Past, Present and Future: Past, Present and Future: Some Thoughts About Some Thoughts About Advertising and MediaAdvertising and Media

Presented By

Professor Neal M. Burns

The University of Texas at Austin

at

Escuela de Ciencias de la Comunicación

Universidad de Costa Rica

15 Febrero 2008

Advertising Agencies; Advertising Agencies; Their Practice and BeliefTheir Practice and Belief

• Some observations from a recovering advertising man - and don’t tell them I spoke with you and discussed these secrets or they’ll drum me out of the corps.

The Way It Was . . .The Way It Was . . .

None of us Remember None of us Remember This . . .This . . .

But we know it’s old (1920?). Most ads have short shelf lives.

The Ads Said Use The Ads Said Use Modern Technology Modern Technology and Treasure Your and Treasure Your

ValuesValues

And Then Things began To And Then Things began To Change.Change.

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Bernbach:The Introduction of IronyBernbach:The Introduction of Irony

Magritte . . . And BernbachMagritte . . . And Bernbach

• It’s not a pipe - it’s a picture of a pipe; it’s not about sunny-side up eggs -

• they both ask the viewer to work it out, to interact.

And, This Is Now . . .And, This Is Now . . .

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Brands Became IconsBrands Became Icons

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Agencies Love Breaking Rules!Agencies Love Breaking Rules!

Brand BuildingBrand Building

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Cause Related Ads AppearedCause Related Ads Appeared

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Nothing is more endearingThan kittens -- and Animal Care keeps Diners Club Customers.

Feel Good

Awareness

And The Ads Said What?And The Ads Said What?

• Generally talked about lifestyle more than product

• Talked to the user - more personal relevancy and generally less emphasis on product features

• Less (constructed) reality - disposed to irony and quite cynical - especially of advertising - filled with expectancy & surprise

• Emphasis on building the brand

• Social and cause related work appeared• Often entertained more than informed & Fought the

clutter

BTW - Sometimes Agencies BTW - Sometimes Agencies make Huge Mistakesmake Huge Mistakes

Consider Advertising As a Cultural Consider Advertising As a Cultural Expression - And As a Knowledge Expression - And As a Knowledge

Producing Industry. Producing Industry.

• Advertising reflects contemporary values

• It utilizes the imagery and sounds of the time

• It can stimulate behavioral change

• It gives things meaning

How Did The Contemporary Look in How Did The Contemporary Look in Advertising Come About? Advertising Come About?

• Think Postmodernism

• The Bernbach “Revolution”

• Being noticed amidst growing clutter

• Market/segment likes changed

• Agencies grew to be financially capable

In 1984 the Relationship Between In 1984 the Relationship Between Postmodernism and Advertising Postmodernism and Advertising

Was Made Forcefully and Was Made Forcefully and Unforgettably.Unforgettably.

• The developing philosophy was against the established order - against shirts and ties, against the lack of minority representation - even against the 8 note octave as the 3 B’s knew it -- and lots more.

This Was The BlockbusterThis Was The Blockbuster . . .. . .

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What Were The Big Changes In What Were The Big Changes In Ad Agencies From The Past?Ad Agencies From The Past?

• Moving from commission based compensation to fee structure

• Establishing client centered teams

• Becoming brand builders

• Establishing the creative strategy as their purview.

Let’s Look a Bit Closely At The Way Let’s Look a Bit Closely At The Way Current Advertising Agencies Current Advertising Agencies

Function Function

Agencies Developed A Process - Agencies Developed A Process - With Great Similarity Across With Great Similarity Across

AgenciesAgencies• The professional agency employee is almost an

itinerant worker

• Word and “secrets” spread

• The work is widely celebrated

• Agencies offered the promise of managing the “creative process”

Importance of RelevanceImportance of Relevance

VideoVideo

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So, Why Does This Stuff Work?So, Why Does This Stuff Work?

• It is culturally resonant - it is part of our time.

• It speaks to what the brand delivers.

• Because it is relevant to the target(s).

• Intelligence is paralleled in product’s voice and respect for the customer.

• It reinforces the character of the Brand building off leverageable equity.

But This Is Really Now!But This Is Really Now!

The Old Agency Business ModelThe Old Agency Business Model

• Initially gave away the creative and lived off the media commission• Hourly rates established, contract• Monthly fee based on the scope of the project. (Clients feel costs are better controlled - agencies enjoy security of fixed monthly income)• The idea RULES !• Agency does brand building cross platforms (print, TV, online, events and experiential) • Agency

A New Agency Business ModelA New Agency Business Model

• Hourly rates seem passe’• Monthly fee based on the scope of the project. (Clients feel costs are better controlled - agencies enjoy security of fixed monthly income)• The idea RULES !• Agency does brand building cross platforms (print, TV, online, events and experiential) • Agency asks for an equity stake and a percentage of sales

Within the Agency The Within the Agency The Traditional Management Pyramid Traditional Management Pyramid

Got Squashed and New Roles Got Squashed and New Roles EstablishedEstablished

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Why Must The Agency Business Why Must The Agency Business Model Change?Model Change?

• There is a disconnect between believing in award winning creative, and a comprehensive brand strategy . . . and managing multiple communication channels (not to mention the insertion of consumer generated content) in a financially rewarding fashion.

The Network TV Ratings DeclineThe Network TV Ratings Decline

• In 1988 networks had 67% of all TV viewers. • In the early 90s, Network cume share dropped

to 53 percent.• In 2003, 38 percent and a network needed a

minimum rating of 12 to keep a show on the air.

• In 2008 a major network wins the primetime ratings war with an 8 rating (~17 mil. viewers).

WHY

One Reason:One Reason:Consumer Generated ContentConsumer Generated Content

• User Generated Video (UGV) growing rapidly:

Year Views

• 2005 3,250,000,000

• 2006 13,156,655,241

• 2007 22,368,960,636

• 2008 34,000,681,857 (est.)Source: AccuStream iMedia Research, January 2009

Cultural/Societal Impact ?Cultural/Societal Impact ?

• We have little understanding or intuition for the cultural impact that will occur when the top 40% of US households (based on income) have half a dozen computers, all of them connected to the Net, all of them with "instant on." They just don’t know how important a part of our daily life the online world will be!

• Jeff Bezos interview with Chip Bayers, Business 2.0 September, 2002

Another Reason:Another Reason:Retail Practice on InternetRetail Practice on Internet

• Increased effectiveness integrating message across multiple channels

• Multi-channel marketing strategy became the rule

• Permission marketing and the Internetworks -- very well

• Social networks are but one manifestation

Some Possible “Whys” ???Some Possible “Whys” ???

• Video gaming is preferred equally by males age 8-34 to TV

• Older males play video games at expense of TV viewing

• Developments like Wii change “purpose” of the TV set

• Consumer generated content is preferred by many as opposed to client generated material

Perhaps Another Reason: BlogsPerhaps Another Reason: Blogs

• Weblog users rate blogs as highly credible.

• In tests blogs are rated almost 3X ads.

• A higher level of trust exists for User Generated Content (UGC) . . . Blogs.

• 39 Million Europeans report not buying product or services based upon advice from blogs!

And So . . .And So . . .

• The advent and access broadband presents and the rising importance of mobile and in-place digital communication are major changes in message delivery.

• The language of media – CPM, CPP, CPI and the rest - needs to be modified to embrace the new delivery systems currently in place and those being developed.

• Revisions in our thinking about cost and effectiveness of media delivery are needed.

• And, in a muti-channel, media agnostic environment -- the rule of break-through creative has ended and a new agency model is already here.

Questions or Comments ?Questions or Comments ?