The spectacular rise and fall of the dot-com sector is having a tremendous impact on the advertising world. Advertising has always been cyclical in nature, so those in the industry have come to expect turmoil. But I predict that the Internet era, and the emerging technologies that accompany it, will have a more profound effect than ever on advertising—particularly television advertising. Advertising is about to become accountable.
Many of the traditional advertising practices and methodologies of the last 20 years will someday be regarded as one of the biggest scams in the history of business. The goal of advertising is to increase sales of the advertiser’s product or service. But the advertising industry has been successful at almost completely eliminating accountabil-ity; hence it is fraught with waste.
That waste starts with media. Pricing is primarily based on "eyeballs or exposure," with the supposition being, "If they see it, they will buy." This proposition comes with several obvious problems. For most advertising channels, it is almost impossible to measure eyeballs with any degree of statistical accuracy. Television is the worst offender, with companies shelling out huge sums of money based on the viewing habits of a few thousand Nielsen households.
Most other advertising mediums price themselves based on the same flawed statistical data. Plus, the average consumer is now exposed to over 13,000 different marketing messages per day—so even if he sees a message, it is easily lost in a barrage of promotion. Media pricing seldom takes into account the massive amount of competition any message has to reach a consumer. Pricing is just based on the fact that it is positioned so a consumer "might" see it. Case in point: The Wall Street Journal reported that over five percent of people surveyed claimed to see a nonexistent spot air in the Super Bowl.
The equally big issue is whether consumers will buy a product or service once they’ve seen it.
The problem with much of today’s creative is that it doesn’t tell us what is being sold, much less motivate us to buy. Advertising professionals who would really prefer to be screenwriters, directors and abstract painters create expensive ads that satisfy their artistic desires, but fail to communicate anything substantial about the product. They justify and defend this approach by talking about "protecting the brand"—somehow intimating that the only proper positioning is bizarre creative that shocks or amuses, and leaves the consumer befuddled.
This scam continues as they convince clients to spend huge media budgets to barrage consumers with a convoluted message, based on media pricing that has no connection to the real value of the advertising time. They cushion the blow with wonderful client perks and legions of junior AEs that make marketing directors feel like celebrities. "It takes time and money to build a brand," they argue, and accordingly the clients may spend a year or more and millions of dollars discovering that people love their ads, but have no idea who they are, what they sell, or why it should be bought.
Coca-Cola, Budweiser, and Nike are brands. Since we understand them, we expect breakthrough creative approaches that emphasize they are still around and vibrant. They can afford the inefficiencies of this advertising environment because of the scale of their distribution and market, and their advertising ultimately does its job: to sell more products. But most advertisers do not enjoy that luxury. Even established brands often make the mistake of giving us too little information and too little reason to buy.
And now the Internet is changing everything. The Web has made it acceptable for companies to sell direct what traditionally only sold via retail. And when companies sell direct, they soon come to understand the relationship between creative, media, and the consumer. They begin to think in terms of the "return on investment" of their advertising, as opposed to investing endless sums on the promise of the brand.
This mindset leads to clearer creative messages based on what compels the consumer to buy. It also changes the way media is valued and purchased. Interactive media buyers quickly caught on to the fact that "visits" don’t necessarily have any relationship to sales. This philosophy of valuing media at least partially based on its ability to generate sales will become more common in all media. Interactive television will especially change the way creative and media are regarded, as consumer response to advertising will be almost immediate, and creative and media will be very accountable. "Eyeballs" will give way to "cost per qualified inquiry" and "cost per order" as a media valuation.
And all of this is really good news for those of us working in television advertising that embraces this new approach. Our reach will no longer extend only to television viewers—as full-motion video extends from television to the net and the many other distribution channels currently in development. The key is to embrace a new accountable advertising philosophy that rewards the industry when our clients make money.
