Newspapers and magazines are going to the wall and traditional TV advertising is collapsing. The old model is broken and, like Humpty Dumpty, can't be put back together again, writes Martyn Warwick.
The age of the scattergun approach, where consumers were basically blanket-bombed into submission and acquiescence via an endless and remorseless barrage of random advertising, is ending. The new age of Web advertising is dawning and, in the future, advertising will targeted with the accuracy of a sniper's rifle rather than a blunderbuss. Well, that's what enthusiasts believe anyway.
Last week at a conference held in Pasadena, California, (where the Beach Boy's little old lady hails from), Robert Iger, the Co-CEO of Disney enthused about this brave new world and professed himself "pretty bullish about what technology is going to allow in terms of behavioural tracking." Top brass from AOL echoed these hopes and told delegates that the future of advertising lies in taking advantage of new technologies that will enable the direct targeting of online consumers.
However, even though the old king is dead the new one isn't quite as lusty as might have been expected prior to the global economic downturn. The value of the web advertising market was US$23.4 billion last year but, as the latest figures show, it was down by a full five per cent in Q1 2009 and is believed to have fallen further in Q2. There are now real worries that even when the markets pick up again Web advertising may not reassume the impressive growth trajectory it exhibited before the recession.
Nonetheless, and as Jonathan Miller, the head of News Corp's Digital Media Group, says, "advertising is undergoing fundamental changes ...
and you have to tease them out of the recession effects."
He adds, "Marketing is on an arc to become more efficient. My dollar should go further. And that says the advertising pool may not grow at the rate that it's traditionally grown at, even out of this recession. However, by targeting consumers via demographics, profiling, and their social networks, you learn a lot about people and you can identify them".
AOL's CEO, Tim Armstrong, who used to be the head of sales at Google and therefore should know that of which he speaks, is also an evangelist of consumer tracking. He says, "This is about where people actually go, what they do and how they do it. It is not just about data, it's about the insight."
However, Ed Moran, the director of product innovation for Deloitte, whilst also an enthusiast adds the caveat that whilst it is fine to track tastes and to develop consumer profiles the whole thing will fall apart if, once company's really know their customers, they do no more than show them yet another advert designed to for mass market consumption.
Mr. Moran warns that next-generation Internet advertising will, in the main, be driven by the a specific demographic group - the so-called "millennials" 14 to 24 year-olds whose entire lives are centred around and are almost entirely dependent on social networks and the mobile web.
Moran says, "This group has trained itself to ignore traditional advertising such as on billboards, in the press or on mainstream terrestrial TV."
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