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ADMA Forum: Mass Marketing VS Digital Media


ADMA Forum: Mass Marketing VS Digital Media


“Welcome to a post apocalyptic media world substantially devoid of brand advertising as we have long known it.” Now there’s an opening line to get advertisers sitting up in their seats. So it should come as no surprise that Bob Garfield’s Chaos Scenario and, more recently, Chaos Scenario 2.0 have attracted widespread interest.

It’s not a case of ‘if’ or even ‘when’. As Garfield points out, it’s already started; the spread of the internet and its social networks, DVRs and TiVo, mobile phones and the like. Mass advertising thrived in a world of mass media. But now mass media is coming up against digital and a multitude of communications channels that are giving the consumer total and uninterrupted control of their viewing. Audiences have become fragmented and their numbers are in decline.

As Garfield tells it, broadcasters haven’t really been in the program distribution business, they’ve been in the business of selling audience numbers, and economy of scale. But soon the dwindling audience numbers will not justify the high costs of securing air-time and then what?

The end of mass marketing as we know it

Mass advertising will be replaced by a better model where marketers do business directly with consumers, according to Garfield. “It’s a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalised and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing – and even branding – are conducted without much reliance on the 30-second spot or glossy spread.”

The ‘brave new world’ will take much more than courage to survive. In fact, casualties will be many, according to Garfield. When asked what advertising agencies need to do, Garfield doesn’t hesitate in his reply. “I’d skulk around for the day, leave work at 5.30pm, then reappear at 2.30 in the morning with two litres of petrol and a match,” he quips.

Jokes aside, assuming that this is indeed a joke, Garfield does not see traditional advertising agencies surviving. “Many believe that adapting to a digital landscape means re-purposing the 30-second spot. It’s not a question of transferring or adapting. The new world will function in a very different way. It’s a shame because there’s a lot of expertise and skill in these agencies, but culturally, financially or otherwise they are just not prepared for operating in this new order.”

In place of traditional agencies, Garfield sees more consultancies emerging. But, without the media revenue, they’ll have to find some way to be remunerated for their thinking. To prove his point he mentions a meeting at Ogilvy & Mather, in which a theme park client was about to celebrate its 45th anniversary and wanted to give away 45,000 entry tickets (no doubt using the anniversary to get even more people through its gates and spending). In the midst of the briefing, the agency’s interactive creative director excused himself, went to his office and simply posted the tickets online at Craig’s List, (a website offering lots of free stuff to consumers at no charge to advertisers). Within five hours not only were all the tickets snapped up, the client had saved on media costs and also on the costs of putting together an ad. As Garfield points out: “How do you bill for a good idea? In this case, you can’t pretend you put it to a great infrastructure of decision-makers. The client was there, he saw it took minutes.”

Still, it’s not just mainstream agencies that are in peril, advertisers also are facing the same conundrum. “Larger companies are sticking to the status quo because that sort of still works,” Garfield explains. “They base their business on it. These companies reward staff with bigger bonuses for increasing their market share. They’re not incentivising staff for finding a path to the future, but for squeezing the most out of the present.” Even so, Garfield can sympathise. “The future does not generate revenue today. As a chairman of a publicly-listed company, you have a duty to shareholders.”

The transition won’t be easy
Garfield acknowledges that the online space has a long way to go before it can “absorb the advertising budgets of the top 100 marketers, match the reach of traditional media or even fulfill the content desires of the audience”.

Despite this chaotic transitional period, Garfield believes that digital media can and should become the great equaliser. “We’ve seen the positive impact that the internet is having in developing countries.” He cites South Korea where broadband penetration exceeds 80 percent. Garfield also sees the threat of a digital under-class, however, especially in countries like Australia where broadband access is not national. “Unless governments and societies make affordable bandwidth available to everyone we will have a digital divide.”

It’s not all doom and gloom for marketers
Even though change can seem daunting, Garfield implores marketers and advertisers not to see him as a bearer of bad news, especially not direct marketers. In fact, Garfield says that the rudiments of direct marketing are already suited to operating in the new world. “Direct mail has always put the consumer in control. What happens next is very much in the hands of the consumer, on their own schedule.” He adds that direct mail is about targeting the right message to the right person (even more so with digital variable data printing). Garfield emphasises that the basic principles that underpin direct mail will serve it well. There is most certainly a role for mail in the future because it is a channel that gives people total control over how, when and if they interact. In these ways direct mail is similar to digital.

As Garfield sees it, mass media will give way to all kinds of direct communications and campaigns of one will become the norm. Already advertisers are recognising this.

This year, a study by Gartner found that 50 percent of marketing staff in global companies will use enterprise software by 2010. This will enable them to merge all their customer and prospect information including transactions, inquiries and other communications from every touch point, to give them CRM and sales opportunities like never before.

Interestingly, another report from Aberdeen found that it was SMEs that were leading the way with this new technology. Given these findings, would today’s corporates be best served by looking inwards and leaving the digital trailblazing to the smaller operators?

“The corporations need to invest enormous amounts of money into creating the infrastructure that will form the platform for one-to-one communications,” Garfield asserts. “The larger companies will be slower at this; the small- to medium-sized businesses will be faster. Some of these smaller organisations will then grow and could be swallowed up by the bigger ones.”

The new world relies on a ‘pull’ rather than a ‘push’ mentality
“It’s all about information,” Garfield says. “If you have information, deliver it, rather than being cute or funny. Information is of real value to consumers in the new world. If you have a better mousetrap, you can still tell everyone. In the new world, good information quickly comes to the surface. You inform one person in the network and the word spreads. In fact, the new world will be a very happy place for people who come up with great products or services.”

While the transition to the new world is already underway, Garfield warns of even more changes ahead. “As advertisers flee the industry, television programming will be impacted. Stuff will percolate up from the other side,” Garfield says. “We have an entire generation who are into short videos, produced by amateurs – the YouTube-isation of entertainment.”

As ad spend diminishes, Garfield believes we’ll see more live television programs, reality shows and the like. At the same time, consumers will become more sophisticated at producing their own entertainment, so what the networks are producing and what amateurs are producing will become much of a muchness.

“With a declining ad revenue, the quality of programming we’ve come to expect from the networks will simply not be sustainable,” Garfield says. “Not unless they can get consumers to start paying for their viewing.” Garfield cites HBO in the US as the best model he’s seen. “This cable TV network operates solely on subscription,” he adds.

Despite his predictions of a new order, Garfield is quick to emphasise that he does not see a Second Life world. “I don’t think that’s going to happen. We’re still humans after all. People will still watch programs; it’s just that they’ll be delivered via the internet. We will still like to go out and touch goods. Bricks and mortar stores won’t go away.” That said, “It is absolutely naive to think that digital media’s impact on lives is not going to increase exponentially,” Garfield insists.

From Garfield’s perspective, the new world will be one of aggregation, information, optimisation and CRM that ultimately will be much better for marketing products and services. From now until then the transition won’t be easy – but it’s inevitable nonetheless.


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