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The future role of Advertising in Spain

What’s changed?

As marketers our world has dramatically changed in the last couple of years. There are many factors cited as the cause none more so than the more obvious economic situation that has hit countries such as Spain so hard. The truth however, that many still choose to ignore, is that the tools we used to deliver our trade have dramatically changed and changed forever. The era of Broadcast Advertising is in undeniable decline. Until this fundamental culture shift is acknowledged by both client and agency the negative financial effects will continue to be felt by both. Economic problems aside when we fully re-emerge from the recession, which inevitably we someday will, the problem will still exist. The reach, scale and control of attention has been lost. Those that take the opportunity to adapt now will see the light at the end of the tunnel is that a far more powerful and effective set of tools are at our disposal.

Media Fragmentation

Two important things have happened to the media landscape that has driven this cultural shift. The first is an explosion in media choice and the rise of Personal Media. Gone are the days of four TV channels that enjoyed the attention of whole populations giving advertisers unparallel reach and scale. Instead we now live in a world saturated with media choice. Media available to us how and when we want no matter how niche. From RSS, Sky + to the rise of portable media devices (iPod and the smart phones) we simply are paying less attention to the world around us unless it’s directly ‘associated’ to us. Few people want Ads no matter how entertaining. It is what we value as ‘associated’ that becomes key to winning attention. This is what we will explore here.

Socialisation of Media

The second is the rise of social media. Whilst this once meant MySpace or more recently Facebook it now represents all media. The socialisation of all online media (share buttons and comment boxes) and the ease to publish now means everyone is too busy talking / looking at one other to see ads even if you temporarily manage to distract them with an entertaining viral. The most popular sites are social sites where ads simply don’t work despite huge attempts at improved targeting. MySpace, Bebo haven’t made money from this and Facebook just broke even only because old ad money has just followed where the eyeballs have gone. But CTR is still reported at 0.07% which means 99.3% is seen as irrelevant by the user. It’s the growing success of Fanpages that are an indication of what is about to come.

Raising Questions

Both disruptions have led to the fragmentation of big media and the ability for brands to monopolise attention. It has now impacted the value brands are willing to pay media owners and agencies for that attention and raises questions as to what the attention achieves in the road to consumer purchase / repurchase. With the decline of big media also come the fall of big idea advertising as well as the big campaign. This isn’t such a bad thing because the world is now in real-time, the Internet never sleeps, and so your presence needs to be continuous and adaptative.

Recent digital innovations have allowed us to make incremental improvements to the overall impact of advertising activity but on the whole success / relevancy has largely been looking down the long end of a conversion funnel. The more people that see it the more purchases you were likely to get. Most people won’t be interested BUT some will. More money begets more money. Big ad spends required. That’s why finding a new more efficient way should be on the minds of every marketer. Who has big budgets to throw at a conversion funnel that will always see over 75% waste almost every time?

The era of the Internet Advertising where every click, view and interaction, or lack-of, is measurable has served to exposure just how ineffective the one-to-many broadcast approach is. It lifted off the veil that advertising has enjoyed hiding under and highlighted its dependency on media monopoly. The fact is the rarely accounted for ‘friend recommendation’ has always been the primary purchase decision maker. The socialisation of media just amplifies it.

Peers are key

So as a consumer when I can drown out noise that I find irrelevent and focus in on my personal media the only way I get introduced to new things is usually by those ‘associated to me’ AKA my peers. With every day we are becoming increasingly connected to those direct or indirect peers and the 3-degrees-of-seperation is on steroids.

What are the impacts to the advertising industry?

Firstly a convergence of disciplines is already taking place within large businesses as each departments activities are effected and reinforced by the other. This demand means agencies are having to become integrated as well. Good customer service in an open world becomes good PR and marketing. So CRM will have a direct and now visible link to acquisition. This is being further fuelled by businesses scaling back duplication of roles, merging departments and functions in tough economic conditions. The result is Advertising can no longer be an isolated or the lead function. This means it is critical brands enter this new world at an operational level. As brands rush after the eyeballs in Facebook, setting up Fan Pages staffed by graduates or 3rd part agencies they are often ill prepared when a product of corporate PR crisis hits.

As the world gets better connected a globalisation of media means companies and their agencies are going to have to redefine how they are structured at the very least in a communications sense. Where previously brands could easily segment how they position themselves to local market nuances this can now become confusing in a global marketplace. Conflicting ideas, positioning and messaging confuse and seem in some cases dishonest to those who don’t understand the advertising world. If the output of Hollywood served to make us all a little bit American wait until you see the impact of universally used Facebook has on current and future generations. Boundaries will increasingly become drawn upon linguistic differences and timezones.

So what is Advertisings new role?

Traditional Broadcast Advertising won’t die it will just assume a secondary role to Companies energies instead being focused on trying to be, and demonstrating being, an open and therefore ‘honest and good’ business. Social media, soon to just be media, will make business ‘honest and good’ by force or choice. This may sound like evangelical naivety but look at the recent Nestle fiasco where a small group of activists supported by Greenpeace can damage a mother brand with great ease in the social space causing a ripple of negative coverage across all media channels. This is the crowd fixing businesses in the same way people contribute to Wikipedia through micro collaborative improvements. This was by change by force because Nestle isn’t equipped to be open to the crowds input but they could have easily welcomed this good intended energy and turned it into a big PR win.

The advantage is for those that take advantage of this new medium and innovate quickly they can use it as a point of differentiation before it simply becomes Main Street. Media has previously kept the consumer at a safe distance and allowed the skills of controlled communications to fill the gap. Now media is the very opposite; a gateway not a wall.  Traditional advertising must, as it already starting to, become inclusive.

Traditional Broadcast Advertising has in the past allowed a hundreds of thousands of inferior products and businesses to maintain undeserved market share. But in this hyper connected world a business can only rely on there really being a good business, making good products which it provides in a good way behind it to continue to be successful. It can and should celebrate this fact if possible and remind the consumer why they pick brand X every time. But it will not be the primary money maker and the industry will have to face facts that ad spend will go down as its value in the eyes of brands decreases. We are a long way from that inevitable day but there are many people who simply refuse or are unable to accept their job requires new skills and understanding.

Think Pull not Push.