Tuesday, March 27, 2007

Pluto is not a planet

Bob Garfield just published a provocative piece on Adage.com discussing the Post-Advertising Age.
Because he's a gifted writer, you should read the whole column. But because we're all ADD'ing through this life, I'll be happy to post some of the most poignant parts:

"Maybe you'd better lean forward. Presently you will be given five reasons to consider something barely imaginable: a post-apocalyptic media world substantially devoid of brand advertising as we have long known it.

It's a world in which Canadian trees are left standing and broadcast towers aren't. It's a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalized and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing -- and even branding -- are conducted without much reliance on the 30-second spot or glossy spread.

Because nobody is much interested in seeing them, and because soon they will be largely unnecessary.

Perhaps you are already rolling your eyes. Perhaps you believe that vast structures on which vast societies and vast economies depend do not easily lose their primacy. Perhaps you believe that the TV commercial and magazine spread -- and radio spot and newspaper classified -- are forever and immutable, like the planets orbiting the sun. Good for you.

Now, say hello to Pluto -- the suddenly former planet. Forever and immutable, it turns out, are subject to demotion. This could be grim news for the agency business, which continues its erratic Pluto-like orbit around marketing budgets as if unaware that it has lost its stature -- and its relevance is next to go. In due course, you shall see how circumstances have conspired to threaten its place on the cosmic map altogether."

"Nor does the disruption end there. Since spring 2005, according to Magna Global USA, DVR penetration has doubled to 20% from 10%, and Forrester Research predicts it will reach half of U.S. households within three years -- well beyond the threshold at which 40% of advertisers say they will dramatically reduce their TV buys. Meanwhile, after years of steady growth in spite of steadily declining audiences, the broadcast-upfront market last year was down 5%. Coca-Cola, never a big upfront player, pulled out altogether. So did Johnson & Johnson, which shifted $250 million online. According to TNS, General Motors slashed $600 million from its 2006 ad spend. Is somebody nervous? Half of the 109 national advertisers surveyed by Forrester in 2006 said their ad agencies and media agencies were "ill-equipped" to deal with changes in the TV environment."

"Mass media, of course, do not exist in a vacuum. They have a perfect symbiotic relationship with mass marketing. Advertising underwrites the content. The content delivers audience. Audiences receive the marketing messages and patronize the advertisers, and so on in what for centuries was an efficient cycle of economic life. The first element of Chaos presumes the fragmentation of mass media creates a different sort of cycle: an inexorable death spiral, in which audience fragmentation and ad-avoidance hardware lead to an exodus of advertisers, leading in turn to an exodus of capital, leading to a decline in the quality of content, leading to further audience defection, leading to further advertiser defection and so on to oblivion. The refugees -- audience and marketers alike -- flee to the internet. There they encounter the second, and more ominous, Chaos component: the internet's awkward infancy.

The online space isn't remotely developed enough -- nor will it be anytime soon -- to absorb the advertising budgets of the top 100 marketers, to match the reach of traditional media or to fulfill the content desires of the audience. (Maybe viewers no longer demand their MTV, but what remains of the mass audience is in no hurry to surrender its Los Angeles Times and "Lost.") A collapsing old model. An unconstructed new model. Paralyzed marketers. Disenchanted consumers. It's all so ... chaotic."

(...)"Microsoft allocated to the introduction of its Vista operating system, 30% went online. If every national advertiser did the same tomorrow, Madison Avenue and Hollywood wouldn't be chaotic. They would be Pluto, relegated to some barren, subordinate outer orbit of the economy. And a lot of people would be singing a different tune."

Interesting stuff. I saw him speak tonight at the iMediaconnection Breakthrough Conference, and I was especially fascinated by the comparisons to the recent demise of the (former) planet Pluto and quotes from industry pros as well as folks like Bill Gates chiming in. This is a must read for anyone involved in the advertising industry. And make no mistake; if you work with digital signage, you are in the advertising industry as well. More than you think. I will have to let this piece sink in for a few days and will comment further on it. Until then, read it.

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