In the 1950s/60s, there were only really two or three channels that sold media space and that included newspaper, radio, outdoor and TV. By the end of the 20th century, the rate of media market fragmentation was skyrocketing.
The divergence of radio and TV, as well as the introduction of the internet which offered many more niche opportunities. These areas were gaps in traditional agencies and so spurred the creation of separate media agencies who tackled the changing technology landscape. Over the last 20 years though, there has been an explosion in tech with the emergence of SVOD, VR, AR, social media channels etc. In fact, according to WARC, the biggest driver of grown within digital advertising is mobile with the UK having a smartphone penetration of over 80%. There is also a new blur between offline and online media as everything that used to be/still is print is becoming digitalised but this is usually simplified with media packages that include a mix of paid, earned and owned media.
Industry changes have not only made the landscape more complex in terms of media but also affected the agency models. There has been a shift from management consultancies into the traditional agency domain. This has been evident in the merger and acquisition of smaller agencies by larger consultancies, such as Capgemini, but also large agencies, like WPP and Omnicom, investing into business consultancy to compete. Companies now understand that to give clients the full customer experience and retain them, they require all the tentacles which over multiple disciplines. The knowledge and understanding of all of media’s complexity and the evolution of programmatic buying/selling, provides unparalleled opportunity. The digital bidding system highlights the complex ecosystem that has developed with an ad being served in about 0.1 seconds but requiring multiple actions and decisions.
Using the power of digital data, a brand can target relevant audiences and deliver more valuable content which is beneficial for the campaign as well as for the user. Andy Gillham mused that “last year we collected one billion rows of data a week, now one billion rows a day”. However, there is concern that integration of all these channels are not yet effective enough and negatively impacting business metrics. In contrast, if used well with a strong strategy foundation and clear objectives, campaigns can excel expectations and increase their ROMI such as the John Lewis Christmas ads. In the right hands, correctly analysed data can allow for the right message to be shown to the right user at the right time and place – “the holy grail of marketing” (IPA report 2014).
Another point to consider about the effects of the digital transformation is the grown of advertising expenditure. The channels that have really flourished include DOOH and digital audio such as podcasts, live streaming of music etc. 90% of Google’s revenue comes from advertising which really shows just how powerful advertising as funding can be. There is also more spending invested into evaluating data and obtaining insight for future campaigns/improve current campaigns. This large-scale collection of data forms a positive feedback loop as data creates applications and vice versa.
All this recent change within media and rapid development of digital channels has resulted in many dynamic and unpredictable changes in the world of advertising. There has been an increase in the number of touchpoints and large amounts of accessible data to analyse to understand consumer behaviour better. However, the balance between using all these channels and keeping the campaign effective is fragile and requires expertise from all agencies involved.