Future of Advertising - Networked Media & Networked Agencies
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This document provides an overview of a presentation on the future of advertising. It notes that the presentation contains half-truths, humor, harsh language, and a subjective perspective. It discusses how television advertising today is based on ratings from a small sample of households. It questions whether advertisers and the ad industry really want better measurement if it reveals wasted ad spending. It outlines how the proliferation of new technology and changing consumer behavior are shifting advertising to networked and on-demand media. Finally, it suggests that the future of advertising lies in networked media combined with networked agencies relying more on independent professionals than large staffs.
Future of Advertising - Networked Media & Networked Agencies
- 1. THE FOLLOWING PRESENTATION HAS BEEN APPROVED FOR RESTRICTED AUDIENCES ONLY BY THE CLUB OF AMSTERDAM THE FEATURED PRESENTATION HAS BEEN RATED PG6+ AD PEOPLE STRONGLY CAUTIONED Some Material May Be Found Offensive For Traditional Ad People CONTAINS HALF-TRUTHS, HUMOR, HARSH LANGUAGE AND A SUBJECTIVE VISIONARY PERSPECTIVE www.brandedchannels.com www.clubofamsterdam.com
- 2. FROM TRADITIONAL MEDIA TO NETWORKED MEDIA
- 3. THE FUTURE OF ADVERTISING “Half the money I spend on advertising is wasted …
- 4. THE FUTURE OF ADVERTISING “Half the money I spend on advertising is wasted … … the trouble is I don't know which half.”
- 5. JOHN WANAMAKER US DEPARTMENT STORE MERCHANT (1838 - 1922) • Retail innovator – “Fixed price and goods returnable”
- 6. JOHN WANAMAKER US DEPARTMENT STORE MERCHANT (1838 - 1922) • Retail innovator – “Fixed price and goods returnable” – First department store in Philadelphia
- 7. JOHN WANAMAKER US DEPARTMENT STORE MERCHANT (1838 - 1922) • Retail innovator – “Fixed price and goods returnable” – First department store in Philadelphia – Contributor to campaign for Mother’s Day
- 8. JOHN WANAMAKER US DEPARTMENT STORE MERCHANT (1838 - 1922) • Retail innovator – “Fixed price and goods returnable” – First department store in Philadelphia – Contributor to campaign for Mother’s Day • Father of modern advertising
- 9. TV ADVERTISING TODAY EUR 855 million ad spend on Television in 2008 ...
- 10. TV ADVERTISING TODAY EUR 855 million ad spend on Television in 2008 ... … so EUR 427.5 million is wasted!?
- 11. TV ADVERTISING TODAY Q: (How) do we know?
- 12. TV ADVERTISING TODAY Q: (How) do we know? A: We don’t
- 13. A RATINGS TALE
- 14. A RATINGS TALE 14-16.4 2-10 • Dutch population growth 1980-2008 • Growth of national TV channels • From 5 to 7.2 million Dutch households between 1989-2006 • Single households now 34% 260 240 220 200 180 Population 160 Households 140 Single Households 120 100 • + special interest + international + digital channels: 60-90 channels
- 15. RATINGS = BASIS FOR AD SPEND 1280/2900 • Households/participants determine what ALL of us watch • 0,017% of Dutch Households/Population • Every participant represents 5,655 others
- 16. RATINGS = BASIS FOR AD SPEND 1280/2900 855 • Households/participants determine • Million Euro is spent on TV what ALL of us watch Advertising in the Netherlands • 0,017% of Dutch Households/Population • Every participant represents 5,655 • That’s Eur 294.827 per participant others (and they get paid Eur 22,50 pp per year)
- 17. TV ADVERTISING TODAY I don’t buy it …
- 18. TV ADVERTISING TODAY I don’t buy it … (Why) do you?
- 19. TV ADVERTISING TODAY I don’t buy it … (Why) do you? Do we really want better measurement?
- 20. TV ADVERTISING TODAY I don’t buy it … (Why) do you? Do we really want better Or are we too afraid of the measurement? real results?
