You know, people have been asking me if I saw this article and it wasn't until today, while surfing around Lucian James Agenda site (an excellent resource!), that I came across the actual article. An excellent overview about the challenges facing the advertising industry and some thoughts about where it might all be heading.
More people are rejecting traditional sales messages, presenting the ad industry with big challenges:
It may have been Lord Leverhulme, the British soap pioneer, Frank Woolworth, America's first discount-retailer, or John Wanamaker, the father of the department store; all are said to have complained that they knew half of their advertising budget was wasted, but didn't know which half. As advertising starts to climb out of its recent slump, the answer to their problem is easier to find as the real effects of advertising become more measurable. But that is exposing another, potentially more horrible truth, for the $1 trillion advertising and marketing industry: in some cases, it can be a lot more than half of the client's budget that is going down the drain.
The advertising industry is passing through one of the most disorienting periods in its history. This is due to a combination of long-term changes, such as the growing diversity of media, and the arrival of new technologies, notably the internet. Consumers have become better informed than ever before, with the result that some of the traditional methods of advertising and marketing simply no longer work.
How will the money be spent? There are plenty of alternatives to straightforward advertising, including a myriad of marketing and communications services, some of which are called “below-the-line” advertising. They range from public relations to direct mail, consumer promotions (such as coupons), in-store displays, business-to-business promotions (like paying a retailer for shelf-space), telemarketing, exhibitions, sponsoring events, product placements and more.
These have become such an inseparable part of the industry that big agencies now provide most of them. Although some are less than glamorous, marketing services have grown more quickly than advertising. Add in the cost of market research, and this part of the industry was worth some $750 billion worldwide last year, estimates WPP, one of the world's biggest advertising and marketing groups.
The article ends with this:
Rupert Howell, chairman of the London arm of McCann Erickson... points out, TV never killed radio, which in turn never killed newspapers. They did pose huge creative challenges, but that's OK, he maintains: “The advertising industry is relentlessly inventive; that's what we do.”
Let's hope that we start to see some of that creativity soon!
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