Advertising trends on industry horizon and business models

The new global power structure, the planet’s changing environment, the new economy, the aging of the baby boomers and the growing role of women in society are just some of the factors that advertising, marketing, public relations and branding must adjust to, even in the near future. Three of the industry’s best known futurists have offered a variety of ways the industry will, or at least should, change. Here are some of those ways.

Michael Richarme of Decision Analyst Inc.

Michael Richarme, a senior vice president for Decision Analyst Inc. of Arlington, Texas, offered these insights in the World Future Society’s Futurist Magazine:

Youth will rule as the “Echo Boomers,” a generation accustomed to instant gratification, replace the aging Baby Boomers in the workplace. They will bring more focus on health, holistic medical practices and “the exploration of health and relaxation techniques from around the world.”
The rise of groups “bound by shared interests” more than by geography will pressure marketers to tailor their messages and products to more virtual communities.
Branding will become more crucial as more societies increase their income and “global purchasing becomes the norm.”

An Explosion of Screen-Based Media

Ben Hourahine, the Leo Burnett futurist in London, produced a video in which he listed eight things that advertisers, and their agencies, should “look out for” in the future. Here are some of his observations:

There will be “an explosion of screen-based media,” with more television and video available on buses, gas stations, in supermarkets and homes.
Social networks are moving away from their games and getting “back into real life.” Hourahine says they are already beginning to “dictate everyday life”
Privacy concerns will be “a defining issue” in the future.
More advertising and marketing campaigns will be aimed at women in the marketplace and men in the homes.
Brands will take on more of a “guardian” role as families become more concerned about health and safety.

That just means more pressure on traditional ad media as reports circulate that Wal-Mart has “encouraged” suppliers to advertise on its in-store video or risk losing shelf space.

Matt Dickman of Fleishman-Hillard

Matt Dickman, the techno marketer and blogger now with Fleishman-Hillard in Cleveland, provides more direct advice than most futurists. He believes that “the foundation for tomorrow is here today,” pointing out that we already have much of the marketing technology that we will use in the future.

Like most futurists, he is a a great believer in social media. However, he warns that one “should not go there” unless he or she is willing to spend a couple of hours per day monitoring and writing social media. Some of his other observations on future marketing:

Borrowing a phrase from the Crispin Porter + Bogusky agency, Dickman says the best idea, regardless of where it originates, should be “boss” in marketing.
“Emotion is key to marketing” and advertising is best at emotion.
Decide on strategy first, not media. “Allow your content to be easily shared,” he added.
Content should be considered king in advertising and it should be designed to create value for the customer.

Ad Agency Business Models

New technology and the new economy are creating turmoil in advertising, challenging ad agencies to rethink the way they do business. Some industry observers predict agencies will disappear. Others say the new economy and technology will provide greater opportunities for agencies to grow and prosper.

In April 2008, Stefan Poaster wrote that its time “to officially bury the term ‘ad agency’ in favor of advertising “networks,” which he identified as “a conglomeration of marketing services companies.”´ Poaster, the chairman of Euro RSCG Chicago, said half of his own network “doesn’t even make, buy or sell anything like ads.” To illustrate, he said one of them creates and sells lists.

Gavin Heaton, the noted Australian ad blogger, was more pessimistic. He wrote: “The art of advertising is dying in our hands, and along with it, the business models around which agencies have flourished.”

Agencies Must Compete with Media

One real challenge that agencies face is competition from media. Jack Neff reported in AdAge in November 2008 that Proctor & Gamble, Johnson & Johnson, Kimberly-Clark Corp., Clorox Co., Hewlett-Packard and Verizon have called upon media to serve as “co-creators of programs” to reach consumers. “They sometimes bypass their usual media and creative agencies in the process.”

Becky Saeger, chief marketing officer for Charles Schwab added that “if I were an agency, I would be really worried about being disintermediated,” a financial industry term meaning eliminate the middle man. More worrisome, Saeger said: “More and more, agencies are almost in the way sometimes.”

Earlier in 2008, Brian Reich, of Echo Ditto in Washington, D.C., argued in an AdAge video that “marketers as well as consumers would be better served if TV networks took over the full functions of advertising agencies.”

Gary Elliot, vice president for corporate marketing at Hewlett-Packard said in 2008 that HP wants to work directly with some media companies “because they have relationships with customers and can build that quickly and immediately and give us feedback.”

Despite all that, Neff said “there doesn’t seem to be any real danger, at least at P&G, that media companies will supplant ad agencies.” It’s more likely media companies will handle agency functions on occasion, he said.

Advertising vs. Public Relations

In the new economy and culture spawned by the 21st Century recession, public relations presents a serious challenge to ad agencies without strong PR departments. The rise of cauism, social media, digital media and authentic marketing have given PR new value. In her examination of new social trends, Sheryl Swanson of toniq.com said cause marketing “will move from niche status to a more central place in brand communications,” replacing consumerism.

Strategic Partners With Advertisers

Companies must open “a sincere dialogue with customers, inviting them into the innovation process and treating them as meaningful contributors,” Swanson wrote. That means more PR. Observers say that to survive, agencies must serve as “strategic partners” in helping advertisers to promote that dialogue.

Agencies in the future must “provide high-level strategic guidance that clients need in a media-chaotic environment,” said Sean Carton of ClickZ.com, a digital marketing website.

In January 2008, David Kershaw wrote in Creative Choices, a British website, that it was premature to announce the death of ad agencies. He said the growing complexity of the new media will increase the need for agencies that can handle the media planning, buying and creative challenges of the future.