The future of advertising? And the answer is…

rubik's cubeThere is no shortage of discussion these days about the future of marketing, communications and advertising agencies. Claims and predictions abound. Outbound marketing is dead. The age of interruption is over. Mobile is all that matters.

We have ad agencies becoming digital, digital shops striving to become agencies of record, production companies going direct to client. And everyone pondering whether or not the new model is utility-based platforms, as opposed to short-term, message based campaigns.

Brands and marketers, under severe economic pressure, are keenly observing what smaller more nimble companies are doing with inbound marketing and are anxious to experiment with social media, crowdsourcing and conversation marketing. CMOs are hiring five agencies instead of one, raising the question of whether specialization is better than integration.

It would appear the old model of pouring thousands of dollars into discovering a single insight and millions of dollars into one campaign just doesn’t make sense anymore.  It takes too long.  It costs too much.  And besides, consumers want customization anyway, whether it’s the RSS feeds to which they subscribe, the apps they install on their iPhone, or the jewelry they can now design and price in real time by doing it online.

Yet old habits refuse to die. The majority of retailers insist on spending most of their marketing dollars on a medium (newspaper circulars) they agree doesn’t work anymore. Meanwhile their customers are relying on Google, Twitter and personal networks to research every single purchase, from low-cost light bulbs to multi-thousand dollar appliances. Given that they’re also bringing that new habit with them to the store, retailers and their agencies might be better off putting the money into search, digital apps and intelligent point-of-purchase.

Contradictions abound. Chris Anderson tells us that content and information wants to be free — even though we’re willing to pay billions of dollars for virtual goods  –  right at the time when media margins are shrinking along with client budgets.  Combine that with consumers’ intolerance for advertising and it doesn’t bode well for new models like Hulu.

Then there are the new social consumers. Determined to take things into their own hands – conversing, commenting, criticizing, creating — they feel no qualms about bringing a brand down, celebrating the products they love, or becoming brands themselves, capable of building their own multi-million dollar companies with little more than a digital camera, a folding table and a knack for leveraging a community.

A lot of people in our business are petrified by these changes. They sense their skills are obsolete. They see the market for what they do and the products they make continuing to shrink. And in the rearview mirror they can glimpse the new generation — fearless, digital, connected — rapidly gaining ground.

Yet many others are confronting this turmoil head on. They’re redefining companies. Launching labs. Trying new models. Building scalable products.

So what should you do? You can read Razorfish’s new Feed 2009 report and learn that digital may offer all the answers, creating opportunities for the deep engagement that builds brands and preference.  You can wait for Forrester’s Sean Corcoran to complete his interviews and research and give you the collective view on where things are going. Or you can take things into your own hands.

Here’s my suggestion for what it’s worth. Four steps to making sure you’re here for the future.

Unlearn the old.

Embrace the new.

Experiment like mad.

Fail fast.

Do that and you might be the one who solves the puzzle and figures out the answer.

Oh, and if you have better ideas, feel free to leave them in the comments.

Image:  frozenchipmunk

29 comments
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Jessica Tillyer
Jessica Tillyer

This is a great article. Well articulated and brings up points of observation we all should be aware of. The missing link though in this article and in the collective thesis of your blog is that consumers are humans and that we are driven by emotions. It is the emotional connection of *social* media that has made it the game changer it is. It is not engineers that made Facebook or Twitter the billion dollar companies they are but rather the fact the someone realized "oh, people want to connect and share." I will not either condemn or argue for traditional advertisers, but a lot of them get the idea that Story is king. That's why companies even like Apple still invest so much with traditional advertisers.

