Guest Post : Where's The Ad Cycle Going?

Regular commenter Rory MacDonald has kindly written this timely guest post.  After the traders, it is the Trad-Ad’ers who will be the next to go. I was chatting online nearly a year ago about the fact that spend around the Beijing Olympics was the only thing holding up the Big Ad agencies. In an economic downturn, marketing and advertising agencies are always the cat that gets kicked twice as hard by their downtrodden clients. And yes, doom and gloom mongering is just so easy to do at the moment that it is already very tedious. However, as traditional advertising takes its cyclical beating, this time there is someone new on the sidelines watching with a sense of schadenfreude, knowing that the market is actually turning to their advantage and that it may never fully turn back.  It's not just that the big advertising firms don’t get online (James posted that they do when he got back from Cannes).  But I think it is that they don’t want to. Real, Open Source, online marketing brings the same free culture market dynamics to a stagnant, over-monopolised market that Open Source has done to the software world.  We are unlikely to see Sir Martin Sorrell selling the Big Issue any time soon. The Microsoft equivalents of the media and advertising world will we be around for a long time and run alongside the free culture upstarts.  But these monoliths will be faced with the same dilemmas as Microsoft, in that the only way they can collaborate with the new world is to cannibalise significant chunks of their bloated businesses.  And further down the chain there is a whole ecosystem of smaller traditional marketing, PR and advertising businesses that now really do have to evolve to survive, rather than just paying lip service to the online world.  As this recession bites, it will spark off a vicious circle in traditional advertising. Not only is it tougher to find clients, but the clients that persist are increasingly boring to a vast majority of the audience. Magazine pages filled with irrelevant ads for cars and other un-affordables and TV commercial breaks that are the sole preserve of price comparison sites, Unilever and Nestle. So the media itself gets qualitatively worse and in turn becomes less attractive.  As this happens, talent is downsized from the traditional industry and left looking for something more inspiring to do. So real online marketing based on free culture just sits there quietly in the wings, waiting for the inevitable.

Comments

[Rebecca Caroe]

Rory - you are spot on the money with this post! Thanks James for hosting it.

I work doing biz dev with agencies and it pains me to say that the highest number of unsubscribes I get for my information come from people at big OTL agencies.

However, the bit that I really do not yet understand is why the Direct Marketing tribe are also doing the head-in-sand act.

They are uniquely positioned to take advantage of the person-to-person communication opportunities that are available online, since they understand how direct messaging works - and yet they do not seem to be moving from their historical positioning.

My view is that dinosaurs will die, support those who recognise a change is needed and offer lots of lovely free advice on blogs like this so that those who can read the signs will jump ship and go work for an agency that is alert to the possibilities of conversational marketing.
Rebecca

[Rory MacDonald]

Thanks Rebecca

I agree that some of the talent and skillsets in the DM industry would be well placed to take advantage of this, but the industry as a whole just don't really get it. Lets face it, very few people _really_ get it.

DM is still largely a push media, it is a one to many broadcast mechanism (I'll wait for the flaming on that comment).

As for the dinosaurs I don't think that they will die completely. As with the LT impact of Free Culture in the software market, evolution will leave us with a few big ugly reptiles that you wouldn't want to argue with. But there will also be plenty of people, in the crowd that moved on, wearing crocodile shoes.

Interesting one I have just read, Stanford and Harvard have both just added "Fighting Open Source" to their B-school curriculum. Lessons in how to turn your successful company into an attractive handbag?

[Rebecca Caroe]

I presume that Harvard also has Jonathan Schwartz, the Sun CEO's correspondence with the Securities and Exchange Commission via his blog on their must-read list!

Rebecca CAroe