The sky is falling! The sky is falling!

chickenlittleIf you think Chicken Little is just letting off some steam, think again. This sh*t is bananas, people. And not in a sassy, Gwen Stefani kind of way.

What am I talking about? The massive, apocalyptic upheaval taking place across the media industry right now… the realization of the Chaos Scenario.

[insert melodramatic sound effect here]

Before I inundate you with data points certain to cause heart palpitations, let me pause for a moment to say this: Chicken Little was a total spazz. From his perspective, the sky WAS falling. From mine, it was just a storm passing through. If only he had stopped panicking long enough to find shelter and maybe some galloshes, CL might still be here today pecking away at corn meal, instead of gracing my dinner table all crispy and warm.

Now—back to the Apocalypse!

After posting yesterday’s “The end of advertising as we know it” piece, I sat down to read the March 23 edition of Ad Age, which just arrived on my doorstep that afternoon. What, pray tell, is on the cover? This headline:

Future May Be Brighter, but It’s Apocalypse Now

Sure, it’s an article penned by the same guy who presented the Chaos Scenario in the first place [Bob, if you’re reading this, I think you totally ROCK]. But “I was right!” bias aside, he’s got a real point.

As evidence, I submit Exhibit A: Bloodshed across every corner of the media industry!!!!

NEWSPAPERS:

  • Amid 23% population growth in the past two decades, US newspaper circulation has dropped 20%

MAGAZINES:

  • Newsstand sales—the “profit engine of the ad industry”—fell 12% in 2008.
  • Gross ad pages have dropped 22% so far in 2009 (and 2008 wasn’t exactly rosy!).

Lest you dismiss these data points as ‘just another victim of the recession,’ consider for a moment the remote possibility that it’s not; that the core issue behind these numbers isn’t circumstantial—it’s structural. To quote Wendy Harris Millard, co-CEO of Martha Stewart Living Omnimedia, “Advertising simply cannot support all the media that’s out there.”

UH OH. That’s bad, right?

BROADCAST:

  • Clear Channel, the fearsome behemoth that some predicted would consume the entire nation like a cancer if not stopped, recently laid off 9% of its workforce, dumped 56 of its TV stations and is now struggling under the weight of $20 Billion in debt—with little prospect of salvation.
  • Bernstein Research predicts a 20-30% drop in 2009 TV station ad revenue.
  • CBS’s prime-time audience was down 2.9% in the last reporting period.
    ABC: -9.7%.
    NBC: -14.3%
    Fox: -17.5%

Meanwhile, the COST of advertising on television has continued to climb:

“The average price of reaching 1000 households with a a 30-second spot in prime time was $22.65 in 2008… but effectively more like $32, because between 150 and 200 of those 1000 households use DVRs to skip past the ads.”

So basically you get to pay more than ever to reach fewer people than ever. Awesome!

Of course, this might explain why “by mid-February, 71% reported having slashed their budgets, and 6% more said the cuts were on their way.”

OUCH.

ONLINE:
The inevitable “disequilibrium between supply and demand” has taken its toll on online publishers as well.

  • Usage is soaring, but value is in the toilet.
  • Average click-through rates online are near zero.
  • Consumers have gotten pretty good at ignoring and/or avoiding even the most clever ads online.
  • Yahoo, the most trafficked website on the planet (3.5 Billion daily page views), has lost nearly 2/3 of its market cap since last spring.
  • Doom. Gloom. And more doom.

So now what? Panic? Take a cyanide pill? Go back and get your MBA?

photo credit: "Oh My God the Sky is Falling" by Liam Cooke

photo credit: "Oh My God the Sky is Falling" by Liam Cooke

No doubt, most industry observers (and participants) will find themselves frozen—with that deer-in-headlights look—for some time. Some will indeed panic, drink heavily, and/or send me hate mail.

Which is why I’m here to remind you that everytime a door closes, another one opens.

To some, the glass looks half empty. To me, it’s undoubtedly half full.

Insert 3rd illustrative cliche here.

Here’s the deal, people:
The universe operates in an unstoppable cycle of birth, death, and rebirth. At the moment, we are—COLLECTIVELY (as a species, and perhaps even beyond)—in the throes of a profound and utterly incredible death/rebirth cycle, magnified by the increasing interconnectedness that technology now affords.

The question is, are you going to be the guy whining about how sour the lemons are? Or the one who makes a lot of people happy—and gets rich in the process—making the most delicious, refreshing lemonade?

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The end of advertising as we know it?

laptoptv

I guess this is “old news,” as the data I’m about to share comes from a 2007 IBM Global Business Services study (aptly titled “The end of advertising as we know it”)—but perhaps that makes it even more compelling. Here goes:

71% of the 2400 consumers surveyed across five countries said they spend >2 hours/day on the Internet—not including work-related activities. In other words, almost 3/4 of this global sample spends several hours DAILY of their precious leisure-time online. [side note: do any of these people have children? Because if they do, what business do they have with 2 whole hours of daily leisure time?! I don’t get it.]

