One industry gets consistently hit in an economic downturn. This being the advertising industry. Except in this downturn, newspapers which were already weak, are being decimated. This includes the likes of the Tribune Cos, the Chicago Sun Times and numerous others. The reason behind their demise is twofold. First, circulation is down, as more potential subscribers turn to alternative sources of news like the Internet. Second, advertising revenue has also dropped off sharply with no sustained recovery in sight. This brings up a third reason, newspapers have been unable to find a sustainable business model for placing their content online.
This got me thinking, what is the problem? As I write in my book, Without Warning, I state that many silent problems (which this one has been for a long time - everyone knew about it, no one wanted to tackle it) suggest that the system is the problem. This certainly appears to be the case when it comes to the co-dependency between the advertising/marketing industries and the media industry. For instance, I came across an article over at FutureLab titled, The Rise and Fall and the Coming Transformation of Madision Avenue. What about the Future of Advertising. The article is insightful. Here are a couple of tidbits worth mentioning.
- The contradictions of 1950s culture were beginning to emerge, and one of them was the inordinate influence advertising and sales appeared to have in our culture. The big shift is they are far less influence in our culture today and technologies have taken over the role.
- …consumers were relatively powerless, even “manipulated” and victimized by advertisers. In these accounts, the powerful and active agents were corporations, not individuals. Today, we can see that this is changing, with an over abundance of almost everything and the growing influences of social networks. Finally, power is switching over to the consumer.
- Power is shifting from mass communication to social interactions. In just a few years, you can expect the whole advertising industry to be in full crisis mode, driven by continuous innovation.
- Big big marketers such as Procter & Gamble, Johnson & Johnson and Unilever are expressing frustration with the way ad and marketing firms are structured. Many marketers say it is tough getting different agencies to understand the new world order
It’s my opinion, the system is broken. The good ole days will not return. And many agencies are facing troubling times ahead. The networks (media) they established, are quickly fading and many are gone. The old order was about control. The new world order is disruptive.
Agencies have depended on traditional news media and vice versa. The value of these relationships are no longer needed, nor valued. As newspaper circulation dwindles and advertising dollars evaporate, the system is exposed to extreme stress. Many agencies will not survive.