- 21. NETWORKED MEDIA
- 22. ARE WE STILL WATCHING TV? PROLIFERATION OF MEDIA BETTER MEASUREMENT 1. (New) technology 1. WTSIWYG 2. Changing consumer behaviour 2. Online/mobile vs mass media
- 23. ONLINE VERSUS MASS MEDIA 2001 • Internet boom Internet bust • Unrealistic expectations • Too much money around
- 24. ONLINE VERSUS MASS MEDIA 2001 • Internet boom Internet bust • Unrealistic expectations • Too much money around 2003-2008 • Reinventing the web: user-centric • Web 2.0, social networking
- 25. ONLINE VERSUS MASS MEDIA 2001 • Internet boom Internet bust • Unrealistic expectations • Too much money around 2003-2008 2003-2008 • Reinventing the web: user-centric • Business-as-usual • Web 2.0, social networking • No better measurement methods
- 26. ONLINE VERSUS MASS MEDIA 2001 2009 • Internet boom Internet bust • Screaming need for accountability • Unrealistic expectations • Advertisers are shifting budget • Too much money around towards online & mobile 2003-2008 2003-2008 • Reinventing the web: user-centric • Business-as-usual • Web 2.0, social networking • No better measurement methods
- 27. GENERATION NEXT IS HERE ON DEMAND MEDIA • Why wait when you can see it now? Coen & Maud
- 28. A BRAVE NEW WORLD Analogue Digital Interruption Permission Few channels Many channels Limited choice Unlimited choice Linear content Content on demand Broadcaster in control User in control
- 29. NETWORKED MEDIA MODEL FUSION OF DIALOGUE & BROADCASTING + Transmitter Receiver Dialogue (1-to-1)
- 30. NETWORKED MEDIA MODEL FUSION OF DIALOGUE & BROADCASTING + = Transmitter Transmitter Receiver Rec. 1 Rec. 2 Rec. 3 Rec. n… Dialogue (1-to-1) Broadcasting
- 31. NETWORKED MEDIA MODEL FUSION OF DIALOGUE & BROADCASTING + = Content & context Transmitter Transmitter organiser Receiver Rec. 1 Rec. 2 Rec. 3 Rec. n… User 1 User 2 Dialogue (1-to-1) Broadcasting Networked media model
- 33. WHY DO ADVERTISERS HIRE AD AGENCIES? • Creativity? • Strategic insight? • Account Management Skills?
- 34. Account manager Grey guy/board member (Eur 140 an hour) Traffic/project mgr (Comes in to say hello) (Eur 120 an hour) Strange guy (Fixes the door) Account director Jr. account executive (Eur 180 an hour) Sr. Art director (Eur 100 an hour) (Eur 180 an hour) Sr. copywriter (Eur 180 an hour) The client (gets charged Eur 900 an hour) Scene from “Mad Men”
- 35. ANSWER = RISK REDUCTION! Because we don’t know (for sure), we hire someone who is • Ad business = Risky business! • Possible outcomes
- 36. ANSWER = RISK REDUCTION! Because we don’t know (for sure), we hire someone who is • Ad business = Risky business! • Possible outcomes It sucks Client has been ill-advised Change of agency
- 37. ANSWER = RISK REDUCTION! Because we don’t know (for sure), we hire someone who is • Ad business = Risky business! • Possible outcomes It sucks Client has been ill-advised Change of agency It rulez Client takes all the credit Review/Pitch Client is promoted New client Agency stays
- 38. ANSWER = RISK REDUCTION! Because we don’t know (for sure), we hire someone who is • Ad business = Risky business! • Possible outcomes It sucks Client has been ill-advised Change of agency It rulez Client takes all the credit Review/Pitch Client is promoted New client Client stays Totally happy Agency stays
- 39. ANSWER = RISK REDUCTION! Because we don’t know (for sure), we hire someone who is • Ad business = Risky business! • Possible outcomes It sucks Client has been ill-advised Change of agency It rulez Client takes all the credit Review/Pitch Client is promoted New client Client stays Totally happy Agency stays Gets nervous
- 40. IS IT ALL BAD? NO
- 41. IS IT ALL BAD? ADVERTISING STILL IS NO THE MOST FUN BUSINESS TO BE IN
- 42. AGENCIES MISSING THE BOAT?
