I'm sure I'm nowhere near the first to remark on this, but it has recently hit me on several levels. CNN just reported a moment ago that American newspapers are in severe trouble, partly because of the economic downturn yes, which means less people buy newspapers, but also less advertisers have budgets to advertise. And it is accelerated now by the trend to getting news online.
I am reminded of a colleague who said that their company buys no printed books anymore for the corporate library, as a policy. The do buy electronic editions. They do this partly so they can better electronically monitor what resources are used by their staff. Interesting.
I met up with a colleague who is having some economic troubles now with his business - and who isn't these days - and he said he has stopped reading his fave newsmagazine and goes online instead. He's an older person like me, and this seems to be the moment that finally got his consumption to shift from print to online. I'm sure these three anecdotes replicate across the planet.
I am sure these are all symptoms of two effects that are colluding to accelerate the effect. Even before the economic downturn last year, there was a clear trend from the five legacy mass media (print, recordings, cinema, radio and TV) to the two new digital and interactive mass media (the internet and mobile). We have regularly reported on the facts and observations along that journey, here at Communties Dominate blogs for four years now. But the economic downturn has suddenly accelerated that shift. Why?
CONSUMERS ARE VOTING WITH THEIR DOLLARS
It makes economic sense, and I mean economic as "rational man" as it was originally suggested, that the person who makes sound rational choices. If we have media choices, and we - as consumers - have limits on our resources, such as our time, we pick the on for us which is most efficient. The two digital interactive mass media offer us gains beyond the first five legacy mass media. There is speed, news breaks faster on Twitter or the blogosphere than mainstream press and 24 hour news channels. There is breadth of coverage, we have far more choices of specialized news and commentary on the web (and increasingly also mobile) than we had on the old mass media. There is access to media that have limits of geography. If that newspaper is not sold in this country, you can access their website via the internet etc. The British print newspaper the Guardian, has a larger readership out of America on its online edition than its audience in Britain. And for the most part, in particular on the internet there are significant cost savings to users. Most content online is free, and now as advertising is strongly migrating to mobile, there are also increasingly many free services and content on mobile. See Blyk for a perfect example.
That all is fine and well. But now, the economic downturn. Yes, it will even more push the consumer to seek online and mobile variants to their consumption. If the cable TV premium channel package seems excessively expensive today, and your fave show was the Daily Show on the cable channel Comedy Central, and now you notice Daily Show airs full episodes also online - and if you already have broadband at home - why not watch the Daily Show online, and cut the cost of the premium cable TV package. Make some savings. So yes, on the consumer side there is a clear cost savings element.
BRANDS WANT EFFICIENCY
But on the corporate sponsoring and advertising and purchasing side, there is a far bigger impact to the various mass media due to cost-cuts that will focus on the efficiency of an advertising channel. In good times, there is no alarm, no panic decisions to make drastic changes. No reason to make the tough choices. But in times of crisis, when you really have to make decisions on who is going to be fired so the company stays alive, suddenly the choices of a wide advertising campaign, to use all channels, is an easy early target.
Then we get the sudden argument inhouse. Wait a moment. What is the purpose of advertising? In troubled economic times, it is even more important to have advertising drive sales and direct action by the consumers; not just do brand advertising to build name recognition. And now, the true powers of interactive advertising - and even more than that, engagement marketing - become blatantly obvious. Yes, its cool and sexy and glamorous to do a TV ad campaign with the supermodel or movie star or sports celebrity shot at some exotic location by the new young hot director and hope to win the big adverising award next year.
But if the MMS mobile campaign costs one tenth of the campaign, and the MMS campaign delivered a measurable 30% response rate - even 30% conversion rate as we reported here of the magnificent BMW campaign out of Germany last year. Suddenly the internet and mobile campaigns are the way to go.
And then its not the banner ads and spam that was the early online advertising. Now it is Google search words on the internet. Its real engagement campaigns on mobile. Advergaming. Etc. And the advertising budgets get slashed overall, but the hit comes almost exclusively on the broadcast and print mass media, and the internet and mobile advertising often is the beneficiary, actually seeing an increase.
