How To Advertise: Analysis of Contemporary Advertising (part 5)

The Global Interactive Age: Looking at the 21st Century

by

Charles Lamson

In the last 15 years expenditure by foreign advertisers increased just as rapidly as both U.S. and Canadian expenditures, thanks to improved economic conditions and a desire for expansion. Recent estimates of worldwide advertising expenditures outside the United States exceed $400 billion per year (2008). The importance of advertising in individual countries depends on the country's level of development and national attitude toward promotion. Typically, advertising expenditures are higher in countries with higher personal incomes.

Although the communist countries once condemned advertising as an evil of capitalism, eastern European countries now encourage private enterprise and realize the benefits of advertising. Even China appears to have inherited the capitalist sensibility of Hong Kong.

The explosion of new technologies in the last decade affected advertising considerably. With cable TV and satellite receivers, viewers can watch channels devoted to single types of programming, such as straight news, home, shopping, sports, or comedy. This shift transformed television from the most widespread of mass media to a more specialized "narrowcasting" medium. Now small companies and product marketers that appeal to a limited clientele can use TV to reach audiences with select interests.

A concurrent change that did not please advertisers was the growing presence of VCRs and remote controls, which allow viewers to avoid commercials altogether by channel surfing during breaks or simply zipping through them when watching a previously recorded show. Advertisers and TV executives became even more rankled with the success of PVRs (personal video recorders) like TiVo, which allow viewers to pause, fast-forward, and rewind live TV, store shows, and skip commercials altogether. To its credit, TiVo never promoted the ad-skipping features to consumers, but it was no secret. Everybody knew.

Ironically, though, within a very short time, TiVo executives were courting marketers and agencies to join its charter advertiser program, which would let viewers opt in to a marketers "advertainment" show. Best Buy bought in early, and so did Sony Pictures, Lexus, Proceter & Gamble, and Miller Brewing. One of the major features of TiVo was its ability to target potential customers and measure effectiveness against that target. As Advertising Age  pointed out, the Holy Grail to advertisers is a one-to-one relationship with consumers, and that becomes increasingly possible with permission-based, opt-in, and two-way interactions with viewers.

Computer technology has also had a huge impact. Personal computers, the Internet, and email give advertisers new media for reaching potential customers. In response to products such as TiVo, and perhaps as a result of the hard lessons learned by the recording industry, which experienced declines in music sales as a result of file-sharing technologies, the broadcast networks realized they would have to adapt to the digital age. In 2006 ABC was the first network to make available hit shows for Internet download just a few days after the programs had aired, posting episodes of popular series such as Lost and Desperate Housewives on Apple's iTunes Web site for watching streamed versions of the shows, this time for free but with embedded Web-only advertisements. The success of ABC's partnership with iTunes encouraged other networks to offer programs online. By the summer of 2006, more than 40 cable and broadcast networks were selling shows on the popular service. NBC, which used iTunes to build a loyal audience for the comedy The Office, developed Internet-only "Webisodes" of the show when broadcast filming went on summer hiatus. And AOL reached into the vault of classic TV series, such as Kung Fu, Growing Pains, and  F-Troop, and made the shows available for free, ad-supported viewing. Clearly, TVs and personal computers were melding into something new, vibrant, and exciting: technologies that made custom entertainment schedules available to viewers when and where they wanted them. TVs, computers, and network advertising would never be the same.

What we are witnessing is an interactive revolution. Advertising is evolving into a two-way medium where consumers with PCs, Internet connections, CD-ROMs, and cable TV can choose the information they access and then spend time researching the product information they desire. With interactivity, rather than zipping or zapping commercials, people actually seek them out. This is a revolutionary way for advertisers to reach consumers. Agencies now have the opportunity to prove once again that advertising creativity is not about winning awards but about helping marketers sell things.

Advertising has come a long way from the simple sign on the bootmaker's shop. Today it is a powerful device that announces the availability and location of products, describes their quality and value, imbues brands with personality, and simultaneously defines the personalities of the people who buy them while entertaining us. More than a reflection of society and its desires, advertising can start and end fads, trends, and credos---sometimes all by itself.

In turn, advertising is shaped by the very technology used to convey its message. In the past it was always a monologue. But today it is evolving into a dialogue. The medium and the message have become virtually inseparable.

The endless search for competitive advantage and efficiency has made advertising's journey in the last 100+ years fascinating. Now companies are realizing that their most important asset is not capital equipment, or research capability, or their line of products. In the heated competition of the global marketplace, their most important asset is their customer and the relationship that they have with that person or organization. Protecting that asset has become the new marketing imperative for the 21st century. In an effort to do a better job of relationship marketing, companies are now learning that they must be consistent in both what they say and what they do. It is not enough to produce outstanding advertising anymore. They must integrate all their marketing communications with everything else they do, too. That is what integrated marketing communications really means. And that will present exciting new challenges to marketing and advertising professionals in the immediate future.

*SOURCE: CONTEMPORARY ADVERTISING, 25TH ANNIVERSARY ED., 2008, WILLIAM F. ARENS, MICHAEL F. WEIGOLD, CHRISTIAN ARENS, PGS. 48-50*

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