Over the past few years we have all become religious in our devotion to on-line advertising. Whether your favorite flavor is search or display media or some combination of the two there isn’t a marketing person alive who doesn’t, at some point in any conversation, talk about the seismic shift from traditional media to digital media. Yes, the amount now spent on digital media is staggering, $12bn or more depending on which analyst you choose to believe. And further, the growth rates, historically 20%+, are expected to continue at double digit pace even in a weakening economic environment. And lastly, there is the percentage it now represents, nearly 12%, with expectations that it will double within 3 years. There is no doubt that on-line advertising is real, increasing in influence, expanding in flexibility as technology allows for richer formats and therefore greater creativity. Why then is the article entitled the Death of On Line Advertising when in fact, we all know it is anything but dead?
“The King is Dead Long Live the King.” I often think if this phrase, uttered in passing the torch from on Monarch to another, when thinking of how traditional advertising, once king, has passed the baton to on-line advertising, very much the newly coronated king. . And just as the new king is rising to even greater power I am ready now to declare his demise. And not because he is any less powerful, but simply because the notion of a king, a ruler, a dominant force has no role in advertising in today’s modern world. The marketplace is too complex, consumers too sophisticated, too mobile, and too technology savvy to be subject to any one form of communication.
Advertisers, now think in terms of media mix, meaning how to balance budgets across the spectrum of available media options. In large part because advertisers recognize that the consumer is many places and therefore allocating money across various outlets increases the probability that brands are well represented in the places consumers live. Not a bad idea, but flawed as advertisers try to dumb this down to a simple media allocation exercise. And guess what, on-line media looks in percentage terms in corporate budgets much like it looks in percentage terms in Forrester calculations. Why is that? Who is following who? The symmetry is poetic to the point of inducing nauseau. Why do I say this? Because much like loyal subjects of the king, we have stopped thinking for ourselves. Ask why media mix modeling is such a hot topic? Because the choice between media outlets is an old idea and an easy paradigm to apply. In the past we had national publications, regional ones, special interest, national papers, local papers, etc. And now we apply that same logic across today’s available outlets. The internet has become just another newspaper or magazine in the mind of many marketers. The first car introduced was referred to as the horseless carriage so that consumers would have an easy point of reference. On-line advertising is, in many ways, still being thought of the horseless carriage.
Here is the problem. Unlike automotive technology introduced in the 1920’s, internet technologies introduced, at least commercially, in the mid 1990s, are advancing at near breakneck speed. And just as we are able to come to grips, it morphs or changes into something else. And in our thirst to understand it better we apply the new to an old world we are more familiar with.
To that I have some good news. The King is dead. On-line advertising is dead. Traditional broadcast advertising is dead. New forms of immersive digital advertising like in store display are dead. Not because they are no longer relevant or highly effective, they are and will grow increasingly so. The death refers to our thinking, specifically that we think of new forms of advertising as the medium first and the consumer second. As digital media proliferates it is popular at dinner parties to talk about the death of advertising, Well, I am here to proclaim that advertising is very much alive. And in fact I would encourage everyone to stop being amused by the shiny new toy and instead think of it as the horseless carriage. Although transportation has advanced exponentially over the last century, the basic objective of transporting a person from one place to another still remains. Sure today I may get in an Aston Martin, plug my destination into the GPS, drive 100 miles an hour and talk to my Mother via bluetooth and on-board mobile technology. Ride aside, the fact is I am still just going from my house to the grocery store. No change. And sure, today I may be overwhelmed by the prospect of a facebook application, or an on-line advergame, the fact is, we are still connecting brands and consumers. And I would be willing to bet anything that we will be doing the exact same thing in 100 years. And while this paradigm is simpler to understand, and should ground your thinking as an advertiser, it does in many ways represent a lot more complexity. As an advertiser today, there are some critical principals that you need to follow:
· Know your consumer intimately. This comes from research, and not just the focus group kind. Get familiar with ethnographic research and other tools that do not rely on the consumer to find language to express himself. Words often yield the wrong conclusion
· Follow that consumer like you’re on a stake out. Once you have gone to the trouble of learning something about him. Monitor his behavior and check your assumptions. See if you can identify patterns. Start thinking in terms of lifetime value and less in terms of cost per acquisition. You will need systems to do this. But you will find these investments if implemented and managed properly will yield significant return
· Optimize and advertise. Do not lock yourself in to long term plans. Set up a measurement framework to understand how your advertising is performing and then adjust based on what you are seeing. Use strategic planning to help narrow the positioning and communications options, but keep an open mind as you launch. Learn to think of everything, including the rollout, as a test. Shift your thinking about effectiveness measurement as a real time/leading indicator and much less a look in the rear view mirror
· Don’t budget by channel. This forces an allocation of media dollars well in advance of when it is logical
· Quantify everything. Make sure that you treat your advertising like you would your own investment portfolio. If you know you need to retire in 30 years you develop an asset allocation model and track everything against that objective. You adjust as markets adjust. Consider the same here. Know your goal, make sure your team and your agency knows your goal. And hold people accountable. The big idea is only the big idea if it lives in service of your objective. You wouldn’t bet your retirement on one stock.
So what then now? Picture a world where there is no digital agency. A word where there is no broadcast agency. A world where there is no specialzed agency. That world is coming. Sure there will always be areas of specialization, especially as these areas incubate new ideas and capability. And arguably there will be even more over time as the pace of change increases. All of that said however, the agency of tomorrow must recognize what I discuss above. That it’s role is to help brands connect with consumers and not to think about how to leverage only one vehicle to do this, or silhoed vehicles in some arbitrary combination. The job of an advertiser is harder today. The combination of technology advancement, channel fragmentation, format changes, and consumer splintering are mind boggling. But the answer to these challenges is not found in the better mousetrap. It is found in the recognition that regardless of the mousetrap the objective is to catch mice. It is hard to keep calm in a storm. But that is what we must do.
The King is Dead Long Live the King. The more things change the more they remain the same. A sobering thought in a drunken time.