I work extensively with Coca-Cola. The only time Coca-Cola stopped making remarkable profit was when they stopped leading with story and started leading with accounting. It's true.

edward boches
edward boches

Jessica,
Thank you for your comment. I agree wholeheartedly. But for you to even suggest that such a premise is missing from this blog or my writing implies that you haven't read anything that I write or talk about, or have selectively chosen what to focus on. I have spoken frequently about stories, creative, emotion and how that will drive the future of all things social quite often.
Some examples:
http://edwardboches.com/presentations
http://edwardboches.com/creativity-in-the-age-of-social-media-the-entire-presentation
http://edwardboches.com/the-sweetness-of-lemons
http://edwardboches.com/social-media-changes-everything-except-the-need-for-creativity

Köksal Abdurrahmanoglu
Köksal Abdurrahmanoglu

Thanks for the great post! You and the contributing commenters had hit it so well.

I think, we the agencies are now in competition of becoming the innovated brand new advertising agencies getting ready for the upcoming advancements in social media, web, mobile, IPTV, digital outdoor and many other technologies shaping the new world of communication and advertising. I believe the race goes both ways though. Whether it is digital or traditional, we are all racing for becoming the all-mighty "New Generation Agency". Don't you think?..

It would be a great pleasure if you had contributed to our group in LinkedIn discussing the Future of Advertising:
http://www.linkedin.com/groups?gid=2090773&trk=hb_side_g

Also please check out a sleek SlideShare presentation on Future of Advertising & New Generation Agencies: http://bit.ly/84pcyO

Best,

Köksal Abdurrahmanoglu
-----------------------------------------
President & CEO of adinteractive
Founder of istanbul.com & adinteractive

twitter: @koksal
.-= Köksal Abdurrahmanoglu´s last blog ..My Take on Future of Advertising & New Generation Agencies… =-.

kelleytroia
kelleytroia

Two points on this one. 1. Regarding circulars - while I completely agree with you that they're time is coming, there are still many many consumers who do use the circular and those online virtual circulars suck. Now is definitely the time to find an innovative solution that doesn't inadvertently exclude the mass consumer who is used to looking at a circular a certain way.

2. The thought that has been sticking in my mind lately regarding all your points centers around Google's approach on Google Wave. Their assignment was this "imagine email hadn't been invented yet." They came up with their present day solution to email. That's how I've been thinking about reinventing the process of campaign development through execution. The talk of integration is getting old. People need to shut up about it and DO IT. Continuing to talk about integration, in my opinion, is contributing to the problem by recognizing and reaffirming the silos.
.-= kelleytroia´s last blog ..Conversation Friday - aka Empowering Friday =-.

Arafat Kazi
Arafat Kazi

Great post! I will add two things to your golden rule:

Be curious. The best thing anyone could possibly do is be curious about art, music, movies, whatever. Shakespeare and Van Gogh are obvious choices, but curiosity is deeper than that. Stop and think of why highway signs are made the way they are, who makes them, and how they could be made better. Think about narrative arcs in personal youtube videos and why some succeed and others don't. Think about why the 55 bus runs only once an hour but the CT1 runs every ten minutes. There are teams of people dedicated to solving every one of these tiny problems, and the rationales that they use could be applied to other fields too. The coffee mug you're drinking from is the product of days of design and months of production. There's someone out there who is proud of having created that. Think about the things that you don't usually think about, and you'll find solutions that wouldn't have occurred to you.

Be in love with what you do. You'll do a much better job. And contrary to what people think, there's a lot to learn and love about pretty much anything in the world. Especially if you're in advertising--if you're complaining about something, then you're not embracing its possibilities. And if you can't embrace its possibilities, how can you sell it to someone in a few seconds?

Arafat Kazi
Arafat Kazi

That is a truly great mug. And I agree--for the workplace, gin beats whiskey hands down.

Ally Polly
Ally Polly

In answer to question # 3 about agency structure and who does what:
Big agencies need to bring their interactive/ digital divisions back inside and they need to redefine the entire brand process to include multi platform concepts and execution.
A creative group now needs to include a User Interface Designer, Web developer and IA. Media and strategy need to work together from day one - and account services should be managing the transition and movement of dollars from one line to the other and back-
Instead of thinking of clients on the continuum of " being creative" or not, they need to be thought of as " being integrated across multiple platforms" or not. The agency becomes the Real Estate broker of the new brand world- location, location, location.

