Reports of the death of advertising are exaggerated

Over at Buzzmachine.com Jeff Jarvis has been speculating on the decline of advertising in a one-to-one world linking consumers with marketers. Google presumably makes this possible. Social networking presumably makes this possible. They are the high-tech conduits of word-of-mouth, which has always had the underlying responsibility for building brands. Give consumers the power on their own through these and other tools to talk about brand experiences and marketers can cut out the middleman: advertising.

Rumors of the death of advertising are driven as well by the fact that advertising grew so pervasive and intrusive off-line that skipping commercials became a business, starting with the remote control, then the VCR, then TiVo, Napster,  the iPod, etc. James Fallows gave time in his Atlantic Monthly blog last month to the idea that newspapers aren’t dying; instead, advertising is dying and dragging newspapers and other media down with it.

Here’s my take: nothing is dying. Newspapers aren’t dying, TV isn’t dying and advertising isn’t dying. To be sure, there may be a few deaths in the family, but the distinguished line of TV, print and advertising  inheritors can look forward to a continued life of citizenship.

As an industry we have discussed that changes may have to be made by some of those inheritors in order to carry on their legacy. For the most part this means specialization, or enhanced relevancy. Newspapers don’t have to disappear, but they may have to stop trying to be all things to all people. Ditto most every media business. But, fortunately, most media types have shown themselves willing and capable of successful adaptation over the years, enough to ward off extinction.

Now it is important, however, to come to terms with the significant role that advertising has played in the survival skills of media through the years. Today, most media are utterly dependent on it, new and old. That dependency is making it hard for advertising to change in the ways it needs to in order to catch-up with others in a consumer-driven world. As the thing so totally and utterly responsible for powering the New Media Age advertising has been feeling recently that the world needs it more than it needs the world. Some have even said so.

Well, Jeff Jarvis and others are speculating this may not be true. I don’t agree; but their conjecture is not uninformed. The world dislikes advertising - the Internet world, I think, most especially – and the reason why is simple: advertising insists it has the right to be rewarded, which is fundamentally out of step with what every sensible marketer knows is true about the world in which it does business today – rewards are given at the discretion of consumers. The rather astonishing trail over the years of advertising innovations designed to reward advertisers online such as adware, pops-ups (then pop-unders), flashing banners, interstitial, home page take-overs, and even pre-roll have done nothing except leave room for the doomsayers to howl at the moon.

Can it be advertising by this or any other name if it is not so insistent and demanding? Can advertising let go and give itself over to the care and judgement of the users groups and web pages and the mobile telephones of consumer generations today and tomorrow? Can it be successful at cultivating consumer trial and loyalty? Yes, it can, if it agrees to second place behind the consumer.

Consumers have rewarded advertisers many times over the years that agree to see it their way. Research has regularly documented that subscribers especially value the shopping circulars in their Sunday newspapers, which despite the onslaught of new media still splash out of the paper onto the kitchen counter every weekend. What is a fashion magazine to readers without the fashion advertising? There is as much anticipation today over Super Bowl commercials as there is the game, a reward to advertisers for their bold creative efforts. The brilliant Herb Schmertz forever changed corporate image advertising and showed how to constructively engage audiences by underwriting Masterpiece Theatre on PBS in the 1980s for Mobil Oil.

Put the consumer first and great things can happen for business, including the business of advertising. Unfortunately, not enough of that takes place online where, instead, it was suppose to be pay-back time for advertisers: one-to-one advertising, nothing lost or wasted. A little “me time” for beleaguered ad executives desperate to show that, “Yes, we can.”

Bad idea. Wrong for the times. Especially wrong for the medium and its value proposition to users. Of all places, the Internet, a consumer-driven, owned and operated, ours not yours, media tapestry with genetic hyper-sensitivity to third-party encroachment and control was the wrong place for advertising to insist on the spot at the front of the line. After much banging around, we are now in serious trouble of regulation that is thoroughly disconnected from practical reality and – worse - out of proportion to the more significant encroachments that exist offline. And, unfortunately, the facts really don’t enter into it. As of now, it’s perception not reality. How ironic.

