Is Advertising Really Dead?

When I joined advertising in 1977, advertising was considered an art form. And like most art there was an air of gay abandon about it that went well with its brand of creativity. The word ‘advertising’ conjured up images of advertising folk having long lunches with pink gins and bloody marys while they partied at nights with models and other celebrities.  Nothing could be further from the whole truth.  Ad agencies worked the ‘996’ schedule long before Jack Ma made it a mantra, or code coolies started complaining about overwork.  Often client service and creative people sacrificed their personal and family time to work on their client’s brands to bring their clients fame. But yes, it had a lot more freedom than working in a bank or some other industry. As Jerry Della Femina described the advertising profession very aptly in his book ‘From those Wonderful Folks Who Gave You Pearl Harbour’ published in 1970, - “I honestly think advertising is the best fun with your clothes on”. I can vouch for that.  It was indeed the best fun you could have with your clothes on.  A visit today to an advertising agency might make you wonder if that is true. People in advertising look as bored and tired as the people who work in the Orwellian world of the data factories run by the infotech industry in India. Millions of expressionless faces staring at their computers. Moving seamlessly into their canteens at lunch time for an expressionless lunch. Bye bye pink gins!

The Traditional Advertising Business Model 

How did we earn?  That wonderful God given commission of 15% on a client’s media spends is what kept the advertising business running like a well-oiled machine.  No one questioned it, because there are some things that you never question.  Somehow the reason why it seemed unshakeable was because the 15% came from the media rather than from the clients. That made us feel that the clients were actually getting the advertising for free. It’s not that the ad industry made excessive profits. In fact, they made just enough to keep their heart and soul together.  Which actually made the industry vulnerable and open to acquisition in the late 80s. This was the time which gave birth to the first acquisition sharks like Sir Martin Sorrel.  A 1968 Harvard Business School alumni who had worked with the famed Saatchi and Saatchi and was their Chief Financial Officer until 1985, he was often referred to as the ‘third brother’ and helped the Saatchis with many acquisitions.  When he left Saatchi, he set up a little shell company called Wire and Plastic Products, initially set up to manufacture wire shopping baskets. Who would have thought that it would finally evolve into a shopping basket for advertising and media agencies? In 1987, WPP which swooped down on poor old J Walter Thompson who was ripe for an attack. Poor old ‘Commodore’ Thompson might have flipped in his grave. Ogilvy was acquired two years later. David Ogilvy is known to have called Sorrell an ‘odious little shit’ later softened to ‘odious little jerk’ by the media.

I call this the first Big Bang in the advertising industry. The culture of ad agencies was to start to change forever. They would become so bottom line oriented that all other lines in the agencies including strategy planning and creativity would start to become affected. You can imagine the shock - a math man running a bunch of mad men.  I was at JWT at that time and the first effect I saw was suddenly the exit of the best minds in JWT.  The strategic planning function was almost obliterated.  But the greats like Stephen King (often called the father of planning) and Jeremy Bullmore  (Chairman of JWT London) were installed as board members of WPP.  That move gave sacking the rest of the people a strange air of uneasy respectability. The industry had suddenly moved from pink gins to pink slips. 

The second Big Bang was the painful extraction of the media business from the main agency to create stand-up independent media agencies. In 1998, I was in JWT Shanghai at the time, and we were the second JWT office in the world to create an independent media agency and tear it away brutally from the creative agency. The 15% media commission which was beginning to break down any way suddenly became the norm rather than the exception.  The net effect of this Big Bang was that the media plus creative function was being paid much less than ever before. This resulted in less training, lower salaries, less interest from business school graduates to join advertising, less travel, and less talented people finally willing to join advertising.  In a way it was the beginning of the slow downfall of advertising.

Famous ads written by Sir David Ogilvy

Enter the New Millennium

The new millennium brought with it some profound changes.  The internet was beginning to change the way people live, read, do business, buy, and connect with other people.  In 2004, Mark Zuckerberg launched Facebook.  We learnt a new term called ‘social media’ with its advent. LinkedIn was launched earlier in 2003 and Twitter later in 2006. A host of other social media would completely change the way we live.  So would advertising unfortunately. Because people were spending much less time watching television and reading the newspapers and listening to radio.  In 2019 people spent more time with digital media than with traditional media in the US.

