Alan Mitchell: Advertising – the glue that’s no longer sticking

Media’s new content-driven payment systems are squeezing advertising out of the financial equation, forcing it to rethink its value to consumers, says Alan Mitchell

What will the media and advertising landscape look like in ten years’ time? The Marketing Society asked that question at its recent annual conference, and if you wanted two words to sum up the answers they would be “clutter” and “permission”.

Bartle Bogle Hegarty chairman John Hegarty summed up the challenge when he characterised the TV commercial as “an electronic foot in the door”. “Our business was founded on the basis of interruption,” he said. “We tripped people up on the their way to somewhere else”. Notions like unique selling point and opportunities to see (OTS) were part of a communications system based on “slam-dunking messages into consumers’ brains as forcefully as possible”.

But now, he warned, “the public has taken hold of the levers of power”. The sheer volume of advertising, combined with its failure to engage people, means that “much advertising doesn’t work”. Indeed the endless repetition of ads, driven by the OTS philosophy, amounts to little more than “paying the public to switch you off”. And now that they can go elsewhere, they’re doing so.

As a result, he suggested, we have to move beyond OTS and “the land of interruption” to adopt a new mantra of engagement. Brands and advertising must entertain, engage and inspire. “That’s the fundamental change. We’re not really going to be in marketing. We’re going to be in entertainment”.

Ford Britain chairman and managing director Sir Ian McAllister took a different tack. As advertisers compete for share of mind, clutter will become “totally unreal”, he warned. Success will come from expert targeting and the ability to be relevant. That’s why, he said, Ford is shifting its priorities from traditional advertising to data mining: to communicate information about a product tailored to you as an individual. That information could include all the trappings of interactivity, such as interactive designs which enable consumers to drill down to the level of detail they want in the areas that interest them.

Picking up on this theme of interactivity, Martina King, managing director of Yahoo! UK and Ireland, predicted a transformation in media planning. An always-on ubiquitous Internet – that’s just there, waiting to be used – will become the first port of call for consumers wanting to access any sort of information, whether they’re thinking of a purchase, planning a journey, wanting to find out about a new show, etc. Other media channels may be fragmenting, but the Internet is emerging as a truly mass medium. It will become, she said, “the bedrock of all media planning”. Every company’s communication strategy will start with its Internet strategy – with messages available for consumers to access 24 hours a day seven days a week. Bursts of traditional advertising will be laid on top.

Nick Barley, vice-president of marketing for Oracle UK, meanwhile talked of a world where information follows you around, is always on tap, and where users specify communications preferences. In this world, he suggested, the only efficient and effective ways that advertisers and consumers can meet is via communities of interest and permission-based marketing. A key issue here is how to deal with the protocols of permission and communication.

Of course, change always come slower than people predict, and many features of new worlds turn out to be very similar to old words. Brands still need fame, and there are still many opportunities to become famous. Mass media events will not disappear.

Nevertheless a worm is turning at the very heart of the media and advertising industries, to change the nature of both their critical resources and critical mechanisms. Rising information overload and content commoditisation mean that their crucial resource is no longer content but consumer attention. Power is shifting from the media owner and advertiser to the attention owner: the consumer. Meanwhile, fragmentation and interactivity mean the critical mechanism is changing from push content (broadcast to all and sundry) to pull (me accessing the content I want).

This is turning traditional media economics on its head. Until very recently, the media’s underlying economic equation has revolved around the barter of averaged attention, negotiated implicitly. Media owners supplied content to consumers free of charge (or at a heavily subsidised rate) in return for consumer attention (which was also supplied free). They then monetised the value of this attention (in bulk) by selling it on to advertisers.

The BBC and the licence fee notwithstanding, this centre of gravity is now shifting towards de-averaged – that is, specific – transactions, negotiated explicitly. Pay TV, for example. Or consumers accessing a website that particularly interests them.

As a result, advertising is increasingly having to fend for itself in the value stakes. Yesterday, it was the glue of the media system, holding it together by virtue of its ability to turn consumer attention into cash. The bizarre thing about this glue, however, was that it offered virtually zero consumer value in itself. As far as the advertiser is concerned, value is embedded in the product not the ad. That’s what consumers pay for. Likewise with the media owner. Consumers buy editorial, not ads.

In the move from the implicit bartering of attention to explicit transactions about specific content, advertising’s role as an economic glue is no longer part of the equation. As a result, to earn consumers’ attention, advertising is having to learn how to add value to consumers in its own right.

That’s what lies behind all the talk about clutter and permission. In straightforward, direct competition with any and every other claim on consumers’ attention, advertising has to offer superior value for attention. Whether this is via Hegarty’s entertainment, McAllister’s data-mined relevance, King’s easily accessed information, or Barley’s communities of interest, it’s the same underlying force at work expressed in different ways.

The critical question is: which of these alternatives offers the best return on attention? For media owners, advertisers and consumers alike, getting our heads round this question will take at least another ten years.