Chase the Cheese, it has moved

Those Were the Days: Advertising Needs to Move On

Remember back in 1998, when I started at Ogilvy Outreach? The caste system in advertising was clear - mainline ruled the roost, the Brahmins of the industry. Everyone else, from Out of Home to Experiential and people like us "Rural", were the "others." Client pitches were all about showcasing consumer planning, mainline creativity, with "Others" getting a measly 15-20 minutes at the end or not getting an opportunity to present at all.

Digital media changed things a bit, but has it really shifted the power balance? I recently read a piece by an industry veteran who argued that "while digital is great for performance marketing, its very nature works against core brand building principles": audience engagement, storytelling, emotional connection. It even cited an HBR Article 29, April 2022 showing B2C companies planning to increase spending on traditional media for better brand building.

The truth is consumer behaviour and media consumption have transformed forever. Yet, some leaders seem stuck in a "good old days" mentality, pining for the era of column centimetres and TV ad seconds. Back then, you could create a few ads, live off those sweet media commissions, and call it a day.

What is the reality today?

Look at the slow growth of Media and Entertainment (M&E), a "secondary" industry heavily reliant on advertising revenue. This revenue, in turn, depends on how much other industries are willing to spend on advertising, which, let's face it is not much.

An E&Y report paints a telling picture. The M&E sector grew by about 8% in 2023, but traditional media (TV, print, radio) lagged behind pre-pandemic levels. Television, the entertainment giant, was hit especially hard, with ad revenue dropping 6.5%. Meanwhile, digital media advertising thrived, growing 15% and expected to overtake TV by the end of 2024. This is creating a new pecking order, with Google and Meta leading the pack, surpassing the combined ad revenue of traditional media giants.

Advertising Agencies Need to Change?

So, should advertising cling to the past or follow the cheese? The lazy days of thinking in terms of TV ad slots & print column centimetres are over. We need to follow the consumer, craft messages that resonate with the media they use and how they consume it.

Remember the challenge of limited media options in rural marketing? We had to get creative, build media opportunities ourselves, and craft messages that worked within that context. Today, the challenge is agility in crafting media for a hyper-segmented audience.

Are we fully leveraging Digital Media for building brands

While I might debate the merits of traditional media for brand building with some industry veterans, I certainly agree that digital media's potential for brand building hasn't been fully tapped.

Our current over-reliance on performance marketing means neglecting other opportunities. A Nielsen 2022 ROI report found that over half of global display, social, and digital video campaigns are underspending. Reach and targeting are crucial for brand marketing, and studies show ads reaching the right audience have significantly better ROI.

Research on podcast ads, branded content, and influencer marketing indicates an average aided brand recall of over 70% across all three channels. These channels can build brand familiarity and affinity.

The problem with digital media? We tend to trust the data it provides a little too much. Research shows only 63% of mobile and desktop ads even hit the target age and gender in the US. That's why constant campaign monitoring and adjustments are crucial and may be a overspending as well keeping in mind the inefficiency.

From the current focus of digital medium on performance and sales (performance marketing), we need to move towards creating a media mix which though digital is designed to fulfil both requirements of the business. Research indicates that,the Display & Social deliver above average effectiveness for both..

So, what does this mean for ad agencies?

Stop waiting for the "good old days" of traditional media to return. The customer has moved on, their content consumption habits have changed. This is the era of hyper-personalization and hyper-segmentation. The days of common media consumption - watching TV in drawing room, listening to radio together and entire family reading the same newspaper are over. So, days of creating same ad for everyone is over.

Restructure the agency teams

Agencies need to revamp their teams to create content (ad) reaching this hyper-segmented audience. The same brand might need different messaging for parents versus teenagers across different channels

One-size-fits-all content is dead. Develop high-quality content (read: ads) tailored to specific audience segments and you need to do it on a shorter timelines, the days of elaborate scripting, story boarding and pre production plannings are over.

Invest in Media Understanding

Invest in understanding the ever-changing media landscape. Don't just rely on dashboards and stop relying on arm chair consumer insights of an overworked planner completely! Be aware of the data gaps (like only 63% of the ads reaching the target audience in digital). Explain to clients that underspending is a bigger threat than overspending. Think about it - 50% of media investments might be leaving significant ROI on the table because of underspending.

Embrace New Media Opportunities

Traditional media agencies are vacating spaces for niche players like "Influencer Marketing" etc. If you want to survive, don't vacate any space, become truely 360 degree. Embrace new media channels - they work! Podcast ads, influencer marketing, and branded content can drive over 70% aided brand recall. Does your agency have the chops to build ads and content for these channels?

This article is a call to action for ad agencies: Stop hoping for the past, invest in understanding the present media landscape, and develop the skills