The transition to mobile continues at a relentless pace. We've seen signs of how massive that shift can be and of what may be coming. Now we have another huge milestone. Adidas the sporting brand has just declared that they will end TV advertising and the primary reason is mobile. Their target audience is glued to smartphone screens and if you want to reach that audience, you have to go with that media.
At first it was merely the argument of 'can we do the internet on mobile' and would anyone bother to do so. Earliest mobile internet experiences were slow and clumsy on tiny screens, slow networks, WAP services, no touch screens and no color. But it was a start and then we've seen the evolution where today only 200 million people are left who never use a mobile phone to access the internet - 3.3 Billion out of 3.5 Billion internet users do use mobile, and 1.8 Billion, just over half, never use a PC or tablet of any kind to access the internet.
So next came the idea of 'mobile first'. That if the majority of users were actually accessing the internet on a mobile phone, rather than a PC, then it makes sense also to 'mobile optimize' the internet experience. And as that started to happen, we heard of some countries where the media itself was living in a 'mobile first' mentality, like China, India etc. A deeper mobile commitment was 'mobile always' which Ford first claimed 5 years ago, that they would no longer do any ad campaigns in any other media, that did not include a mobile element. So they will run mobile alongside TV or radio or print or outdoor ads (or internet/web/social media ad campaigns). And mobile becomes now the 'central' vital must-have element. But that step is not yet the 'end' to the legacy media.
So now we arrive to the point of 'mobile only'. Adidas is our first 'Canary in the Coal Mine'. This is like we saw with mobile payments before, where in Estonia you could not use cash to pay for parking (but could use mobile) or in Sweden you could not pay your bus fare by cash (but could use mobile to pay). And last summer we had the news from Malaysia that Air Asia had stopped using human check-in counters for airline boarding passes (but you could do it with your mobile of course).
Mobile continues its relentless conquest of the world. We already can do driver's licences on the mobile phone as they did in Dubai. We can vote by mobile phones as they do in Estonia. The wallet is going mobile from Japan to Kenya to Turkey to the USA. And now, TV is under assault. A major global TV advertiser says they will no more do TV ads, but will do mobile ads of course. Yes mobile is taking over the world.
And if you need all the stats and facts about mobile, check out the 217 page ebook TomiAhonen Almanac 2017 where there are over 100 charts and tables to tell you all about mobile numbers, facts, statistics and case studies. See more here.
This made the newspapers in the Netherlands. albeit on an inside page:
http://www.volkskrant.nl/economie/adidas-zoekt-jonge-doelgroep-op-sociale-media~a4475920/
Adapted Google Translate:
Adidas is looking for young audience on social media
Advertisers stop TV advertising
The young customers of the large German manufacturer of sports equipment do not watch much TV, so advertisers are looking for them on social media. It seems part of a trend with serious implications for traditional media.
Posted by: Winter | March 20, 2017 at 07:59 AM
Hi Wayne and Winter
Yeah it is a logical step on a tech evolution path. If we look back, at some point the telegraph and fax for example went through this same type of evolution, where at one point major corporations had telegraph offices in their major office buildings and then at some point shifted away from even using a telegraph anymore; and faxes we can remember the time when a good office setup included a fax machine and gosh, for me the last time I sent a fax was in the previous decade when some I think law office needed some signature faxed to them haha...
I honestly do not foresee the end of TV as such (will not go the way of the Zeppelin or steam engines like in travel) but if TV starts to see such erosion where some brands not just shift their ad dollars to digital media and REDUCE their TV expenditure, and then some major brands STOP altogether TV ad spend, that is a huge shock to the TV industry and will mean -- cost savings, belt-tightening, lower ad rates to retain customers, cut staff, cut expenses, pay less for sports rights, fire more staff, pay less for TV programs, actors, directors, tech crew, it means even less local/own production, more purchased mass entertainment prodcuts like the major reality TV shows, and so forth...
It means the golden age of TV will have ended or is about to end. Assuming Adidas is not the only one who did this but is the 'Canary in the coal mine' who dies first. And if this now signals the start of even a modest trend away from TV, that would mean we had witnessed (or are just now witnessing) 'Peak TV' as a mass media transition moment.
It is interesting times and we have to see what else we hear from the 5th Mass Media haha..
