The end of advertising (and start of data)

David Droga, founder and former owner of world renowned creative agency Droga5, sold the agency to Accenture in April 2019 in a move that came as a big surprise to the advertising world. One of the most creative minds in advertising selling a profitable and successful agency in the prime of its life to one of the least creative companies in the world – from an advertising perspectice – was already shocking enough, but what really shook things up was the notion that besides competing against every teenage-run pop-up agency and the traditional agencies, mainstream creative agencies were now going to have to compete against the major traditional consulting agencies as well.

The end of advertising

In his book, The End Of Advertising, Andrew Essex (a former executive of Droga5) argues that advertising has had a great run but now needs to take a step aside as the world has changed and its role in society been reduced. His argument is wrapped in a story of how he one day discovers ad blockers and consequently starts blocking ads out of his life without any bad sentiments despite ad blocking essentially chipping away at the foundation of his work: forcing people to focus on creative materials in an effort to get them to by the product on display. Essentially, he realized that humanity had reached a point where it made advertising in its traditional format redundant.

The broader concept he describes in the rest of his book is that we have reached a point where there is enough good content widely available that advertising no longer needs to be a part of the process.

For example, in the old days before everyone had a DVR one just accepted that when watching TV having ads interrupt your show was just part of the process. If you wanted to catch that new episode of The Simpsons, you needed to accept that the show would be stop a few times to make room for (often irrelevant) ads. The same concept applies to magazines, listening to music on the radio, and really consuming any form of (nearly) free content. If you wanted it to be free or cheap you had to accept that ads were going to be part of the process. As a result, advertisers would offer insane amounts for 30 seconds of ad time during the airing of a new TV show or for the back-cover of a magazine (The Economist still charges over US$ 200,000 for the back cover for one week on their rate card).

Today concepts such as binge-watching have taken off thanks to formats such as HBO, Netflix and Spotify, where one pays a monthly fee to get unlimited access to all the platform’s content, without being interrupted by advertising. Many YouTube channels and blogs (such as this one) also offer content with little to no advertising, for which an ad blocker can help remove the little advertising there is. Companies have changed their business models to not have to rely on advertising any more, and many are doing fairly well in the process.

The traditional advertising world is crumbling. While the occasional “good ad” does come on, who cares? The vague link between a TV ad and sales is increasingly being questioned and dropped by more and more advertisers. Advertisers, and especially creative agencies, need to rethink their business model if their brands are to stay relevant with consumers.

Enter meaningful advertising

It’s not all gloom and glum for ad agencies. People not willing to consume ads to get their content just means the industry needs to help brands be meaningful in different ways. Almost every brand in the world plays some role in the mind of their customers, something that was traditionally demonstrated with a TV/radio/cinema/magazine ad reflecting these values. Today brands need to go beyond placing a pretty picture, some text and music on media to demonstrate their relevance. Essex brings up the example of Citi Bikes, a bike-rental service run as a side-business by Citibank in New York. While not at all linked to the core business of the bank, people really like the service and use it quite a bit, and in the process let Citi demonstrate its value of being a reliable, convenient, and modern bank.

Another approach to making brands more relevant is to take a closer look at current marketing efforts and trying to make them align better with a person’s mindset. By this I don’t mean showing banner ads to a relevant audience based on traditional demographics – and essentially just hoping that something sticks – but advertising based on the phase the consumer is going through in the customer journey.

Each customer goes through the steps of the customer journey, grossly simplifying:

  • Awareness – When they don’t know your brand
  • Consideration – When they know your brand and know how to compare you to competing products or services
  • Purchase – When a person goes over to a purchase moment (doesn’t mean they have bought anything!)
  • Satisfaction – Shortly after a purchase has been made
  • Loyalty – When people keep coming back
  • Advocacy – When people tell others about your product

This is relevant for everything from shampoo to buying a car, however the timeframe from start to finish will be considerably shorter for cheaper items.

Modern data analytics platforms, such as our Digital Badger solution, make it possible to track people’s interactions across different media and even places. These platforms capture data from a variety of sources, and with some clever math and insights on the relevant business, are able to create a customer journey flow illustrating the number of clients in each phase of the journey.

However visualizing the journey is just one step in the process, you also need to act on it. With the knowledge of how many people are in each phase of the journey you can better spread your efforts (and budgets) on making ads relevant to a person in a particular phase of the buying cycle – as opposed to creating a one-size-fits-all setup. This can be done through digital means, such as using a marketing automation platform like Hubspot or Marketo, or off-line if you have more customers there (such as at a brick-and-mortarr store), or by using one of many marketing tactics.