I was blown away by an article the other week, “When Advertising no longer works, It’s time to reinvent“, The author of that statement was S Yesudas, Founder of a new agency called Trigger Bridge, a 20 year ad veteran, with experience in top media agencies like Vizeum and its parent, Aegis Media.
This struck a chord with me,
I have been part of the “advertising” industry for over two decades. Have sat in seminars and conferences pointing towards the need for redefining the practice. The only change I witnessed is the influx of super specialised verticals set up by most agencies, resulting in incremental noise by marketers to “sell” their products/service to consumers and agencies “upselling”/”cross-selling” those specialisations to clients…
New age companies are replacing fundamentally strong long-running companies, largely based on two factors, A) Their investors’ willingness to wait for long-term returns B) Brand love by consumers.
While the shareholder mindset on returns from the already profitable companies cannot be changed overnight, brand love and a possible impact of the same on the balance sheets can surely be a reality.
Companies fundamentally know this. They understand that protocols and processes that have worked for decades may need some serious adjustment.
Then there are others who blindly feel they are emerging into an increasingly agile environment, willing to try the “new digital” frameworks. However, when all is said and done the “new” just sits on an archaic platform that has been deemed as the tried and true. The “new” succumbs to the complacency and the tradition of the company and eventually fails to meet its true potential.
Call it what you like. That is not evolution. It’s this:
Agency Performance Models are Broken
Campaigns. Clicks. Views. Performance. Agencies are only as good as their last campaign. Their goals have always been short-term performance-based. It’s never really been about the customers as much as it’s been about the numbers. Scalability on views and awareness has been the name of the game. Accountability from a revenue standpoint is another layer that puts further pressure on agency performance.
The main issue is that the focus on performance negates the need to really understand customers. I’ve witnessed agencies today continuing to reference PMB (Print Measurement Bureau) as part of their targeting research. The data they find continues to be based on demographics and psychographics to find customers (who may be unwilling to buy). Nobody understands the customer anymore — inside and OUTSIDE of the company relationship. What matters to them? What do they need? Who influences them? What are their interests?
… NOT how can I influence them to buy my product?
S Yesudas put this nicely,
How can there ever be “love” if transaction is the only motive in an interaction?
The Incessant Media Noise Demands a Need for Relevance
Advertising dollars are being wasted today. We know that media fragmentation is now a reality. Consumers are bombarded with messages, ads, communications (email, text, chats, social networks). Consumers, have created our own filters for sorting through this daily clutter.
In reality, we can’t possibly consume everything that is thrown at us. Consider this:
This number has been debated, and the latest article suggests we consume about 5,000 messages per day. This assumes the following:
- 8 hours of sleep each day, that leaves 57,600 awake seconds per day.
- To see 5,000 ads/branding messages per day, we would have to see one every 11.52 seconds.
Chalk it up to science to determine what our brains really absorb in a given day.
“Even if those ads/brands are within eyesight, the reality is our brains see very few of them. Our senses are bombarded with over 11 million bits of data every SECOND. The average person’s working memory can handle 40-50 bits, max. That means we ignore 10,999,950 bits of data every second we are awake.”
This author asserts that 300-700 marketing messages per day is a more reasonable estimate. This fragmentation makes it increasingly difficult to battle for the customer’s attention.
Susan Silver, my colleague, referenced the success of Buzz-feed.
BuzzFeed has flipped the model of engagement on its head, and discovered the key to connecting with audiences that many brands haven’t figured out:
Great content isn’t about the content itself, but the emotion it can evoke from its audience.
By analyzing the interactions readers have with their content, Buzzfeed realized what people really care about. They tapped into many cultural trends and were able to connect with “users on a deep level”. Jonah Peretti, founder of Buzzfeed acknowledged this:
We think of media as something people use to help them in their lives.
Advertising simply isn’t working… as well anymore
We’ve seen the rise of Ad-blocking and its current impact on consumers, especially on mobile. I referenced the declining average click-through performance of .06%.
What is also clear is that increasing consumer control for what messages they see and what they’ll eventually respond to are making marketers question the value of their ad dollars:
This recent article: Advertising’s Promised Land has become a Digital Desert states the impending doom of digital media – however prematurely – as it references the softening in ad revenue for the giant Daily Mail:
We were told to expect £80m in digital revenues. In fact only £73m transpired. Hopes of £100m next year duly expire. Some 41% growth last year has slowed to 18% – and, though that sounds good by most standards, it is also signals a grinding halt to vaulting expectation…
“We think we’re beginning to skate on thin ice in terms of the relationships we have with advertisers and audiences,” Tim Gentry, the Guardian’s global revenue director, told an industry meeting recently. “Five to six years on, we have to look at ourselves with a bit of a harsh yardstick and say we’ve not really delivered on that promise.”
Compounding this is the move to retreat to more conservative ad spending estimates for 2016, Firms Trim Ad Spending Growth Forecasts for 2016. Media forecasters indicate much of this can be attributed to the decrease in TV advertising spend in favor of less expensive digital media. Let’s not forget that while there will be modest expenditure gains in the coming year(s), marketers have become more wise to the issues of ad fraud, ad blocking and viewability of online ads.
The move to focus on relevance and the right audience vs. scalability
Here are the things I know: Developing customer relationships go beyond clicks, campaigns or ROI. It take time. Today’s increasingly fragmented environment means we need to take the time to understand the holistic view of consumer, not whether they are ripe for purchase. Because that customer is no longer clicking we have to vie for his/her attention by appealing to things that matter to him/her.
This needs to go beyond demographics… Beyond psychographics… Beyond retargeting… Something will eventually give. As S Yesudas contends,
Transactional advertising can never build bridges of relevance.
I believe in the Pareto Principle. Things are not distributed evenly. Those customers that love you the most may only be 20% of the total targeted audience. But they may very well impact 80% of your business.
I am in an industry where these types of insights are readily available. I am vigilant in my belief that the knowledge that we have access to today will profoundly change the way we communicate to customers. It allows us all to abandon the crutches we’ve held on to – practices that will continue to limit our ability to gain and keep customers.
I would love to hear your thoughts on this. Are marketers willing to shed old practices to embrace the value of truly understanding customer?