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | March 20, 2017 at 08:21 AM
@wayne
> Sports is the main "keep people paying for cable" anchors
It is almost funny how you wrong you are! I guess that is your personal reason! See: "Sports are no savior to big cable bundles, survey says -- Sports are often seen as the linchpin keeping people in pricey cable packages, but a recent survey found most subscribers don't need games to keep paying for TV. Plus, many sports fans would pony up for streaming."
https://www.cnet.com/news/sports-arent-the-savior-of-big-cable-bundles-survey-says/
Posted by: b | March 21, 2017 at 10:07 AM
Hi b and Wayne
b - welcome to the blog.
Both - yeah, its a bit of this and a bit of that. I agree with you Wayne that its shocking specifically for a sports brand but on the other hand, for me it is not shocking its a youth-oriented brand. Say a Pepsodent type of brand would perhaps be more shocking.
b - I understand what you mean and for many cable TV viewers that is indeed true, but I would side with Wayne on this. Even so, then the 'last vestige' of the reasons to subscribe to cable TV is for very many sports fans, the sports coverage. Obviously only part of TV viewers are of the type of sports fan who would even care (some people dont' watch any sports). For me personally it was Formula 1 racing which was the last bit that kept me on a cable TV subscription when all other reasons to bother to pay for cable TV had already ended for me. So in that way, while it will not 'save' cable and is not the 'universal' reason, it is probably the single biggest reason that actually drives premium cable TV payments - live sports. And that then will be of course regional depending on what are the local passionate sports from say US baseball to European football/soccer to say India and cricket or say Canada and ice hockey etc...
Tomi Ahonen :-)
Posted by: Tomi T Ahonen | March 21, 2017 at 02:20 PM
Well, just by sponsoring major teams like Real Madrid and Barcelona big brands like Nike and Adidas have worldwide exposure both on TV and the Internet. Maybe they will advertise on TV again if clubs start to ask for higher fees.
It'll be more evident when second and third-tier brands follow path.
Anyway this is indeed big as it would had been unthought of three years ago.
Posted by: grogxd | March 21, 2017 at 11:02 PM
@Wayne Brady:
"That there is a DEMAND for paid streaming, doesn't mean there is a SUPPLY for it. All the current paid streaming deals specifically exclude your local market's teams. We pay for MLB streaming so that our daughter can watch our local team while in college. My wife and I can't stream those games. We can watch ANY OTHER game, but the one we are most likely to want to watch."
And for how long can they keep it up? That's a classic case of ignoring the customer's needs when designing a product. In the end it artificially extends the lifetime of an undesirable product and sooner or later the time will come that the tie is broken and someone floods the gap. And then it's goodbye to those who ignored realities.
As for TV advertisement, I cannot say it surprises me that it's the most affluent and most desirable customers that get lost. They get their entertainment through other channels that are most likely less ad infested. What's left are older people and children, and not surprisingly these are the groups that are most heavily targeted by TV ads here in Germany.
Of course I still watch TV, but I rarely watch classic TV stations, most of what I do is streaming or downloads, because it allows me to watch stuff when I want, not when some TV executive thinks is best.
Overall, though, I wouldn't blame mobile here. The TV developments are to a large part independent of that and the writing had been on the wall for years that classic TV is on its slow way out as it poorly syncs with today's technical capabilities of content delivery - it's just that mobile is the best alternative to reach the intended target.
Posted by: Tester | March 22, 2017 at 01:26 PM
@Wayne:
It's strange that others are repeating the same mistakes as the music industry.
The best example is eBooks. The publishers are so scared of piracy that the copy protection they demand gave Amazon a quasi-monopoly on eBooks, because they were the only ones who had enough resources to create hardware that was tailored to their services.
And people happily continue to pirate eBooks, because most have no interest in paying almost print price for such heavily usage restricted items.
Posted by: Tester | March 22, 2017 at 01:57 PM
@Tester
"The publishers are so scared of piracy ..."
You see this in industries where the main intermediates are afraid of being disintermediated. It is not priacy that they are afraid of, it is self-publishing that they fear. Anti-piracy policies, e.g., DRM, are aimed at making self-publishing harder. In the end, the Amazons and iTunes take over anyway.
Posted by: Winter | March 23, 2017 at 12:49 PM
@Tester
Ads are not target at the affluent but the young. They are the people who change brands.
Posted by: ch | March 30, 2017 at 04:41 AM