We are in the midst of a period of extreme change which is directly affecting everyone in the advertising business. Faced with advertisers moving their budgets from traditional brand advertising into online the response from many in the ad business has been categorical denial. The reality is that things are changing and changing extremely quickly- so quickly in fact that even those of us working in smaller agencies in vertical markets have to wake up and change the way we look at everything.
This extremely compelling opinion piece in Ad Age is, in my opinion, the most important thing I’ve come across in the last few years- though it is long I think it is very important to take the time to read it and digest the ideas and facts he recites.
“Agencies make money making spots and ads and buying the media for them. Barring a wholesale acquisition and divestiture, much of the nitty-gritty of digital marketing would have to be outsourced. And, with that, control of roughly half of what once was the ad budget. For instance, listen carefully to Jan Leth, executive creative director of OgilvyInteractive North America, as he tells a funny little story about an agency assignment for Six Flags.
“They had a promotion for their 45th anniversary. They wanted to give away 45,000 tickets for opening day to drive traffic. So we got a brief to do whatever: ads, microsite, whatever. But our interactive creative director just went off and posted it on Craigslist. Five hours later, 45,000 tickets were spoken for.
“No photo shoot. No after-shoot drinks at Shutters,” he adds, with faux regret. Then, with somewhat less irony: “Now, the trick is, how do you get paid?” “
We’re moving into a world of transactional marketing in which we will be measured by performance at every step. Traditional media is doing very poorly and there will be a wave of newspaper and local broadcast failures in the near future. This will result in a gap in our ability to reach audiences as online media is temporarily incapable of providing enough impressions to match the available dollars. This, in turn, will increase the costs, accelerating the growth of the Googles and online media companies across the board.
My takeaway? We will be running the agency assuming the distinct probability that print and broadcast, both local and national, will become almost irrelevant to our clients in the very near future.
Draconian? Maybe, but I don’t think so because this represents a huge opportunity for those who understand the change and go for it.