The End of Advertising?

I work in big media. And everyone here is scared shitless. Ad dollars are being redistributed across multiple platforms all over the internet and the ad revenues of the old guard big media, the network television and major metropolitan newspapers that used to claim the vast majority of these dollars, are in a free fall.

television

The current thinking in big media is that ad dollars are 1) down because of the recession, and 2) migrating to the internet. Both of which are true. But big media also seems to think that things will get back to normal when 1) the economy bounces back and 2) internet advertising is effectively monetized to make up for the losses in on-air and print.

What big media seems to be missing is an understanding that the culture and our modes of consumption have fundamentally changed as a result of the internet, and things aren’t just going to go “back to normal”. The current structure of media and advertising is set up to promote MASS UNDIFFERENTIATED CONSUMPTION, based on an expectation (created and made true by advertising), that people will buy whatever you tell them to if you make them want it enough… whether they need it or not. And that philosophy helped shape just about everything in American culture for the past fifty years.

Driving consumer desire superseded design, quality, and innovation in American industry. Money spent on marketing and advertising rose and rose while money spent on research and development remained steady or fell. And it happened because the mass media and the cultural attitudes and consumption behavior it fostered made advertising the most important part of the product. It made sense at the time because it was working; companies were just putting their dollars where they were best spent.

Mass communication shaped our culture so much that access to it could be sold at a premium. Television stations and newspapers with big readerships could set their own price for ads and still turn away suitors because they controlled access to a great big desire machine that worked and converted ad dollars effectively into sales. Since they would be seen by so many people, companies wanted the best ads money could buy so million dollar accounts with prestigious ad agencies were born. We aggregated ourselves into mass audiences with similar tastes and needs and desires and allowed big companies to market to “us” as a very large group. And all of it worked as long as the great big desire machine kept churning away turning audiences into sales.

Nobody ever thought, “what if the machine stops working?”

I suspect that we are seeing the beginning of this now. Mass undifferentiated consumption was really only a phase, the adolescence of a relatively young consumer society. Now we are witnessing the emergence of the mature global consumer, a consumer that knows what it wants and is more aggressive about seeking it out, and a customer that the current infrastructure of big media and advertising is not prepared to serve.

I’m not suggesting that consumption will stop, nor that people will stop conspicuous consumption and only buy the things they need to survive from now on. No, consumerism will survive, but the way me make our purchasing decisions has changed, and big media hasn’t kept up. The segment of society whose purchasing decisions can be easily influenced by the old advertising model is shrinking and will continue to shrink. Luxury consumption has long been governed more by word of mouth and branding rather than old-fashioned spot ads. Now middle class consumption is following the same trend.

And as the internet makes information cheap and infinitely accessible, consumer-to-consumer information sharing is threatening to make advertising irrelevant. People know that Toyota makes good cars at a reasonable price; one of your friends probably has one. People know Samsung makes good TV’s, I watched my roommate’s for hours before I bought mine. The word of mouth from satisfied customers created good reputations that spread in both cases and now exist as part of the unadvertised brand of each product. Consumer reviews for any type of product are easily found online. Yelp or Citysearch can tell you where to find a reliable mechanic or get a good haircut or buy a good cheeseburger in your neighborhood. Quality and service are what should matter when making decisions about what and where to spend your money, and increasingly consumers are learning how to bypass the illusions of advertising and get that information for themselves.

Effective mass media advertising demands a culture of mass undifferentiated consumption and relatively unchallenged assumptions, a culture Madison Avenue successfully created in consumers over the past sixty years. As the passive unquestioning consumer of the television age gives way to the active and aggressive consumer of the internet age, advertising will be faced with the challenge of reinventing itself to deliver sales to clients in a whole new ballgame. Most likely this will mean not the end of advertising, but the creative destruction of the old model and the evolution of a new system.

A new system that Old Media will scramble mightily to not be left out of.

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4 Comments

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4 responses to “The End of Advertising?

  1. A fascinating article – thank you! It seems that almost everything in marketing is changing these days. As the new systems you refer to evolve in the Internet age, would you agree that the small businessperson operating from home can find him or herself on an almost equal footing with the big players?

    John Pearce

  2. Very interesting post. I would suggest you go to a website called Spread the Word and check out the short documentary called “Stuff” It’s about 20 minutes long and definitely worth the time.

  3. I am studying this. Do you mind if I quote you? If so I will credit this page, and you, when I publish in April.

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