Iceberg right ahead
By Sandeep Joseph November 9, 2018
- Using term ‘digital marketing’ betrays one’s age and outmoded views
- Despite warning signs, media companies & ad agencies have been slow to adapt
THE advertising industry has seen disruption coming for a long while. The word first gained currency in 1992, when TBWA’s chairman Jean Marie Dru published an ad titled “Disruption” globally. It refers to a radical change in a marketplace brought about by the overturning of existing conventions.
Around the time Monsieur Dru was talking about it, some people were busy inventing the internet, which was to became the biggest disruption the world (and advertising) has seen. Despite the many subsequent warning signs (loss of talent, rise of tech giants that ate publishers for lunch etc) media companies and ad agencies have been slow to adapt and change. It’s as if the industry practitioners have been watching a movie called “Titanic”, and hoping, somehow, miraculously, the ship won’t hit the iceberg. It’s been a long, at times draggy journey, but now we’re reached that point, when a flustered young man runs screaming, “Iceberg right ahead!”
Let me rehash the evidence that the iceberg is looming large:
- WPP, the world’s largest ad conglomerate, finds its shares down 20%, and has lost a lot of clients. Says newbie CEO Mark Read, “Turning around WPP requires decisive action and radical thinking.”
- Closer home, the Star Media Group and Astro Malaysia Holdings Bhd, two of the mainstays of media spending, are both trading at 50% of their share prices a year ago. Brave financial analysts are downgrading the stocks. Other publications are going 100% digital, or just shutting down.
- Website traffic to mainstream and online newspapers sites has gone up 30%-40% after May 9th. Ad pages in physical newspapers however, have not increased.
- Advertisers who have drunk deeply from the intoxicating chalice of digital are not going back to print and TV in a big way. They like the affordability and (possibly misleading) measurability of the medium, to the exclusion of everything else.
- Measured advertising expenditure for “traditional” media in Malaysia is down by more than 10% in 2018. And this is despite 2018 being a World Cup year and a General Election year.
- Clients are shifting media buying in-house when it is mission critical, and some, including banks and telcos, have long since set up agency-like structures in-house.
- Consultancies are offering to not just give advice, but also execute. They can buy agencies or if they want to be stingy, just create a Google-like atmosphere with bean bags and free lunches and hire agency people.
In this context, independent set-ups are flourishing. The rise of publishers like Rev Asia, along with new consult agencies like Lion and Lion, Entropia and Ampersand Advisory is just a sign of the freezing times. It’s all about relevance and trust, not scale or global network reach. Geography is history, and it has never been easier to buy an ad anywhere in the world, while sitting in KL.
What should clients do, in this context?
- Evaluate what you are paying for, or what you thought was “the only way”. Pricing and service models have changed, and now there are other ways galore. Financial aggregators do cost per acquisition deals for credit cards for instance, and most conventional media agencies refuse to stick their necks out for results.
- Educate yourselves and your teams. Age or seniority is no longer an excuse to not know digital: digital is the mainstream language of today and beyond. Those who can’t speak it can hide for a little while more, but shall soon be found out, or worse, find themselves redundant and job-hunting.
- Explore the potential of MarTech (marketing tech), get your hands dirty with machine learning, dive into transmedia storytelling, ride the waves of native and content.
- Experiment: consumer are extremely sophisticated, their habits are shifting everyday, and what worked in digital marketing two years ago will fail today.
In fact, perhaps the message today is not that traditional marketing is losing to digital. Marketing is synonymous with digital now. Whether it is online to offline, offline to online, mobile first or programmatic, it is so prevalent and pervasive that even to use the term “digital marketing” betrays one’s age and outmoded views.
The internet has disrupted and is moving on. The iceberg has struck. The unsinkable ship of advertising as we know it is sinking.
Welcome to the freezing cold, Jack. Keep your life vest handy, and pray.
Sandeep Joseph is co-founder and CEO of Ampersand Advisory, a consulting agency that combines media, creative and data to deliver immediate business results for clients. To debate the article: [email protected]