Meanwhile, 48% of the folks surveyed said they spend >2 hours/day watching TV.

In 2009, I’d bet my britches that the gap between those numbers has only grown larger with web use (fueled by time-intensive destinations like Facebook, YouTube, MMOs, virtual worlds, etc.), iPhone apps, on-demand TV, TiVo, DVR… and more(!) encroaching at a relentless pace on the Grandaddy of all advertising mediums.

The question is, as a brand, agency, or marketing professional… what are you doing about it?

Three heads in the sand

The “pretend it’s not happening” approach, while popular, is ill-advised. The music industry tried it a few years back when digital music first appeared on the scene. Now they’re hemorrhaging money and market share and being outsmarted by downstream vendors who responded to the shift toward digital.

[sigh]

Please don’t follow in doomed footsteps.

Even if I’m totally wrong about the increased gap (and we all know, the Genius is rarelyif ever—wrong), you can’t hide from the fact that you’ve still got a few disruptive forces that aint going nowhere, notime soon. Namely:

1. Consumers want control.
And not just of what they watch but how they watch it—and interact with it—as well as how they filter what they view, including ads.

And young people? They’re not having any of the “I WILL YELL LOUDLY AT YOU TILL YOU BUY SOMETHING” strategy of old. By next year, young Americans will outnumber Baby Boomers and make the shift toward digital (which they were BORN using, wanting, understanding, and expecting) a fait accompli.

I do hope you’re ready.

2. “Impact” is the new “Reach”.
Admit it. You’ve grown used to a world where “Reach” was the Holy Grail of marketing. For years, it’s been all about “impressions”, the idea being that the more eyeballs you snared, the more sales would result.

Now that the drugs have worn off, many marketers are dealing with a nasty hangover called “REALITY”. Just because you show up at a party looking wicked hot and flirt with EVERY guy, doesn’t mean you’ll go home with a ring on your finger. Get my drift? Same logic applies to the “spray and pray” philosophy of Old Marketing.

The party is over, folks. And the rulers (those funny things you measure stuff with) have come out.

Well… maybe not rulers per se. We’re all still trying to wrestle that nasty Metrics Monster to the ground. Oddly, I think he likes the wrestling and is growing fond of a good Full Nelson. [Dear God, it’s the drugs talking again…!]

Ahem.

Fact: Virtually all of us are enduring the joys of recession-mandated “rectal exams” in the form of account reviews, lowered credit limits, tighter budgets, and greater demand for true ROI. Impressions, clicks, even those new-fangled “engagement” metrics aren’t cutting it. The question is how did those impressions, clicks, and “engaged” consumers translate into increased brand awareness, positive word-of-mouth/mouse, and purchases downstream? If you haven’t figured out how to measure that yet, you’d better hop to it. Quick.

2/3 of the advertising executives IBM polled expect 20% of advertising revenue to shift from impression-based to impact-based formats within three years.

Yep. P.S. that research was published 2 years ago.

And last but not least,
3. The Consumer is also the Creator.
Thanks to technology, consumers have been empowered not just to choose their own destiny—but to create it. In the same way that we’ve seen the rise of “Reality TV” over the past several years, so User Generated Content is becoming The Dominant Force online. IBM’s previously referenced survey, for example, already showed in 2007 that UGC sites are the top destination for viewing online video content.

Look out, Mad Ave!

Which leads me back to my earlier question: Time’s are changin’. The masses are moving from one screen to another… to many. As a brand, agency, or marketing professional… what are you doing about it?

Why Traditional Advertising is Kinda F**ked (and what we should do about it!)

Attention brands, business owners, advertising agencies, and media peeps!!!!

I have some bad news. And it’s not about the financial markets, the election, or your expanding waistline. Nope—it’s far, far worse.

Are you sitting down? Good. Here it comes…

TRADITIONAL ADVERTISING IS IN A DEATH SPIRAL.

That’s right. DEATH SPIRAL.

Now before you freak and jump out a window (or worse—post nasty anonymous comments in reply to this statement), allow me to explain. And yes, to propose a solution… I am a Genius, after all.

Traditional Advertising’s “Death Spiral” can be attributed to 3 recent phenomena:
1.    Clutter
2.    Trust
3.    Social media

Let’s talk.

Clutter
I don’t know about you, but I hate clutter.

A little bit of nice, clean white space feels so much better.

If traditional ads were spaced like these last few paragraphs, they might actually WORK.

We might actually even ENJOY them.

But instead… most ads are more like this:
piledandsquishedrightontopofoneanothersothatwehardlyhaveachancetotakeabreath
letaloneprocessanyinformationordecodeanyoftheproductmysteriesorevaluatewhat
makesthembetterfastermoreeasiernewerDIFFERENTERorinanywaynecessarytoour
existenceonthisincreasinglyoverpopulatedplanet
GASPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP!!!!!!!!!!!

Clear as mud? ☺

The worst part is that the Clutter Problem is escalating at a DEATH-SPIRAL-INDUCING rate.