- 43. GROWTH MARKETS ONLINE/MOBILE • Technology skills • User interaction • Think & act campaigns, versus channels & relationships • Eur 159.6 mln in 2008 in online advertising Source: IAB.nl
- 44. GROWTH MARKETS ONLINE/MOBILE BRANDED CONTENT • Technology skills • Media agencies in driver’s seat, • User interaction together with broadcasters and • Think & act campaigns, production houses versus channels & relationships 1200 1000 93 119 800 85 600 Televisie Non-Spot 400 797 851 855 Televisie Spot 200 0 2006 2007 2008 • Eur 159.6 mln in 2008 in online • >Eur 200 mln in 2008 advertising (all media) Source: IAB.nl Source: SPOT/NUV/estimate 3MO
- 45. ONLINE + BRANDED CONTENT ONLINE • Building brand sites? • Display/search advertising? • Social networking? BRANDED CONTENT • Integrate ads with programming?
- 46. ONLINE + BRANDED CONTENT ONLINE • Building brand sites? BRANDED CHANNELS • Display/search advertising? • Create your own content • Social networking? • Syndicate in external media BRANDED CONTENT • Link with programming • Integrate ads with programming?
- 47. OUTSIDE-THE-SITE THINKING • Existing model – Every brand their own site (brand channels) drive traffic to it • User has evoked set of favorites – Youtube, Hyves, Nu.nl, ... – Google is your best friend • Challenge: meeting users wherever they are – Branded channels
- 48. INTERNAL VS EXTERNAL Branded channel Site extension Branded Branded channel channel • Managed Brand • Up-to-date content Channel • Goes beyond campaigns Branded Branded channel channel Branded channel
- 49. THINK OUTSIDE THE SITE Site 1 Site … Site 2 Site 7 Brand Channel Site 3 Site 6 Site 4 Site 5 traffic/lead generation
- 50. THINK OUTSIDE THE SITE Site 1 Site 1 Site … Site 2 Site … Site 2 Site 7 Brand Channel Site 3 Site 7 Brand Channel Site 3 Site 6 Site 4 Site 6 Site 4 Site 5 Site 5 traffic/lead generation content syndication
- 51. JEFF JARVIS ON BRANDED CHANNELS “I agree on the branded channel approach and think that media companies had better get themselves into a position of helping marketers in such a way.” Jeff Jarvis, e-mail 20-3-2009
- 53. Italian Economy 80% work in SME businesses
- 54. Italian Economy 80% work in SME businesses Hollywood Economy Depends on Freelancers
- 55. ITALIAN OR HOLLYWOOD MODEL NEW REALITY • Clients have less money to spend on more media • More production, less fluff
- 56. ITALIAN OR HOLLYWOOD MODEL NEW REALITY • Clients have less money to spend on more media • More production, less fluff CONSEQUENCES • 500k shooting trips to South Africa for a single 30 sec spot are over • 10 short films for 20-50k each • 200k for 400 videos
- 57. ITALIAN OR HOLLYWOOD MODEL NEW: NETWORKED AGENCY • Small core – Focus on brand development & brand management
- 58. ITALIAN OR HOLLYWOOD MODEL NEW: NETWORKED AGENCY • Small core – Focus on brand development & brand management • Extensive periphery of independent professionals (freelancers) – Project-by-project – Work anywhere, anytime
- 59. FUTURE OF ADVERTISING = NETWORKED MEDIA + NETWORKED AGENCIES
- 60. THANK YOU RICHARD VAN DEN BOOGAARD [email protected] +31 6 52 368 276