Disruptions in Advertising

Do you know why Procter and Gamble (P&G) is regarded as a hugely influential marketing organization? With an annual budget of over $4 billion, the Cincinnati giant is the biggest advertiser in the world (The Economist June 6, 2004). I do not struggle with this statistic considering the fact that America represents about half the world advertising market.
However, Lord Leverhulme, the British soap pioneer, Frank Woolworth, America’s first discount retailer and John Wanamaker, department store magnate are commonly remembered for their conviction that half of their advertising was wasted, but did not exactly know which half.
The question is: ‘which half of advertising actually works?” While some industry pundits believe that the “wasted half” is not 50 percent but 80 (Dave Morgan 2004), the American advertising industry’s research authorities say the figure has been narrowed down to about 20 percent.
Despite the low percentage the Advertising Research Federation (ARF) concludes that about $50 billion in U.S ad spending is wasted! The Federation’s Bob Barocci is of the opinion that advertising spending has shrunk to a mere 12 percent of marketing spending. A recent study done by U.S marketing-services consulting, Yankelovich Partners, submits that consumer resistance to traditional advertising’s intrusiveness has peaked. The study discovered that 65% of people believe they are “constantly bombarded” by ad messages, while 59% feel that ads have minimal relevance to them.
In another report by, Deutsche bank, it is posited that consumers are increasingly becoming more difficult to influence as a result of the commercial clutter. Meanwhile commercial time and space is becoming infinitely expensive and markets are growing more competitive and fragmented.
Marketers, long frustrated by their inability to know which half of their ad spending is wasted, are now coming up with new ways to reach consumers as effectively as they have for several years with TV.Ours is now a brave, new world, replete with alternatives to straightforward advertising. P&G recently embraced channel planning which is about putting media or communications planning at the front end of one’s campaign creation. The organization realizes that the first step in any marketing programme is to understand one’s consumers and how they might be reached rather than what might be said to them.
Channel planning is about trimming traditional media ad budgets and spending more on other marketing activities. Other world’s leading marketers who have made channel planning the cornerstone of their campaign creation include Unilever, Nestle, Kraft and Diageo.
There are new trends in advertising globally and opportunities abound for those whom utilize them. Harvard Business School professor Clayton Christensen is believed to have coined the term “disruptive technology” in his book The Innovator’s Dilemma (Tim Porter 2004). Disruptive technology describes a nascent mechanism that ultimately replaces or renders an existing industry obsolete. According to Peter Krasilovsky, an analyst with Borrel Associates, most U.S TV and newspaper companies do not have an idea of who their user base is or the demographics. The media landscape is in the throes of a paradigm shift powered by open, broadband, always-on, multimedia publishing, low-cost digital production and distribution, and audiences who are in control of their attention. Meanwhile such audiences can be registered and utilized for a gateway into the paid content world. Leon Orsmond, a creative disruptor with Osmosis, an ideas company based in South Africa credits Jean-Marie Dru of TBWA-Paris for creating the word “disruption” in marketing communications. Dru describes the concept as discovering “the strategic idea that breaks and overturns convention in the marketplace and then makes it possible to reach a new vision.”
When General Motors desperate to get attention for its unheralded new Pontiac G6 decided to approach Oprah Winfrey to feature the car on her Favourite Things” show, little did it know that it would be giving 276 cars worth $7 million away to every member of the studio audience! This act of course gave General Motors what it sought- a blockbuster debut. What else could qualify as disruption? The automobile market in America is alarmingly fragmenting into an array of 324 models while in 2004 alone it would have introduced a record 66 new models.
Marketers like Sony Music, Unilever, and Nintendo alongside major liquor companies and TV networks are routinely buying space on the doors of toilet stalls and urinary walls. When Unilever launched its Axe deodorant, it swiftly accompanied with bathroom ads in 10 U.S markets. According to David Rubin, senior brand development manager with the company, Axe is a social brand which helps men between 18 and 25 years of age to attract women. The bar is therefore right.
Rubin is supported by David Turner of the Indoor Billboard Advertising Association founded in 1998, who says “in a restaurant, 75% of the patrons use the restrooms. In a bar or a night club the average patron uses a restroom almost three times per stay.” (Lisa Sandlers 2004). A major media revolution happened in America in 2003 as discovered by Veronis Suhler Stevenson’s annual communications industry forecast. U.S consumers had spent $178.4 billion on movies, recorded music, cable TV, websites, video games, etc. compared with $175.8 billion in U.S ad spending for the same year.
For Scott Donaton, Editor of Advertising Age, these figures clearly show that communications spending by end-users surpassed ad spending for the first time in American history. What lessons for the rest of the world? Media companies whose survival depends on advertising revenue are expected to heave a sigh of relief; advertisers’ share of programming and production costs should reduce; marketers who influence media content as a result of their financial muscles should note that control is shifting from content creators and distributors to consumers.
When P&G launched a non-prescription version of Prilosec, an anti-heart burn medicine in 2003, it was considered one of the most successful launches in the company’s history. However, only one quarter of the marketing spend on Prilosec went to traditional advertising. The rest was spent on other forms of marketing such as in-store promotions (The Economist).
Nintendo achieved one of its most successful game launches in 2001 when it introduced Conker, a top-selling mature-rated game for all systems. It is interesting that its media campaign included urinal mats, printed with the Conker website situated in men’s bathrooms for many months in major urban markets. Creating brand awareness online is part of South Africa’s effort to catch up with the rest of the world; online promotion, which includes paid search, search engine optimization and affiliate marketing, disrupts the one-way communication through the mass media. South Africans, according to Christine Sander (biz-community 2004) pride themselves for being host to many global brands which turn to their country’s few search marketing companies to help build their brands online.
People are no longer fooled by traditional advertising; it is therefore not surprising that wise marketers are breaking free of market conventions. In the land of disruptions marketing communications industries cannot afford to sit on the sidelines of a great revolution. Advertising will have to be radical, not following the norms of either brand building or product advantage. For Osmond, innovative thinking about brands should be introduced ever before the creative work is conceived while advertising cannot be the primary medium! I cannot but agree with him that real change can only come through total discontinuity.
It is believed that music, sports, reality TV, movies, holidays, MTV and community, which advertising is supposed to compete with are much more exciting! Can we stop our usual boring, safe, bland and formulaic advertising campaigns which are not really producing effective results?