Last month, Bob Garfield published an article (4th in a series) in Ad Age that created some buzz among media bloggers.Â Written more as a warning to ad agencies, it has obvious relevance to media companies as well.Â Although in many ways typical of the doomsday genre, it also has some twists.
A lot of time is spent chronicling the decline of traditional media, as well as someÂ denial statements by media company leaders.Â At this point, I would think the dead horse no longer needs to be beaten, but perhaps it does.Â As critics write as if traditional media is already dead, and some proponents talk as if it is only getting stronger, the truth, we know, is somewhere in between.Â More importantly, accepting the truth means understanding that the decline has begun and that new models must be found.Â But these new models don’t have to replace the old models wholesale, they become part of a portfolio that includes both.Â That, however, is a mouthful.Â Imagine the change required of a newspaper company to view the newspaper as a portfolio product rather than as the heart and soul of the organization.Â Or the same change in attitude at a television network.
Â Garfield goes on to make the point that while previously we assumed that ad spending shifted among media but did not shrink in total, he believes that now it will shrink.Â As producersÂ gain the ability to directly reach finely targetedÂ consumer segments, brand advertising, and certainly mass brand advertising, becomes less relevant.Â
Mass advertising flourished in the world of mass media. Not because it was part of God’s Natural Order but because the two were mutually sustaining. You’ve read the Ten Commandments; not one of them is “Thou shalt finance hourlong dramas” — nor is there a word in there about scale. So why assume that either must transition to the new model? Not only is it economically nonsensical, it squanders the very nature of the digital universe, the ability to speak with — not to, but with — the narrowest communities and individuals themselves.
Garfield also lists five reasons the online world will largely displace traditional advertising:
- People don’t like ads
- But they crave information
- The consumer is in control. No, really
- Diversion of ad budgets
The discussion of each one of these is definitely worth reading, althoughÂ I tend to see a half full glass in each, not half empty.Â We know people don’t like ads, but they doÂ like consumer products,Â so there is a tremendous advantage waiting to be gained by the organization that figures out how to tell them about consumer products without annoying them with advertising (advertising is in the mind of the beholder, isn’t it?).Â Obvious, but often ignored, is the fact that people crave information.Â Good news if you’re an information provider.Â Point three includes a great quote from media economist, Bruce Owen:
I guess the most important thing that I would be asking myself is: How can I make advertising something that people are not only willing to put up with but actually have positive willingness to take?
Â I’d be asking myself the same thing.Â As ad budgets get diverted to exploit the Internet’s ability to target, it’s more good news for media companies that own targeted audiences, or can target audiences.Â Everyone, right?Â Finally, Garfield worries that pay-per-view content “would eliminate advertising from the equation.”Â Well, if you’re a content producer this scenario is probably good for you, but I’m not sure I follow the logic in any case.Â I once worked for a company that made a substantial amount of revenue through pay-per-view advertising.Â That may have been some years ago, but the point is the same – there must be some mechanism by which consumers are made aware of the content.
Although the piece was written for ad agencies, I think the point for traditional media companies is not that they’re doomed, but that they must change.Â Not exactly a novel idea.Â For many, traditional media companies areÂ assumed to be stockedÂ with Luddites, unable to see the future much less act upon it.Â Talking about the online market’s ability to absorb ad budgets moving from traditional media,Â Garfield says:
A collapsing old model. An unconstructed new model. Paralyzed marketers. Disenchanted consumers. It’s all so … chaotic.
Chaos, yes, but also opportunity.Â For traditional media companies that believe their mission is to deliver news, not print newspapers;Â deliver entertainment, not broadcast over the airwaves; the future can be bright.Â But it can’t be the same as the past.