Ally Polly
Ally Polly

Edward-
Yes, of course. Thanks.
The Agency's role remains to originate and lead the brand message, with the updated mission to curate and aggregate

edward boches
edward boches

Ally,
I think you just wrote the instruction manual. The digitalagencies (Big Spaceships, R/GA, et al) do this now. General agencies still figuring out. This is exactly how we now do it, though you are right, the new client eval isn't creative or not, it's multi-platform or not and which ones. Also, I do think a brand needs a driving idea (not execution, but rather what it stands for that can be expressed in behavior, product and content), a long lasting platform, and lots of little ideas distributed where the community lives online, and an open invitation for that community to co-create, share and connect with each other.

Sarah Merion
Sarah Merion

Interesting ideas. I see the future of advertising as liquid, fluid, integrative, and completely undisruptive of consumers lives. Advertising has the ability not to be "advertising" yet still be able to accomplish the goal. We are getting there...

Craig Elimeliah
Craig Elimeliah

Brands need to be more intimate with the message that they are emitting and agencies have become too much of a veil between the brand and its products or offerings. I have been in meetings where brand folks are actually asking the agency if things translate or not... that is the main problem, the people selling things are no longer selling. There are massive agencies sitting in between the public and the brands and contorting the message horribly. Brands need to take back the reigns and learn how to sell again. The art of the sell MUST originate from the seller. Specialization companies like digital and outdoor are here to help annunciate the message, to help amplify the message but not to dictate and force that message down the public's throats. We are undergoing a transformation in this country where the FAT has been called out and in order to survive we must become a more nimble and lean nation and our industry must do the same. We need to think with, execute for and tweak up our clients messages but they need to originate from the brand and the public must be able to speak back. Welcome to the future, kinda reminds me of the past. http://webicrat.blogspot.com/2009/10/pendulum-rest.html

Mel Exon
Mel Exon

Edward

Great post, thank you. First, I wholly buy the approach you describe - it's no coincidence that we founded Labs to do exactly this: lean into disruption, seek it out and embrace it; get used to failing fast; learn & move on. Two points on this:

1. I'd wager most of us are nonetheless still afraid of failure, particularly given the economic climate. Alternatively, there is something akin to wind resistance, or drag, in most organisations. Please don't stop writing posts like this one. We need encouragement and as many examples of experimentation working / not working to learn from.

2. Leaders need to walk the walk. It is not enough to look on from the sidelines/glass-lined office, we need to roll up our sleeves. To use your words: "Gotta get your hands dirty. In a digital way." I am not underestimating how hard it is to do. So many of us are just "too busy" to even dip a toe in the water. Too busy to experience a social network ourselves..too busy to blog...too busy to go on an Agile course. Why should we make the time? The only way I can explain it is to tell myself this: imagine attempting to sell the concept of TV advertising to a host of clients (with hard-won budgets held tightly in their hands) *having never watched television*.

It's a super over-simplified and extreme image, sure, but I'd argue too many of us are still inadvertently or otherwise prioritising the management of decline over finding pathways to new outputs and new revenue streams.

Increasingly, truly great CMOs are getting this. Check out Randall Rothenberg's post citing findings from a recent IAB survey - http://j.mp/7pRBaQ

Overall, I remain optimistic and excited. In many ways it comes as a relief in fact. (On a very personal note, I was part of a generation in the UK that was famously apathetic - we were lucky to grow up in incredibly stable times, with - as I've said before - little more to look forward to than 2.2 children and a little light jogging. Frankly I'm grateful for the disruption).

Fortes fortuna adiuvat.
.-= Mel Exon´s last blog ..“Information Wants To Be Free” - The Razorfish FEED report =-.

edward boches
edward boches

Mel:
Brilliant line: "I’d argue too many of us are still inadvertently or otherwise prioritising the management of decline over finding pathways to new outputs and new revenue streams." I have seen that in many places.

