Newfangled works with independent agencies to create lead development web platforms for their clients.

Newfangled works with independent agencies to create lead development web platforms for their clients.

Long Tail of Advertising Venues

Mass Media Publication versus Blogging


Basic print advertising involves creating a compelling ad campaign for a client and devising a media plan that targets publications with compatible demographics. Easier said than done, but this kind of transaction is the bread and butter of the advertising industry. Most media publications give advertising agencies about a 15% discount on media buys, which the agency keeps as their fee. Take the example of a client who sells high end leather office chairs to executives. After an agency creates an ad campaign, it might place it in media relating to golfing and yachting magazines since wealthy executives tend to read them. But suppose a percentage of these executive subscribers began reading golfing and yachting blogs. Over the months they begin to experience a shift. The information they used to get in the magazine comes to them from RSS feeds and blogs about golfing and yachting. They begin to find that when they get their magazine, they've already read many of the articles and are already informed about the topics. They start pushing the magazine aside and eventually it goes from the incoming mail to the trash. This is happening right now, today. What percentage of news consumers are spending more time with RSS feeds and less time reading magazines? I don't know, but whatever percentage that is, it's growing, and whatever percentage it represents is the exact percentage of the lost value of the media dollars spent for that campaign.

Does any one golfing blog represent a threat to Golf magazine? Nope. But all of the blogs about golf, which as a group contain far more detailed and current information than the latest issue of Golf, do.

As this percentage grows, manufactures of high end leather chairs will stop spending all of their print media dollars on magazine ads. They will shift some their spending to reach customers where they are. But how many small and mid-size advertising agencies are deploying marketing campaigns that include advertising within golf blogs as well as the traditional publications?

What is true of Print vs. Blog is also true of Television vs. YouTube. In addition to a shifting of content consumption there is also the shifting of delivery mechanisms of traditional content. This can be seen in local advertising in the way the value of yellow page advertising is dropping as consumers move to local search tools like maps.google.com and other local search engines. Dollar for dollar the investment in a yellow page ad is dropping because fewer people are using the Yellow Pages to find local services. TiVo and other DVR options are similarly devaluing the effectiveness of television delivery channel. For every television viewer that skips through the commercials the value of television advertising drops. Disruption is here.

But there is opportunity in disruption.

As a result of the blooming of content and the rapidly expanding number of content delivery platforms, companies are not likely to spend less on marketing--they'll probably start spending more. But will this money be spent through the traditional advertising agency? Not if the agency isn't Advertising 2.0 compatible. Instead these dollars will leave the agency and go to new firms that are specializing themselves in these new media areas.

So how does the small to mid-size traditional advertising agency become Advertising 2.0 compatible? It takes some adjustment and transition, and neither will be easy. The hardest part is just getting your head around all the new tools and and how they are used. Part of the difficulty in Advertising 2.0 is inherent in what it represents. Advertising 2.0 is the advertising response to Web 2.0 which, as already described, arises from the proliferation of so much information. As mass media outlets get disrupted they're being replaced with thousands of much smaller entities. The simplicity of placing media buys with a few of the most dominant publications is being replaced by the need to be present in thousands of individual blogs, social networking sites, and vertical search engines. If you thought keeping up with email was hard enough, wait until you try staying abreast of all blogs and RSS feeds in a given area. But we have to start somewhere so let's get to it.







Comments

Justin | March 2, 2007 9:38 AM
While I can appreicate the point of your Blockbuster/Netflix comparison, your statement about Netflix not having any shelves is incorrect. They do in fact have enormous warehouses (distribution centers) with shelves stocked full of thousands of DVDs. 60 Minutes ran a piece in late 2006 on Reed Hastings, the founder of Netflix, and they showed how one of these distribution centers operates. Ironically, Netflix is starting to feel the heat from companies (such as iTunes and Movielink) which provide download services for movies and other media. In January, Netflix quietly launched it's "Watch Now" feature – a near-DVD quality streaming service for its subscribers. You can read more about it here: http://en.wikipedia.org/wiki/Netflix
Eric Holter | March 2, 2007 10:06 AM
Thanks for the comment Justin. Indeed, you're right. Netfix does store inventory but they don't have to maintain thousands of retail brick and mortar shelves. Certainly digital delivery is on deck for yet more disruption to the entertainment distribution industry. I've been looking forward to access on demand media for awhile. Looks like it's here in part, and just around the corner in whole. Thanks again!

↑ top