The Future Of Advertising

Commentary on the book, “The Future of Advertising: New Media, New Clients, New Consumers in the Post-Television Age” by Joe Cappo (http://www.amazon.com/Future-Advertising-Clients-Consumers-Post-Television/dp/0071403159)

Author's own commentary on iMedia Connection: http://www.imediaconnection.com/content/2918.imc

This book was written in 2004 and Mr. Cappo's direction as to the Future of Advertising have continued to prove true. The basic premise is that advertising and the entire industry is splintering and more highly fragmented with less big players and more, smaller specialists.

In the Beginning there was Mad Men

Mr. Cappo describes the advertising business in the early 1970's as one centered around few agencies and few channels. Basically, TV was the big buy and the best and only way for brands to achieve the reach they needed to promote their products. Agencies were an end to end shop for all of the advertiser's needs and they provided services beyond the television media buy for free due to the huge margins from the TV sale. The additional services and channels did not amount to much reach or impact an advertiser’s results as much so they turned out to be a throw in.

The change in advertising has come from the fragmenting of audiences and specifically the fragmenting of attention within and away from television into many different mediums. With more channels on television media buying became more complex. Since big time advertisers require reach for their campaigns this also forced them to explore additional channels each requiring their own specialists. Big name ad shops were not going to position themselves as specialists in niche channels since this would devalue their importance in the big bread winner of television.

A Vicious Cycle of Reach vs Niche

Internet advertising accelerated this shift and continues to do so. Gone are the days of media sales being the “Mad Men” three martini lunch. Today media sales are based on audience and performance data. More and more technology vendors are providing audience data to advertisers who are then demanding more and more of it for highly targeted campaigns. The more targeted the campaign, the less reach each buy has. This forces the shift from media buying being simply buying ad spots on one of the three major networks to media buying trading desks with real time bidding. To compete for these ad buys publishers are talking or selling inventory to a new type of buyer and are forced to shift from the emphasis on their brand to audience data. Advertisers care less about where their ad is shown (brand) and more about who their ad is shown to (audience).

If the medium is the message, new campaigns need to be constructed for each targeted audience on each platform. An ad targeting 18 - 34 year old males that used to be able to be run during a football game now has a new message and creative for television, web, social media, mobile and Internet video. Also, across each of these platforms messaging may be adjusted on factors such as in market consumers or product branding / awareness.

Each of these are individual and smaller buys and the publisher or media outlet needs to justify the ad spend for each campaign across each platform. Where media sellers used to spend money on extravagant parties and entertaining media buyers selling the value of the context where an ad is placed, those dollars are now better spent on audience data, private exchanges and real time bidding systems. That is the new and only way to sell to ad agency’s trading desks.

Conclusion

The future of advertising is smaller agencies, smaller and more highly targeted buys, more niche and highly targeted channels, and much more specialization in matching the message with the medium.