The End Of Advertising As We Know It?

September 25, 2008

IBM recently released a report entitled (not so subtly) ‘the end of advertising as we know it.’  Based on a survey of 2,400 consumers and over 80 advertising experts, the survey found that ‘the next five years will hold more change for the advertising industry than the last fifty years put together’.

That’s some claim…..but there’s more.  The survey forcefully argued that the push for control of attention, creativity, measurements and inventory will re-shape the advertising value chain and shift the balance of power.  For media professionals, it cites the biggest threat as the new open platforms which it foresees taking 30 per cent of the revenue flowing to existing media incumbents, including broadcasters.

Fear mongering or a vision of the future?  Well, at the coal face the singing canaries are chirping a slightly different tune.  Yes, media is changing rapidly.  As the head of a Top 50 advertising agency I’ve seen our press and TV media billings halve over the last four years.  That’s a significant drop and my peers at other agencies are reporting a similar structural trend.

So why am I more optimistic than I’ve been for years?  Online media, which is augmenting old TV and press media in stunning fashion.  It’s not only the reduced media costs, but also the better results.  In fact such is the strength of online media that the Payment By Results model so detested by offline media is proving to work. And work well.  Put offline and online media together and the results can be exceptional.

It’s no surprise therefore that the latest IPA Bellwether survey found that online was the only medium not to experience any media cuts.  In any recessionary environment PBR and it’s no-risk model is a must for any client because all media spend is accounted for and results guaranteed.

So, I’m going to be brave and say to IBM, “open platforms will not transform the landscape, online media will” - specifically lead generation and the acquisition of customers through PBR/CPA.