Yes, no one has time. Yes, there is something new to learn every single day. I am fortunate in that this is now a big part of my job. What I'm supposed to do. I would suggest that every organization, if possible, find one person who really wants to be out there -- experimenting, creating community, blogging, trying new things -- and find a way to let them or at least give them some time to do it. And secondly, create a mechanism for them to bring learning back to the organization. I know two things for an absolute fact:
1. No one can begin to imagine or create in all the new spaces if you don't experience them.
2. Most people aren't interested in what can be done there until the day that they suddenly need to do something there, i.e. when a client asks for it or an assignment calls for it.

But the latter results in two problems. The first is that you're late to the party with a limited frame of reference. And the second is that you're missing out on the chance to invent new things and ideas before anyone asks for them.

Tanya Goodin
Tanya Goodin

I really enjoyed your post Edward, I'm just not sure about the tone. Are agencies and brands really all running scared?

At my agency Tamar, we view these challenges as exciting opportunities. Nothing to be scared of, we just need to act in a different/new way and engage the consumer in the 'right' way for them.

If you can’t push them anymore, hook them. Don’t shout at them, learn their language. Don’t expect them to hang out at the centre of your universe, ensure that you engage them in their universe. The medium and the channel does not dominate anymore, what does is: providing the right message in the right place at the right time.

Tanya Goodin
Tanya Goodin

You're right of course. 'Message' sounds as hopelessly outdated as some of the old advertising models. 'Content' it is. Even Stephen Fry said last week that he's "no longer a performer, but a 'content provider'".

edward boches
edward boches

Tanya, maybe not agencies but plenty of individuals. Your approach sounds good to me. Except for one thing: the word "message." I'm guessing you default to that word when you actually mean "content," which can be so much more than a message. Utility, application, community, game, experience, etc. Thanks for your comment. I get at least as much out of them as readers get from the posts.

Jeff Shatuck
Jeff Shatuck

Great post, and I think the most important point in your suggestions is to fail fast, except I would modify it slightly to simply say: learn to see failure as something you can learn from.

Ad agencies are supposed to take risks. Yet, none I'm aware of has made failure part of the process. Clients and agencies are both to blame for this sad state of affairs. I mean, maybe punishing the risk takers is the right approach, but I doubt it. Oh, and by taking a risk, I don't mean an "edgy" headline. I mean something DIFFERENT, in media, in execution, in targeting, SOMETHING (not augmented reality, either, what a snore fest).

Jeff
www.cerebellumblues.com
.-= Jeff Shatuck´s last blog ..Why can't I be more like this plant? =-.

edward boches
edward boches

Agree very much with the risk comment and the client comment. Interviewed a senior account guy recently from a very respected agency. He complained that he wanted to get out because all his creative guys thought about were making the next million dollar TV spot and that he didn't think that was the future. At same time, as soon as his clients lean that way, it becomes easy to default to one's comfort zone and the stuff with which you're familiar. None of that is going away, but look at Razorfish's Feed 2009 and you can see that while the current report refers mostly to the digitally connected, as there more digitally connected, the new ways of engaging (digital experiences, platforms, community, social) will become the dominant. At least the dominant among those who we want most to influence.

Mike Morris
Mike Morris

I too believe that information and content want to be free (or at least the public wants them to be free). I would argue, however, that consumers have turned to the internet to view TV shows not because of an intolerance of advertising, but rather because they want access to content on their schedule. I suspect that many people are willing to put up with minor annoyances (ads in the case of Hulu) for the ability to view content on demand for free. Consider that before Hulu, consumers had been willing learn to use BitTorrent to view pirated episodes with foreign subtitles - not exactly convenient, but it was still free. Although, depending on the pricing, terms of use and range of available content, I could see Hulu becoming profitable in a similar manner to Apple's iTunes Music Store.