Time spent with digital media vs traditional media in the US in minutes

Source: statistica.com

In parallel, it looks like much more money will be spent on digital media compared to traditional in the US especially in the future.  While India is well behind the curve, there is no doubt that we will follow the global pattern at some point of time in the future, it is difficult to say exactly when.

So, what changed? Essentially the medium changed. ‘The medium is the message’ a phrase coined by Marshall McLuhan became truer than ever.   So now ads now had to be made for Facebook, LinkedIn and other social media because people were spending more time there, rather than with their television sets or their daily newspapers. Or ads had to be served to people browsing the internet, and just a click could take them to more detailed information about a product which could induce those consumers to finally buy the product online.   The wonderful thing about the internet was that everything could be measured.  People’s behavior could be tracked real time.  For the first time we could build profiles of people and their preferences.  This is exactly what happens when you are on Amazon which through your past browsing and purchases is able to predict with a fair degree of accuracy what you might want next. It knows your favourite authors, your favourite music, which detergent you buy, and what clothes you like to wear.  

Unfortunately, traditional advertising was comparatively always a shot in the dark which prompted Lord Leverhulme ( 1851-1925) the founder of Unilever to say “Half the money I spend on advertising is wasted, the trouble is I don’t know which half’. The world of digital and social media meant new ways of talking to consumers.  This gave rise to new techniques in communicating. It meant that the skill needed to produce the famous Volkswagen Beetle ad by Bill Bernbach that made it a cultural icon that sold millions of cars were no longer needed. One can’t forget of course the degree of difficulty posed to sell an ugly German small car soon after World War II, to Americans used to the luxury of large cars, something the Volkswagen ads achieved admirably.

1959

2019

In fact, the brilliance of the written word employed by master craftsmen like Bill Bernbach and David Ogilvy or the keen visual eye of Helmut Krone was perhaps no longer needed.  In the new millennium creativity had played hide and seek behind a much-abused word called ‘content’. Content was very forgiving of real creativity and happy to make friends with mediocrity.  In contrast to the Think Small ad, the Facebook ad of today for Volkswagen will be judged by the number of likes, comments and shares.  And not purely by how much the ad moves you like the Thing Big ad.  In fact, there seems to be no particular skill this Facebook ad might need either in terms of word or visual craftmanship.  Suddenly communication had become the domain of data scientists and engineers whose province was machines, algorithms, big data and artificial intelligence. And perhaps creativity was reluctantly but surely taking a back seat.

All these changes inevitably gave rise to a new avatar called the digital advertising agency. Filled with young people who themselves were voracious consumers of the internet and social media, they formed the core of the digital advertising agency.

Seeing an opportunity, the consulting companies made a foray into this new area called digital marketing and advertising. In fact, some even predict the eventual takeover of digital advertising by the consulting industry. If that happens it will be the final nail in the coffin. Accenture, Deloitte, IBM, KPMG and McKinsey are spending billions of dollars swooping down on the best marcom agencies already. 

From Mad Men to Math Men

Image courtesy : Mad Men by Lionsgate Television

It does seem like more and money will be spent on digital advertising rather than traditional media in the future. A rather ominous sign for traditional advertising. The sad thing is that traditional advertising never did adapt to the changing media, and the kind of communication that consumers of today and the future were going to consume.  Like the proverbial frogs, they sat in the comfortable safety of their own little wells, hoping something miraculous would happen that would make clients keep spending their money on television spots and print ads. That miracle unfortunately won’t happen.  I think advertising won’t die right away, but it will keep fading.  But certainly, the new age is more dependent on technology to measure engagement and micro-targeting consumers based on preferences. 

“75% of our business is stuff that Don Draper would be uncomfortable with”.

Sir Martin Sorrell, 2015

Which may have prompted Sir Martin Sorrell, to say that Don Draper wouldn’t recognize Adland today, pitting Don’s Mad Men against today’s Math Men. 

I can’t help feeling that Don wouldn’t think he is missing anything!  

To answer the question I started with, is advertising really dead?  Advertising might not yet be dead, but advertising as we knew it is certainly dying. It might well be time to start writing a worthy epitaph.

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Prabhakar Mundkur is an ad veteran now retired, who observes the ad industry from a distance