Traditional Advertising is Dying. And thank God for that.
Traditional advertising has been declining—some say, even dying—since the year 2000. A very painful and real result of this is what’s now called the “Print Apocalypse” in the U.S. newspaper industry.
A report by The Atlantic (tellingly, posted on its digital news site) said that from 2000-2015, newspapers lost $40 billion dollars in advertising revenue. The report said this wiped out the gains in the last 50 years.
Another report, on Business Insider, had more grim statistics. In 2009: 105 newspapers closed down; this meant 10,000 newspaper employees losing their jobs. In Q1 of 2009, print ad revenues fell 30%. Furthermore, among the top 25 newspapers in the U.S., 23 reduced circulations by 7 to 20 percent.
Small screen revolution
So where did that $40 billion advertising money go? The Atlantic puts it this way:
“Two tiny plates of glass. Two earnings reports this week offered a microcosmic glimpse of the shift.”
On Wednesday morning, the New York Times announced that print ad revenue fell 19 percent for the quarter. Nine hours later, on Wednesday afternoon, Facebook announced that its digital advertising revenue rose 59 percent.
It’s not that hard to guess why. Simply put, the advertisers’ audience has moved on from big stationary screens at home, the office, or the gym. Consumers now spend half a day or more looking at their smartphones and tablets.
Instead of going to websites, they simply scroll through what news, stories, videos, and memes pop their way onto their social media feeds, whether Facebook, Twitter, IG or some other platform. Consumers today simply want their information and entertainment to be as mobile as they are.
Given this change in the lifestyle and viewing habits of consumers, it’s only natural for clients and advertisers to shift marketing efforts to mobile, online, and digital platforms.
Here are some indicators that show us the possible fate of traditional advertising:
High cost, low profit
The data doesn’t lie. It simply costs more for both the client and ad agency to produce traditional advertising compared to digital advertising.
Using figures from the U.S., we see that a full-on digital marketing campaign would cost from $74,868 to $239,948 a year.
Compare that to the cost of a full traditional marketing campaign: $163,140 and $101,599,280 per year.
The difference, obviously, is simply staggering.
Global players in advertising are feeling the plunge. In 2017, the Wall Street Journal reported that London-based WPP PLC, (owner of global ad agencies including agencies such as J. Walter Thompson, Young & Rubicam, and Ogilvy & Mather) had a shocking 11% plunge in its shares’ worth.
Other industry giants like Publicis and Omincom are facing a similar downturn.
Meanwhile, a blog post at the USC Marshall School of Business reported that “traditional media (TV, radio, print, out of home) spend fell by $105 billion (from $405 billion to $300 billion), while digital media (display, search, video, social) grew by $117 billion from $88 billion to $205 billion” in the period covering 2012 – 2017.
IT firms, other companies as competition
Right now, only two global entities dominate and practically control social media and internet advertising: Facebook and Google.
It used to be that ad agencies would create campaigns for clients and then book ads for these two digital behemoths. Not anymore.
Unsurprisingly, Google and Facebook have decided to “cut out the middleman”. Instead of waiting for agencies to book ads, Facebook and Google now directly deal with clients when it comes to advertising deals.
Other online companies like Amazon and Booking.com are also creating in-house teams for their marketing campaigns, from creatives to digital media buyers
With these developments, the future of the traditional advertising business model is even more uncertain.
Changing market tastes and preferences
Millennials today have the most buying power and guess what? Research shows that they are not attracted to, and remain unaffected by, traditional marketing and advertising.
A Forbes report pointed out what works with Millennials:
“Millennials communicate with each other far more than any advertising campaign can. When trying to figure out whether something is worth buying, millennials will go to their friends and social networks to see what people think. They use this collective filter to sort out research and other word-of-mouth style information when making decisions.”
“…millennials don’t want to be talked at. They are used to having control over the information at their fingertips in their day to day lives, and their interactions with brands online is no different. They want to control their messaging. They also are easily incentivized. They expect to be rewarded for their loyalty, for their follows or likes. They want coupons. They want to be among the first to receive updates. They want to be included in a brand’s communications efforts.”
In other words, Millennials want information packaged as essential parts of the narrative of their lives. They want content. They want interesting, funny, maybe even shocking and unusual stories.
They want stories, videos, memes, images, that are worth sharing on their social networks. Frankly, traditional advertising content bores them.
The challenge now is, how do marketers and advertisers change their approach, considering all of these?
Changing values and attitudes
Another often overlooked factor in why traditional marketing and advertising are on the decline: ever since the global recession from years 2000 thru 2009, consumers have fundamentally changed their attitude towards the purchase of material objects and possessions.
As a business story in Time.com said, “In the months following the financial crisis, just about everyone got religion. They rediscovered core values and began to place relationships and experiences above material things.”
This does not only mean that people are avoiding excessive spending. It also means that people no longer buy for the sake of having possessions, or for their function, or simply to project a certain status. Those values have been set aside for the most part.
Instead, people are spending more for positive, meaningful experiences that they can share on their social networks. They are spending on products and services that promote their health, well-being, and help improve the quality and sustainability of relationships that matter most.
This is why a lot of consumers are drawn towards digital and online content that are related to worthy causes, advocacy, social justice, insights and advice on love, social harmony, and more abstract pleasures and sources of fulfillment and meaning.
All these mean that marketing and advertising must change its approach in how to communicate their message.
Or even more profoundly, change the message itself: getting away from simply selling a product or service and moving on instead to adopting and adapting to consumers’ values and priorities in life. And them somehow, show consumers that the products and services “fit” into these values and priorities.
Furthermore, advertising agencies and creatives must start thinking not simply as creatives and communicators, but should also adapt a mindset similar to that of IT companies.
So yes, traditional advertising might be dying. But it will be replaced by something else, something more appropriate for consumers today.
That’s simply how life is: you “die” to the old ways, and then evolve so you can be reborn into something that is more relevant, and more needed. That’s the only way to survive and move forward to a more complex, confusing, fast-changing, and challenging future. Thankfully, the rewards are likely worth all the effort and painful change.