“The advertising industry is passing through one of the most disorienting periods in its history. Consumers have become better informed than ever before with the result that some of the traditional methods of advertising and marketing simply no longer work.” The Economist, June 2004
The advertising industry is in the midst of an unprecedented transformation.
What Seth Godin describes as the “TV industrial complex” no longer applies. This model was based on the simple idea that heavy spend in above-the-line advertising would guarantee awareness and distribution, automatically resulting in greater sales, which would generate more revenue, ploughed back into further marketing investment to continue the cycle. This was great news for agencies that at the time made commission on the media spend, irrespective of the time, effort or intellectual capital invested.
However this age is over. ITV currently faces a huge shortfall in its forecasted ad revenue, with its digital channels cannibalising its terrestrial business at a lower CPT. In the US Pepsi last year launched PepsiOne without any TV support.
Similarly the direct marketing industry is also in transition. We are witnessing a huge consumer backlash, with record levels of customers signing up to the TPS, the MPS and the previously hidden Royal Mail door-to-door preference service.
However, whilst the old media no longer work as well, organisations are under increasing pressure to justify every pound of marketing investment.
Whereas once there was a clear divide between the product marketing skills at the client and communications skills within the agency, the line in skill-set is becoming increasingly blurred. Today’s clients see themselves as communications experts, resulting in a need for agencies to be much more objective in their proposals rather than relying on experience and judgement alone.
The term integration itself will soon become meaningless as the terms “above” “below” and “through” the line will disappear. This is because all media is becoming accountable, and marketers recognise the need to think and plan in terms of moving specific customers down the purchase funnel rather than separate “awareness” and “response” bursts.
What is new is that in order to create EFFECTIVE results, we need to understand the unprecedented degree of CHANGE that is now happening and develop new ways of working that harnesses these changes in to obtain an advantage.
These unprecedented changes are happening in:
- The way consumers interact with brands
- Market dynamics and how brands succeed
- Media channels and the tools available for marketing
This is an exciting time to be a marketer. To deal effectively with constant change. To continually challenge assumptions and pioneer new ways of doing business.
To misquote William Gibson - the future of marketing is already here, its just not very well distributed.