THE METAMORPHOSIS

 In Blog

In my industry – media – things are more complicated than ever. It reminds me of Franz Kafka’s short story The Metamorphosis. But it’s a lot more manageable. I mean, what is worse than waking up as a beetle?

The situation today is more like looking in the mirror only to see that your face is upside down. Over time you can get used to it. At least, that’s what I keep telling myself.

blog-cartoonAt first, looking at yourself upside down is almost impossible to deal with. You’re just so familiar with seeing things the right way.

But after a while you learn to comb your hair down to up. It’s just really awkward at first.

It is no secret that our industry has changed dramatically in a short period of time. The rapid change has pitted various players against each other, resulting in an industry that is at odds with itself. There are both conflicts and opportunities that arise from variations of a single theme: the traditional model of advertising is morphing into a newer digital model.

There are many different ways to look at this morph-in-progress. As a supplier of media services to both agencies and direct advertisers, the interplay between the various dynamics has a very real effect on our business, and the business of our clients. Here’s why.

blog-img2To simplify a complicated issue, the traditional model comes down to “one message, many audiences”. Sure, you might change the voiceover in a radio spot so that it is different than the television version. But with the traditional model, the message for all audiences remains fairly consistent. The millennials describe the traditional model, albeit somewhat colloquially, as “spray and pray”. But it’s really just “good old branding”.

If you were an advertiser who could afford television and radio, you sent a message that you could afford broadcast media even though everyone knows that some portion of the spend would be wasteful. To use an example, say you booked and ran 30 second spots during Hockey Night in Canada for a car company. Sure, you would reach a couple of million people. But how many of those are really in the market for a car, really?

And how many of those people are in the market for the exact brand of car you are advertising? Maybe 10%? Or way less?

In the traditional model, things are not always about the here and now, but about the future.

So perhaps Hockey Night in Canada viewers will buy your car later. And this introduces the concept of brand equity. Okay.blog-img3

Back to the new digital model. With the new digital model, all kinds of sophisticated advertising technology (algorithms, artificial intelligence) operates across the internet and on ad-serving computers (we have one). This technology is capable of informing marketers (us, you) with the knowledge of who is *actually* interested in buying your car in, say, the next three months. And until that time arrives to visit your showroom, we have the means to follow that target around from one device or screen to the next, varying our messages as they edge closer to their pre-destined fate. This introduces the concept of personalization.

Traditional advertising was not hugely personal. Sure, some of the emotions were meant to stir personal feelings; that’s award-winning stuff! But traditional advertising was meant for mass consumption. And still is. We’ll see in a minute why traditional advertising remains hugely important.

The new model of digital advertising hovers all around us: it can resemble mass advertising but is supposed to be personal. Why is that? Because it’s cool when ads are personal! That’s a new innovation! We like innovation. But we also like efficiency: if we know more about the person we’re serving the ad to, we can make the ad more relevant. And less wasteful.blog-img4

So, ads that appear over internet connections are increasingly being served in more personalized ways. For instance, ad copy will change depending on the age, gender or income level of the person we believe is seeing the ad. That’s just for starters. We can do that with our eyes shut. The more data we collect, collate, sort, sift, analyze and examine, the more we get to know the anonymous person viewing our ad. What could be better? The possibilities to sell stuff is endless, right?

Sort of.

Familiarity, likeability, trust, convenience, price and all the other usual factors that drive a purchase decision still come into play. But there’s yet another aspect that has thrown a wrench into the works: the shift to mobile has meant a shift to smaller screens. And guess what? It turns out people don’t like ads on small screens. They do not like them very much at all, thank you very much.

This has caused a great many number of potential users to install ad-blockers. These ad-blockers work exactly as advertised: they pretty much block every ad that attempts to be served. If you try to subvert these ads in some kind of sneaky way, your brand will probably suffer. A lot.

In fact, estimates say that ad-blocking technology cost the US ad industry $22 billion last year. That’s a lot of ads. And suffering.

It’s also a big conundrum. Ad blocking has neutralized a big portion of digital media revenue growth which was literally growing faster than a weed (63% growth in online video in the US this year). But now we’re not quite sure what the future holds. Except for one thing: it will absolutely consist of more data! And ad blockers.

So here’s where we’re at. The modern day version of the PVR/DVR skip button (“just fast forward through the commercials”) is equivalent to someone taking 60 seconds to install AdBlock Plus to eliminate ads on their devices while watching ad-free Netflix. Eek!

So we’re in a strange place. Advertisers have more choices than ever. But what choices can be trusted? Even the industry itself is infighting. Recently, the Association of National Advertisers issued several recommendations regarding ad fraud and privacy concerns. Its key finding? That brands hire a Chief Media Officer to resolve and monitor conflicts between their ad agencies and technology providers.

This advice was dispensed, presumably, because no one in the industry is going to hold any agency accountable for a new digital model that lacks standards but is also exciting and wildly out of control. It’s sort of like crowdfunding: look, we know there’s an issue with some of these campaigns but if you overly regulate the industry, you might choke the market. So let’s just leave it for a while and see what happens.

The result? Every day there are changes to the entire advertising ecosystem. Companies and technology providers are continually re-positioning themselves for an uncertain future. From cable networks to Facebook and Adobe, hundreds of “adtech” companies look for new ways to integrate data to better personalize ads. And in so doing, deliver a better “experience” for ad watchers. We’ll see how that works out. (For the crowdfunders, it seems to have worked out pretty well. But not so much for the investment banks who have never seen an I.P.O. drought like this before).

In the meantime, more and more capital continues to be invested in both traditional and digital advertising, with a greater percentage of new money being allocated to programmatic. Do brands win? Sure they do. With the right media buyer!

Although my brain has yet to fully comprehend and adapt to the new reflection I’m seeing, on some days upside down seems to be a better version. Until it stays that way for good, we’ll continue to place ads in front of high quality audiences on screens big and small. Sometimes we’ll use computers, sometimes not.

In the latest sign of retro modern, we inked a new agreement last week with Visio Media, a really cool digital elevator advertising network. So our clients can broadcast ads in elevators across B.C. and Alberta. It’s pretty much impossible to escape an ad in an elevator. Even if it is digital…

 

Signed, David St. Laurent
David St. Laurent
President
Western Media Group
david [at] westernmediagroup [dot] ca
@westernmedia

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