One another topic, the rise of inbound marketing is quite exciting because it encourages companies to engage with their heavy users (the ones who are likely responsible for the majority of revenue). These consumers want a positive relationship with the brands they patronize, and marketers will be able to respond to their needs more effectively by becoming part of the conversation.

Finally, your point about outdated habits is dead on. Instead of fighting to maintain the status quo, marketers do need to embrace the changing landscape and find new ways to reach consumers.

edward boches
edward boches

Mike,
Hmm, had a sentence about on-demand in there and lost it along with way. True. On-demand expectations inform everything: our expectations about service, customization, choices, etc. Though I do find that the more digitally native an audience is the less they're willing to accept intrusive advertising. Re: inbound techniques, this is becoming more and more the way that startups are launching and even generating awareness. Do we write for attention? Or for Google? My friend Brian Halligan, the CEO of Hubspot, is building a pretty good business around the idea that great inbound may be all a brand needs. We shall see.

Nick Pipitone
Nick Pipitone

Hey Edward,

Everything you write here is spot on -- we must all embrace these new changes. In a way, I see them as more opportunity than changes. Opportunity is something great creative people, by nature, have never been afraid of.

The bigger question (and what could be part 2 of your post) is this: who does what? I work within a "traditionally" structured ad agency: writers, art directors, account team, interactive. We all are ready to jump in (and have) but our biggest road block has been the definition of roles within a traditional agency. There seems to be not just a shift in the ways we communicate but also how we structure our industry to best serve these new avenues. How does Mullen do it? How are these new roles changing the job descriptions of traditional account and creative people? And how does the "social media specialist" fit in? Is it best to find someone from outside to handle it or designate a willing member of the team and expand their job to spearhead social media projects?

edward boches
edward boches

Nick,
You're right. Another post. Two thoughts however. One, soon everything will be social. TV, media, mobile, retail. Consumers will connect with consumers around brands and decisions, so it's not just the social person who has to learn this stuff. Two, if you think about this from the perspective of the consumer, her relationship with content and media not just brands and products, it makes sense to have a team that includes a UX (user experience) person along with a social media person as part of every brand/creative team, depending on who the consumer is and the role of the community. I'll think a bit more on that one and try to be specific as well as share what we do and aspire to do even better.

howlvenice
howlvenice

I love your four points. I am chairing a "Creative Change" council and here were the six goals for it: Anticipate Change, Embrace Disruption, Dream Strategically, Implement Quickly, Celebrate for an Instant, and Do It Again Better. I try to live that way..not just at work. It's much more fun. I'm sure you'll agree.

howlvenice
howlvenice

Yes, agreed. That's why implement quickly comes after embrace disruption. Do you know Morten Lund, a Danish entrepreneur? I asked everyone to watch his presentation at BIC in 2008. He's fascinating.
http://vimeo.com/2081957.
.-= howlvenice´s last blog ..The snake charmer wishes everyone good vibes =-.

edward boches
edward boches

The key for me in your list is "embrace disruption." Observing it, knowing about it, reading articles on it are not the same as embracing it. Gotta get your hands dirty. In a digital way.

Jen Corbett
Jen Corbett

Thanks for the great read! As a recent Ad grad. I have to say that it is truly an exciting, inspiring and invigorating time to be beginning a career in advertising when everything is shifting, old hierarchies bieng challenged and new ventures establishing their place. Others would be intimidated and unsure, I'm really looking forward to being part of the changing face of adland in the next few years.

uhuh
uhuh

an ad grad? no offense but you would have gotten further in advertising if you'd gone to engineering school.

edward boches
edward boches

Jen,
You probably have an advantage. If you're like the many I've met, you write, design, blog, socialize or at least think across every medium. Not to mention you use it all. It is an amazing time to be in the business. More exciting than when Bernays invented PR, or Bernbach redefined creative. Opportunity abounds if you're willing to stay curious and think like a choreographer as much as a creator.

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