Advertising Sector: Future of Advertising and impact of technology

“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

  1. 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
  2. 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

  1. 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
  2. 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
  3. 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.

 Additional resources:

–          When rural meet digital by JWT India

–          IBM- The end of advertising as we know it

–          8 golden rules for advertising in digital age

 

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2 responses to “Advertising Sector: Future of Advertising and impact of technology

  1. Pingback: Future of Advertising & impact of technology – Part 2 « Consumer Insights with Ayesha Saeed

  2. Pingback: Future of Advertising and impact of technology – Part 3 « Consumer Insights with Ayesha Saeed

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