed the creativity of everyday people. Popularity of user-generated and peer-delivered content is rising. People aren’t happy just consuming media; they want to participate in its creation. New ad revenue-sharing models – such as YouTube, Crackle and Current TV – have allowed amateurs and semiprofessionals to create low-cost advertising content. IBM’s study indicates the trend will continue. Example: User-generated content sites were the top destination for viewing online video, attracting 39 percent of survey respondents. Meanwhile, established media players, like publishers and broadcasters, are taking on traditional agency functions and developing more of their own creative.

Measurement. Advertisers are demanding more targeted and measurable advertising campaigns, putting pressure on the traditional mass-market model created by newspapers, radio and television. Two-thirds of the advertising experts IBM polled expect results-based formats to account for 20 percent of ad spending within three years. Those dollars will be shifted from the currently dominant impression-based model. The exodus from traditional media ad campaigns began at least a couple of years ago and shows no signs of letting up.

Advertising inventories. New advertising industry players are making ad space that once was proprietary available through open exchanges. As a result, more than half of the ad professionals polled expect that within the next five years open platforms will account for 30 percent of the revenue currently flowing to proprietary advertising channels, such as TV channels and radio stations. Mighty media empires have already been crippled by the new world order created by the internet. Ad exchanges will further democratize the business and take the media moguls down yet another peg.

Advertising campaigns have been a key component of corporate empire building for generations. The advertising agency business itself became a big industry. Those were simple days by comparison to the fragmentation taking place today. New technologies have proliferated options for ad creation, placement, targeting and measurement. The array of diagnostics available for analyzing online performance is seemingly endless, and technology’s rapid advance means we’ve just reached the edge of this new landscape.

It’s all become very unpredictable, interesting and egalitarian.

A Career in the Advertising Business

June 21, 2017

With all its glitz and glamour, many people believe that working in advertising is all fun and games. Nothing could be father from the truth as advertising agency people are some of the hardest working professionals around. At its very core, advertising is still a business and a very competitive business at that. Now, if despite that knowledge, you still think that advertising is a good place of employment, then read on to get a better idea of how the advertising world works.

Basically, advertising serves the function of promoting goods and services through the mass media, which includes television, radio and print, mainly newspapers and magazines. Advertising also uses other non-traditional media to do its work such as outdoor advertising and through organizing special promotional events. In a marketplace that is cluttered with all sorts of products, it is advertising that manufacturers rely on to make them stand out from the clutter. This is where the advertising agency comes into play. The agency creates the advertisements that make clients stand out. The main stock in trade of advertising agency people are their creativity and technical expertise.

The client jump-starts the advertising process by providing the advertising agency with its marketing objectives and a profile of its target audience, specifically, the kind of consumers they want to influence. This provides the agency with the ammunition it needs to create creates a “brand image” or the kind of image that they feel will make the brand most attractive to its target audience. They want this brand image to be unique so that it makes itself distinct from its competitors. They also want this brand image to be projected in a compelling and imaginative manner so that the target audience will likely remember it the next time they are out at the department store and looking through the shelves.

Next the ad agency will select the media outlets which it feel can best send their brand image to the hearts and minds of their target audience. They do this by studying what kind of media their target audiences “consumes” – what kind of TV shows to they watch, what kind of newspapers and magazines do they read, and so forth. From there, it’s a matter of measuring their audience’s response and making changes (if any) on their advertising approach based on these responses.