So first, this trend was clearly visible in all five legacy mass media shifting to the two new digital interactive mass media, this whole decade. TV viewers go to YouTube, the daily entertainment is more with friends at Facebook than watching the soap operas,and audiences now fight in World of Warcraft rather than watch passively a TV cop show. Even more so, news is ever more consumed in the digital media channels. Where there is an audience there is also advertising, so the advertising dollars have been migrating to the sixth and seventh mass media channels year-on-year for this whole decade.
Now the economic downturn accelerates that shift. It also means that the brands advertising will need to re-evaluate rapidly. It means the advertisers need to re-learn very quickly. If the advertiser learns of campaigns that generate 30% measured response rates, and your team delivered a generic banner ad campaign online that gives the customer a 6% response rate, your customer will quickly seek other more proficient experts to support them than you and your team.
Its a rough battle now, in the digital space. And because of online and digital, easily some of the actual work - perhaps even most of it - can be delivered from other countries on other continents. Where is all that online multiplayer gaming programming talent today, if you wanted to create an advergame? You'd probably need to do some of that work out of Asia...
CAN'T AFFORD TO RETRAIN
So the advertising agencies are really being pushed and squeezed now. On the one hand the overall economy is down, which always hits the advertising budgets disproportionately hard. Then there is the loss of lucrative TV work. There is also the loss of many familiar "standard jobs", like magazine print ad campaigns and the radio spots, for which there are good existing processes with the photography studio and the sound recording studio etc.
The customers demand digital interactive campaigns for which the ad agency senior staff is not well trained nor prepared. That often means outsourcing some of the technical work to outsiders at considerable cost. The lack on knowhow means problems with managing the campaigns with overtime and budget overruns and slipping schedules, all creating more costs. And what to do with all that expensive creative talent who are masters at - award-winning even - with the TV ad campaigns etc. The great photographers and copywriters for the print ads etc. How do you turn them into some kind of social media masters capable of creating a loyal fanbase of passionate brand advocates inside Facebook?
And then the "kids" fresh out of university who quote Alan Moore that nobody is as clever as everybody, and who come along, with their silly ideas about Facebook and Twitter and MMS and who want to do weird "engagement marketing" to suddenly create an "advergame" that seems very experimental and these ideas often release alarmingly large amounts of control away from the agency, either to the brand or to the end-users, consumers, audiences (after all, that is the ethos of engagement marketing).
So with suddenly vanishing budgets, the ad agencies face skills shortages and wrongly balanced talent pools. How to get up to speed, to not just deliver great interactive digital campaigns but even more so, how can their senior staff sell this to the billion-dollar brand customers who often have read Communities Dominate Brands or Mobile as 7th of the Mass Media and seem to know the terrain and the vocabulary better than the senior account team often only proficient in how to sell a TV campaign...
MOST ADAPTIVE TO CHANGE
Well, this is darwinism, isn't it. The survival of the fittest. Not the smartest and not the strongest. As Darwin said, the survivors would be those "most adaptive to change". Being the biggest media brand or largest ad agency with the biggest trophy cabinet is not going to save you. Being most adaptive to change is the ONLY way.
It is blatantly obvious that the media landscape is now changing dramatically. The time of TV is coming to an end. Two giants have emerged. The internet has 1.4 billion users, which is nearing the size of the total TV set population. But of the internet, 1 billion users pay for an internet subscription (broadband access or dial-up narrowband access) for 1 billion PCs that are connected to the internet. That compares with 850 million who subscribe to satellite and cable TV. This is a big shift. And it is not just audiences it is our time. On the internet, we spend more of our time and our action.
Meanwhile on mobile the situation is perhaps even worse for the legacy mass media. 4 billion mobile phone subscribers is nearing the global population of FM radio sets in use, but as the radios are predominantly in the Western World, the mobile is by far more widely spread as a media channel than radio already today. 3 billion active users of SMS text messaging and 1.35 billion active users of MMS are the two largest interactive platforms for the planet by users, far larger even than Facebook, MySpace, YouTube and even bigger than email by reach.
