The end of advertising as we know it

“Half the money I spend on advertising is wasted. The trouble is I don’t know which half.” This has been a truism in the world of advertising for more than 100 years since John Wanamaker made this statement. It’s been a truth, almost an assumption, said no less than by the father of modern advertising.

No Longer true! In the next five years, we would see many advertising assumptions demolished, an end of advertising as we know it, a paradigm shift - from traditional, push based advertising to a digital, permission based advertising.

We can summarise the crisis of advertising today to three Cs – Clutter, confidence and cost.

The first C - Clutter – In a single day, from the time we get up to the time we go to sleep (and may be even in our dreams!), we are exposed to thousands of messages. How many do we remember?

Second C, confidence. Customers are now cynical of big brands. they have lost confidence in them. They are seeking value, not brands.

For proof, just go to your nearest Woolworths and see how people are picking up house products, white label products, no-name products. Well, they do pick up established brands but very selectively. They look for value in their purchases. Do we remember what brand you buy from Aldi? Except that it provides great value. 

Third is cost. This is simple logic. The market is getting crowded with more competition and more ads in every category. On top of that, the customer is getting less and less impressed by ads. Obviously, the cost to make a sale is getting steep.

The three Cs are just the major problems that advertising is facing today. There are many more.

So, how is the world of advertising responding to this crisis. Well, it’s changing. New leaders are emerging, new ideas are being tested and new players are challenging traditional giant ad firms. And these new players are: Google, Yahoo, DoubleClick.

Let’s have a look at three of the major changes that are happening in this field:

For starters, targeted advertising on the Web is growing. Advertisers spent 60 billion dollars on this channel last year in United States alone. That’s a huge amount considering the spend 10 years back was almost Zero.

Second, pull advertising is gaining ground. It allows customers to find products and advertisers as opposed to push advertising which is all about sending unwanted, unsolicited messages. Did I hear you say junk mail, pushy copy, dodgy promotions. On the other hand, what could be better example of pull than a search engine such as Google that shows highly relevant ads to you only when you search for something.

Third, conversations. Some companies have started to engage in conversations with customers. They write corporate blogs, invite comments, receive complaints and suggestions from customers. They build communities on Facebook and MySpace. They buy islands on Second Life.

There are many more changes and innovations happening every day. Behavioural advertising, ad networks, ad exchanges, mobile marketing, widget advertising, online reputation management, social media marketing. I learn a new term almost everyday.

To conclude, every marketer and business manager recognise this transformation, innovate and adapt to this new paradigm. Your company must master it before the competitors master it. Get ahead of the change, not behind it.