Are advertising budgets going to dive down? It seems like a delusional prediction that actually forecasts that the advertising industry will undergo a shake-up similar to that of the American automotive industry in the 1970s. Giant brands such as General Motors and Chrysler were forced to declare bankruptcy, not before they received billions of dollars in taxpayers’ money from the US administration. Later, some of the Detroit brands succeeded in re-establishing themselves after abandoning unprofitable lines, cutting down models, streamlining processes, replacing their management team and creating effective partnerships to better cope with the new world after the Great Depression.
The advertising industry is about to suffer a similar jolt, yet will not be able to resurrect itself unless it invests in new formats, with new talents, different manpower (more technology-oriented) and new business models.
. According to recent predictions the ability of advertisers to reach customers with ads will drastically fall in the next five years, as well as the effective response of consumers to these ads or marketing messages.
Why have these traditional advertising campaigns proven less effective?
It’s all about the relationship between ad and consumer. A relationship that is becoming problematic for the consumer: the advertiser wishes to “buy” the target audience’s time but gives back too little in return. Advertisers today underestimate the consumer’s precious leisure time – the number of ads, their quality, the unfocused, insufficient targeted attack, all drive consumers to find ways to effectively avoid exposure to them.
The digital natives are a segment that does not use linear television, does not read newspapers, a high percentage of them block banners, and billboards are perceived as a strange visual disturbance.
So where can you catch them? Spread across various platforms such as Instagram, Snapchat, WhatsApp, Music apps and so on. There is a need to build a wide micro-publishers based plan in order to reach them. This approach is not supported by fat media budgets.
A one-way communication / relationship of a main message that speaks to the entire public is no longer effective. The entire traditional advertising industry that has until now, made a living from the juicy media acquisition model, based on these formats, is being replaced by the new star with the old advertising formats fading away.
The digital age has turned all of us into content creators and content consumers at the same time (Prosumers). We are all influenced by friends or friends of friends much more than by any heavily invested one-to-many advertising format. Brands should be looking for a way to penetrate these circles of influence, instead of spending wasted capital on expensive and low-attention media.
What can be done to keep this industry vital and relevant?
Micro-segmentation – all advertising work should be conducted around small clusters of target audiences, while thoroughly familiar with the characteristics of that audience. This is not about their socioeconomic or demographic status, but rather the creation of accurate profiles based on their social-psychological characteristics:
What do they believe in? Whom do they trust? What are they afraid of? Who are their friends, what are they talking about, who influences them and who do they influence? What are they talking about? What do they believe will improve their lives?
On the basis of an in-depth acquaintance and social intelligence, companies’ activity should be focused on the values that the brand can provide to the segment. It is not always necessary to use high-level communication channels – there is no point in yelling at this audience via television and / or portals. Effective reach will happen through Influencers, accurate YouTube channels, and targeted bloggers. Thus, choosing the right channel is necessary for getting attention & listening, which are necessary for forming a dialog at the end of which there is a chance to persuade.
Without deep involvement, there can be no relationship between brand and consumers. There is no marketing without Emotional Engagement. That means the strategic entry of brands into content and content areas – blogs, Instagram, Facebook, a brand channel on YouTube, bot chatting software, activity on relevant forums, mobile presence, setting up an app on smart TV if necessary, and so forth. There is no other option. The pressures and opportunities for all players in the market have changed, and consequently require everyone to change their perceptions.