It may be heretical to say it, but advertising as we know it today won’t exist 10 years from now. Why, you ask? Because today, advertising is a business with two sides, but in the future, it will have to be more than that.
On the one side is traditional advertising. It’s mass media, which is largely untargeted and impersonal. To create traditional ads, teams spend weeks distilling complicated ideas into 30-second TV ads, posters, and radio spots that can entertain and change perceptions—but also interrupt the environment in which they are placed. While traditional advertising does use some data to test ideas and gauge their effectiveness, it’s largely a business based on intuition.
For many years, this approach has been extremely successful at building brands. Even Facebook and Google turn to traditional advertising when they want to boost their brand or build awareness or saliency. Of course, we aren’t able to link the money spent on this kind of advertising directly to sales, but clients know it works. They trust the system and rely on independent verification and long-standing metrics. Even though they know that people may be making tea during commercial breaks, they still see a long-term impact on their sales and brand recognition.
The other side is digital advertising. This is direct media, which is increasingly targeted and personalized to the recipient. Click on a link for a holiday package in the Maldives, and you will see ads for Maldivian hotels for the next month. Browse fishing gear on Amazon, and you’ll see ads for the same items with reduced prices on Yahoo. While some of the ideas for these ads are derived from the work of the traditional creative industry, if we’re being honest, more thought is given to effectiveness than creativity.
In addition, accountability is hit or miss. Half of all digital media spending goes to search, which is extremely accountable. But while legions of people in media agencies optimize programmatic media and audiences on Facebook, if you sell through traditional retail channels, there’s little real link between your spend and results. Digital is also an environment where trust and transparency are increasingly needed. We face ad fraud and the inability or unwillingness of some media platforms to do basic math or allow independent verification.
In other words, both traditional advertising and digital advertising are in challenging positions. The audience for traditional advertising is diminishing. I once heard a newspaper owner say that things were fine since people were living longer and there would be more people reading newspapers. This is hardly the basis on which to build a business plan.
Whether we like it or not, audience erosion on traditional media is accelerating and will continue to do so. The problems for digital media are a lack of trust, transparency, and accountability for results. We can and need to address the first two. We also need to show clients that investing in digital media can build brands and, most importantly, drive sales.
What does this mean a successful advertising industry will look like? While there are many different elements, three strike me as being particularly critical:
Keep creative ideas. Advertising needs to retain as its foundation the creative idea. Only ideas inspire consumers. Of course, these ideas now need to be expressed in a multitude of different ways, including as mobile apps and technology-enabled services.
Focus on consumers. Advertisers need to strengthen their focus on the customer and understand the many different ways people see and interact with a brand. Some of those ways will be digital and others will be physical, like events and traditional retail; but we need to bring them together into a single view.
Accelerate the use of data. Advertising needs to be much more data-driven. Many of our channels will generate data, and we need to figure out how to collect this data and bring it together to provide a rich view of the consumer.
The last and most important point is that advertising is not marketing. And at the end of the day, marketing represents the much broader set of ways in which companies can build brands and relationships with their customers to drive sales. With the growth of e-commerce, marketing is increasingly merging with sales, and that trend will only become more common going forward.
For advertising to thrive in the future, it needs to be integrated into a much bigger picture that starts with a company’s objectives and finishes with sales.
Mark Read is the chief executive of Wunderman