As a consumer I have no satisfactory response for advertisers that have been denied for so long the answer to Mr Wanamaker’s question. When I’m not busy selling the virtues of vertical niche content online, I am a media consumer and as a consumer I have no reliable guidance for advertisers that wish to engage me.

“When would be a good time to talk?” I don’t know. I suppose when I’m in the mood. I suppose when I’m thinking about whatever it is that I’m thinking (note veiled, commerical reference to vertical niche content above).  I suppose if you have something clever to say. But I need my space. Please don’t hover. If I have questions, I’ll ask. That’s my attitude and, I suspect, the attitude of many consumers.

I don’t know how Mr. Schmertz measured the effectiveness of his corporate underwriting experience back in the 80s. It was a sensation and gave him a certain celebrity along with his pioneering use of op-ed advertising positions. He wrote a book. I suppose he did some research to measure favorability of Mobil among the opinion-leader demo that was his target. Still, today, however, I expect to see Mobil (now Exxon Mobil) as the underwriter of Masterpiece Theatre and I will forever associate the company with citizenship, whether I agree with them or not. And while it may or may not be connected, I really have always favored their brand when buying gasoline, which leads me to report, sadly, that Exxon Mobil is pulling out of Eastern Massachusetts. The stations will be replaced with Gulf. Ifeel like I’ve lost a life-long community connection that I had learned to trust – a connection that had its roots in advertising and gave me something interesting along the way.

Advertising is about consumers and no one talks about the death of consumers as a marketplace constituency. Make advertising the servant of consumers, in the way advertisers do their products, and its future is assured.

What Would J. Walter Thompson Do?

I agree with just about everything Jeff Jarvis has to say – and has always had to say – about new media, most notably the power of niches. Small is the new big as long as the power is there to network, which the Internet, of course, provides. However, in several reviews about his new book (which I have not read), “What Would Google Do?”, reference gets made to Jeff’s view that ad agencies are doomed. More accurately, his view that their days as curators of brand messages are doomed. This is because in a networked world consumers can emerge on their own as the true brand owners with the power to shape and articulate brand image and value. Agencies as middlemen become irrelevant. Jeff’s well-documented “Dell Hell”experience on his blog, Buzzmachine, is a classic example of how one person’s experience can connect with the experiences of many other people to change brand behavior in a way that, eventually, rewards the brand. Agencies never enter into it.

That can change if marketers will re-invent how they compensate ad agencies by returning to a media commission standard. After all, that’s what Google does. Google gets paid on commission. It is the same with a lot of networks online that have made plenty sharing media revenues.

The economics of media commission works well in the new, networked economy that Jeff so rightly points out has taken over. The fee structure imposed on agencies over the last 20 years, does not. It’s killing them and it is holding back the ability of brands to adapt to the new media reality, which is open and distributed. Agencies still have possession of the budgets, but they have neither the financial means or incentive to distribute the money efficiently online. Consequently, so-called “brand dollars” get spent within easy reach, on a handful of web sites, while the rest of the money gets carried away by networks, including Google, where its future can be uncertain.

Agencies are starting to catch on. They aren’t choosing to try and re-negotiate how they get paid by marketers, yet, but they are thinking about how to get into the network business themselves and become commissioned media buyers again. They are in possession of the marketing strategy, the marketing data, and the marketing budgets. They just need to be able to share in the media spending in the same way other networks do online in order to take advantage of the available distribution.

If they succeed the outcome will be good for brands, long-term. Brands need advocates. Consumers make the best advocates, but agencies come second. In a competitive world, you need both. In the short-term, however, we need to be concerned about the transparency of agency goals and intentions and the conflicts of interest that may result from directing client business in the interest of profitability instead of client objectives. That may sound harsh and accusing, but it’s not. Agencies need relief, especially online where the future of brand marketers is playing out in places like Jeff Jarvis’s Buzzmachine.

In all of this it may be worth mentioning that J. Walter Thompson started out life as a magazine rep. He got into the business of helping customers and prospects create advertising as a way to facilitate selling more pages.  The rest is history, until now. Suffice to say that Thompson may have been responsible for the media commission model that sustained agencies like his until recent times. Were he here today, he might then be the one telling agencies they’ve got to get back into the media business.