“The next 5 years will hold more change for the advertising industry than the previous 50 did” – IBM report
“The U.S. television advertising upfronts are not likely to exist more than another few years” – IBM report
In my last conversation with my one of my ex-colleague regarding the changing face of advertising in the world; the points he brought forward were in favor of traditional ad-agency in Asia and why internet does not pose a challenge to it
- Digital age is the next age for sure, however considering digital penetration and illiteracy landscape this is not something we should be worried about as of now
- Internet & interactive advertising is not a key item on clients’ list and thus I don’t see huge spends coming on that way
And in my opinion most of the companies are still blindfolded by the aforementioned facts especially in Asia & Africa.
Here is why i think aforementioned points are redundant
- Internet penetration; internet is no longer dependant on telephone lines (modems), PCs and computer literacy. Internet is accessible through mobile phones and one in two humans carry a cell-phone . The growth of cell phones in developing countries is exponential 8% CAGR of mobile phones in Asia while Africa as well is exhibiting promising growth
- Illiteracy; we are here not talking about computer literacy we are talking about the ability to read and write. The challenge is more difficult one to cater, but then again I can recall a research study that we conducted in Pakistan in which we successfully left a self-completed diary with illiterate audience. All it had was icons and yes a verbal briefing before we left that. So the emergence of voice and video communication will definately decrease the consumption barriers
- 80/20 rule: now the most important fact of all, 80% of the marketing activities are usually targeted to the upper SECs and they don’t have the aforementioned problems.
What does this mean for advertising in developing countries?
– Increasing empowered consumer, international pressure of diversifying media budgets especially by MNCs and the limited role of linear TV will force advertising industry world over to change into a new model.
- Question: Will advertisers still need a traditional agency? If so, in what capacity?
- How ready ad agencies are to manage this change?
– Is there a possibility for consumer generated adverts? A place where we give them complete control. Where we either entice or challenge them to bring in a influence as many people as they can?
– As of now, TV secures a huge space in industry ad-spends, and agency’s fee structure (the traditional 15% formula) suits that model, how will agency remuneration will change in the emerging landscape. Will it make economic sense for agencies?
In recent years advertising has witnessed a phenomenal growth but unfortunately the size itself will prevent agility and change management in ad-agencies.
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