Consider this:
In 1998 Google had an index of 25M pages. As of this summer, its index had hit the mind-blowing milestone of 1 TRILLION UNIQUE URLs.

A F**KING TRILLION!!!!!

Still more to consider:

There are >100,000,000 videos on YouTube.com—with >65k new ones being added DAILY.

In 2005 (most recent data I could find), there were roughly 40 BILLION product catalogs published. That’s equal to 134 catalogs for every man, woman & child in the US.

Yes, folks, the average person is exposed to some 3000 marketing messages per day… but the American Association of Advertising Agencies says we’re only able to absorb (at most!) 100.

And let’s face it, that’s probably an inflated number.

PS. 90% of people who can skip ads, do.

Yes, but most of those messages are crap. What matters is good creative. Killer copy. Pretty women with big boobs wiggling around to a HAWT soundtrack.

Ok… NO. Neither creative nor copy nor boobs—nor any combination of the three—are likely to solve the clutter problem. Besides… you’ve got 2 more hefty problems to solve.

Trust
“Lets talk about trust baby, let’s talk about you & me…”

People don’t trust advertisers. Period.

You know it. I know it. Let’s call a spade a spade and move on. But in case you’re still skeptical (or just plain crazy), here’s proof:

“In a 1998 Gallup poll rating honesty and ethical standards across a range of professions, advertising people ended up near the bottom, sandwiched between lawyers and car salesmen.”

SANDWICHED BETWEEN LAWYERS AND CAR SALESMEN, people!!!!! And perhaps, if we were to redo this poll today, they might change those to “Politicians and Pimps” (both of whom are better-dressed, frankly-speaking).

On the complete opposite end of the spectrum is the trust that most consumers have in the opinions of other consumers.

“‘Word-of-mouth’ the most powerful selling tool…78% of consumers say they trust the recommendation of other consumers.” – Nielsen, Trust in Advertising, 2007 Global Consumer Survey Report.

And the trend is particularly true among younger consumers—namely, the ¼ of the US population (ONE F**KING FOURTH!) who are 14-24yo and were born wired.

Raised in a time where “SPAM” and “COOKIE” don’t automatically conjure images of food, today’s youth LIVES and BREATHES online:

  • They spend >16 hours online/week (online > TV)
  • 56% spend >1 hour daily sending instant messages
  • ¼ prefer social networks to F2F time with friends
  • Have an average of 53 online friends (vs. 11 “close” friends)
  • 96% use a social network DAILY

And they don’t care about your ad, people. They care what their friends think.

Trust me. 😉

Social media
Ah… every traditional advertiser’s favorite topic! YAY! Let’s hug.

Seriously, now—it’s common knowledge that people don’t like intrusive, one-way conversations. What is traditional advertising but an intrusive, one-way conversation?

The paradigm is shifting. Fast. Hard.

Ahh… The Solution!

Should we make the logo bigger?

Craft a catchy new tag line?

More girls? Bigger boobs?

No, no, no, no, NO!

Traditional Advertising’s Terminal Illness (aka Death Spiral) shall not be cured by a larger helping of the Same Old Shi*t. You’re going to have think different. Act different. BE DIFFERENT.

REALLY DIFFERENT.

Start by shifting your focus more on branding and less on advertising. Yes, branding. That magical je ne sais quoi that ultimately results in the feelings/thoughts/attitudes that people have about your product/service/company.

You mean our tagline?
No.
Our logo?
No.
The killer copy on our website?
No.
…..Our tagline?
No.
Are you sure?
Yes.

Your brand isn’t what you say your company/product/service is. It’s what THEY say it is.

Branding isn’t advertising.

In fact, it’s more like… your child. You can’t control it (though it’s natural to want to try)… but you can [and should] certainly influence it, enable it, embrace it, and inspire it.

Start by listening. Really listening. No, REALLY listening.

There. Doesn’t that feel better already?

A double dose of Genius

While the term “Web 2.0” has become rather cliche, it’s ugly step-children, Marketing 2.0, PR 2.0, Branding 2.0, Advertising 2.0, and (Dear God) Business 2.0 are just beginning to see their days in the sun.

Unfortunately, there’s a gigantic gap between coining a term and embodying it—and thus we hear a lot of talk and see very few results on any of the above fronts (though the Genius does her best to chronicle those rare gems that do).

Today’s Bonafide Genius Awards go—for better or worse—to two shining examples in the “talk” category. (It seems my search for examples of “results” this week has been fruitless.) Clever, pointed, entertaining, and spot-on in their articulation of the industry cross-roads that smart marketing pros are responding to, they’re shining examples of how dull, cliche terms get a new shine when someone puts a little Genius into their message.

Congrats to Openhere for The Break Up and Paul Isakson of space150 for What’s Next in Marketing & Advertising.

Advertising 2.0 Genius (a.k.a. “The Break-Up”)

Marketing 2.0 Strategy (a.k.a. “What’s Next in Marketing & Advertising”)

P.S. A good number of you (the smarter ones, that is) have already seen these, but for the rest of you… watch and learn.