Obviously there are four times as many mobile subscriptions as the total number of PCs in use all laptops, desktop and netbooks put together. Last year 1.7 billion people consumed premium data services and content on mobile. And look at just one category, paid news on mobile. The percentage of mobile phone subscribers who consumed paid news services on their mobile phones last year was 17%. A reasonable number, yes, but does not seem alarmingly big. Only one in six mobile phone users. Until we work out the math. Due to the enormous size of mobile this means 680 million people on the planet. That compares with 480 million as the total circulation of all daily newspapers worldwide!
Yes, the paying audience for news on mobile, today is already 42% LARGER than the TOTAL circulation of all newspapers gobally which includes paid newspapers and free dailies. And that is just news as one content category on mobile. Last year 1.5 billion people received advertising on their phones, yes more than the total TV sets on the planet, and not all of those TV sets show paid advertising. Mobile is already the world's biggest ad platform by audience reach.
The changes to the mass media consumption, and the advertising industries are irreversable and accelerating. Some executives will resist change. Others will make superficial adjustments. And yet others will be "most adaptive to change". Darwin tells us it is only those most adaptive to change who will survive.
During normal economic times, there was a "nice to know" element to digital interactive media. Today, this is a "need to know" issue. Everyone needs to commuicate. But in this competiive world, you have to be supremely efficient in delivering your message. And the old methods don't work anymore. Time to think hard, about how do you re-orient your media or advertising company, department, staff, or career. Perhaps this article helped you along the initial step, to recognize there is a grave urgency to this matter.
Now, first about the facts in the above. For anyone who wants to quote this blog story or facts and stats from it, all facts source: Tomi Ahonen Almanac 2009.
Secondly, if you are in the mass media space or a brand looking to cut costs and optimize your marketing and advertising budgets, you should consider the two books I mentioned. This blogsite's signature book is Communities Dominate Brands (that introduced the concept of engagement marketing and is now a textbook on interactive marketing which is educating the young minds of the next genertion of advertising and marketing professionals at many leading universities from America to Australia). This is your handbook to this transition. How will consumers (and audiences) of tomorrow be different, in a facebook and twitter world, than that family that sat together around the TV set to see who shot JR on Dallas.
While the internet and Google and adwords etc are reasonably well understood, mobile is the newest, the seventh mass medium and it is by far the least well understood. That is why I wrote my latest print book, Mobile as 7th of the Mass Media to help you, our reader, to understand mobile as a mass media channel. That the small screen and tiny keypad will not prevent its rise to prominence. That mobile actually has seven unique benefits that even the internet cannot replicate. The brand new book is rising on Amazon and so many readers have said it is useful in that mission to explain why mobile is a different media, like I say, mobile is as different from the internet as TV is different from radio.
And finally, on the specific topic of this blog posting, interactive digital advertising. I am not an expert on how to do interactive on the internet. But I am a leading authority on how to achieve it on mobile. And that is the harder part, the more complex problem and the younger mass media option, with far less global competence. If you personally, or your company is involved in making ads or campaigns, then you really need to read the launch edition of my series of eBooks, Pearls Vol 1: Mobile Advertising that has 50 case studies on the best successes on mobile campaigns around the world, from 19 countries. And best of all, that eBook is formated for the smartphone screen, so you can actually load it onto your iPhone or N97 and carry in your pocket the 50 case examples, just in case your customer (or boss) doesn't like your curren idea, and you need a quick catalog of best ideas to.. "adapt from"... You can sample pages and see several of the cases at this link: Book page Pearls Vol 1.
(PS who says old dogs can't learn new tricks. This old author after four hardcover printed books, became a blogger in 2005 and a podcaster in 2007 and now in 2009 releases eBooks and ones that also work on mobile phones - should we call them m-books?.. But yes, we all need to re-generate to survive. Most adaptive to change,and all that, ha-ha.)