Wednesday, May 30, 2007

The future of advertising is democratic advertainment

Every article written on the future of advertising speaks about technology. And every article on advertising and technology speaks essentially about media issues of targeting, reach and interactivity. Well, I am not going to talk about those issues. I’m going to assume that my readers already know about all that and are planning to throw up the next time somebody mentions the interactivity word again.

So let me focus on two other issues that technology will pose instead. One is the democratization of advertising. And the other is the challenge of creating short form entertainment for an increasingly impatient and marketing savvy customer.

Advertising will make markets more democratic

I think the biggest difference that technology will bring to advertising is that it will reduce the advantage that large advertisers have in the mass media world. Today Levers, Proctor, Coke, Pepsi etc have a competitive advantage because they can pour large monies into building brands. They have made the price of entry in their categories so high that it is beyond the means of small companies even if they have an exciting and innovative new product.

In the future, small advertisers will proliferate. The media of the future will be so fragmented that no advertiser can afford to dominate it. In fact no advertiser will be able to ram their communication down the throat of their audience. It will be the audience that will determine what advertising they want to see and this will mean that they will gravitate to work that is entertaining or adds value to them. Or both. In this, the large advertiser will have no natural advantage over the small guy.

In fact, consumers will not be able to determine very easily if the advertiser is small or large. Today the production values of a TV commercial and the frequency of it gives you a pretty good idea of how deep the marketer’s pockets are. But if you watch a video on You Tube or get a message on your mobile, then it is more difficult to assess the financial capabilities of the backers of that message.

This is a good thing. Economists talk about an utopian state of “perfect competition” where there are large numbers of buyers and sellers and where the market forces determine prices. Market forces also determine which products will survive and which won’t. Today this situation is a pipe dream. The reality is that most markets are characterized by Oligopoly – a state where a few large players dominate every major industry.

But democratization of advertising will push the global economy more towards the state of perfect competition. Thus advertising will help make the global economy more efficient.

Advertising agencies will be the source of entertainment

Everyone talks about the crisis of advertising. But let’s for a moment focus more on the crisis of the entertainment industry. People are getting increasingly impatient with long form entertainment. People are watching less TV – and cribbing more about it. They are also reading less of newspapers and getting overwhelmed with the proliferation of outdoor media.

On the other hand, they are gravitating to short form content. They’re playing more games (the gaming industry turnover now exceeds the turnover of Hollywood!), they’re making friends at social networking sites and they’re enjoying video and audio content from sources like You Tube, iTunes and so on.

The question is – who is creating this new content? Hollywood and Bollywood are good at making long form content and are out of their depth in creating entertainment which is just couple of minutes long. The technology companies are good at creating the means of creating entertainment, but don’t know how to populate it.

And what of the famous, user generated content? This is a much over hyped phrase. At first glance it seems that users are creating all this fantastic content on You Tube that other people can go and watch. But this way of thinking does not hold up on closer scrutiny. The most watched videos on You Tube were the video diaries of LonelyGirl15. For months people thought that they were watching the unscripted & web-camera produced videos of an ordinary 15 year old. Turns out that the 15 year old was actually a model and the whole show was scripted and produced by a TV production house as an advertisement for itself. They have certainly succeeded in getting themselves noticed by lots of people.

Let’s look at other content on the same site. Euro RSCG London made a great commercial for Citroen (Alive with technology). This is one of the most parodied videos on You Tube. Similarly, the great work done for Dove (Evolution – the making of real beauty) has spawned a lot of wonderful videos (Slob Evolution).

So the picture you now get is that the best of the user generated content is actually generated by professionals – often from the advertising industry. And the rest of the compelling stuff are copies and parodies of stuff created by professionals.

This is a huge opportunity for the advertising industry. For us 30 seconds is a necessity, 2 minutes is a luxury and 7 minutes is a crime. For movie and TV content producers, 7 minutes is a segment, 23 minutes is an episode and 120 minutes is the least you need to make something decent. The consumer is tending more towards 7 minutes and less.

However there is a change that we need to make. We need to move from being brand and message focused to being customer and entertainment focused. That way our messages are more likely to hit home.


It is obvious that the future of advertising lies in new ways of connecting with customers. What becomes obvious after just a little bit of introspection is that these new ways of connecting will lead to new opportunities for new kinds of agencies and for a new breed of clients. Let’s drink to that.

This article was written on invitation for USP Age and was published in that magazine in the May 2007 issue.

1 comment:

narendra shenoy said...

Suman, that was beautifully written. When someone like yours truly, with admittedly limited intellectual equipment can follow your thoughts straight off the bat, thats something. Most informative. And most gratifying to know that no one knows quite which way the ball will spin. Lets drink to that indeed.