Thoughts on the Future of Advertising
Marketing has always relied heavily on advertising, but with the advent of the digital era, it has changed in ways that nobody could have predicted. In today’s platform-driven economy, omnichannel marketing and digital infrastructure are no longer optional. To be relevant in today’s economic climate, advertisers must embrace these shifts.
To the top, the bottom and in between
With these shifts in mind, it’s easy for brands to focus on growth strategies that pivot on inherently bottom of the funnel strategies because that is where ROI is easier to prove and therefore justify the investment. While brand advertising may not have a direct impact on underlying sales, we know from experts like Byron Sharp, it plays a critical role in creating awareness and generating interest in a product or service.
Although print and broadcast media have seen sustained declines, their continued viability has been ensured by their growing digitalisation. Advertisers now have access to a more dynamic and engaging approach to communicate with consumers via scalable investment models made possible by the advent of programmatic outdoor and TV as conventional media‘s role shifts.
Programmatic outdoor is a new way of buying outdoor advertising that is changing the game for marketers. Using technology and data, programmatic outdoor allows advertisers to target specific audiences in real-time and adjust their messages accordingly. For example, a billboard may display one advertisement during rush hour traffic and another advertisement during off-peak hours based on the target audience. This level of targeting and customisation has made programmatic outdoor advertising an attractive option for brands looking to maximise their advertising efforts.
In a similar vein, programmatic TV buying, BVOD (Broadcast Video on Demand) has had meteoric growth over the last few years as more and more people switch off from watching traditional Linear broadcast tv in favour of on-demand streaming options. The media platforms in this space enable marketers to zero in on certain demographics and geographic regions. Advertisers may target their messages more precisely by monitoring viewers’ watching behaviours and tailoring their messages to them based on their interests, demographics, and other factors. This not only improves the efficiency of commercials, but also gives viewers a better tailored experience.
As they have been gradually digitised, conventional media have kept up with the evolving advertising scene. While these platforms were formerly considered antiquated, they have now evolved into powerful resources for marketers seeking to expand their reach and stimulate customer interest in novel ways.
The effectiveness of any advertising campaign depends on omnichannel marketing, which entails integrating many digital channels to promote a company’s whole range of offerings to consumers. An integrated customer experience requires businesses to demonstrate their ability to coordinate several features and functions. In a platform-driven world, the challenge for agencies and major ad firms is to keep their audience and content under their control.
The future is coming here
The rise of AI in the last few months is showing that it could be one of the most revolutionary technical developments to effect not just the advertising industry but almost all levels of creative development, media, marketing and research.
While AI will no doubt have a profound impact on the advertising sector, it is not a silver bullet that will fix all issues or cause it’s absolute demise as some are reporting. There will still be a high barrier to entry for businesses wanting to deploy artificial intelligence for their own private datasets because of the high cost of acquiring the necessary hardware and software and the associated human knowledge.
However, the growth of AI-as-a-service (AIAAS) (predicted to reach USD 43.29 billion, growing at a compound annual growth rate of 25.8% by 2030) in only just a few short months has been remarkable and will likely see improvements in the efficiencies of businesses that adapt or integrate the new technology into their existing workflows. From our testing at REBORN, we’ve found that by using our existing ideation and creative processes and augmenting it with AI, we can expand our level of output in new directions. It has enabled us to iterate quicker and have richer ideas to then refine into the specific output. I do not believe that we will be replaced by machines, but I do believe the combination of humans and machines will be unbeatable.
Rate Cards vs Deliverables
Another challenge facing the advertising industry is the shift to platform-driven models. The transition to deliverable or platform-driven models is another issue confronting the advertising sector. Agencies will inevitably see decreases in managerial, organisational, and startup expenses. Advertisement campaigns are no longer restricted to a single medium, and agencies must devise strategies to ensure they continue to have access to their target demographic and editorial oversight across all channels.
Not many agencies can be aim to be the LeBron James of their field, inherently more and more agencies will aim to find a ‘uniqueness’ that can come from offering more and more combined services that give them a broader footprint to offer their clients.
David Easton
Fees are another hot topic in advertising, with pressure from clients to bring them down. Obviously, Different businesses within the advertising industry have different ways of operating. Digital-led businesses leverage economies of scale driven by systems and platforms rather than people, while creative businesses like Ogilvy and Grey rely more heavily on highly-qualified, highly-skilled people. WPP and other similar organisations must maintain a level of premium above other organisations due to the investment required to cover their costs and support their employees.
There are two arguments to how fees work in the advertising industry. The traditional model, which pays for people and relies on rate cards, makes sense where people drive the activity. However, in a platform-driven model, where efficiency is key, outputs should be paid for on a per-advert, per-campaign, or per-result basis rather than through an outdated rate card model.
The transition to this output-driven world is difficult because many people who sell campaigns and contracts still have a rate-card-driven mindset. However, it is essential for the industry to embrace this shift to stay relevant and competitive.
One way or another I believe the future of advertising is digital, and omnichannel marketing is critical to its success. The shift to platform-driven models and output-driven payment models is a challenge for the industry, but it is necessary to stay competitive. Ultimately, the success of an advertising campaign will depend on the ability to create an integrated experience across all platforms and leverage the power of technology to achieve business objectives.
Published: 17/02/2023
by David Easton