Predicting the future is fraught with problems. At best, one can look at shape of things to come based on the present. However, if the present is itself going through a rapid churn and transition then the task is even more difficult. Advertising as we knew it for the last half century is no more.

I spoke to practitioners of advertising, advertisers and a well known trend spotter to arrive at some understanding of – What Should Advertising Look like in 2020 and what are we doing to get there.

Disruption; Technology

The ubiquitous internet has disrupted our lives in the last decade. While it spurred globalisation to promise us a more prosperous flat world, it was instrumental in the death of companies and entire industries that include publishing, retail, photo films, music and the list will go on into the future. Further, if companies are not watchful they could be part of the graveyard. This virtual omnipresent, omniscient and omnipotent force has now arrived in Advertisingville rendering the traditional broadcast model of paid advertising that has been at best interruptive and based on one way communication to a supposedly passive consumer, dead. Internet is not a channel but is polymorphic adapting to different devices from PCs, to Smartphones, iPads, tablets and so on. Its inexorable growth is best seen in Social Media (SoMe) in a pithy summing up by Friedman – “The world has gone from connected to hyper-connected…six years ago, Facebook didn’t exist, Twitter was a sound, the cloud was still the sky, 4G was a parking place out there, applications were what you sent to Yale and for most people Skype was a typo.”

The web has empowered the so called passive consumer; she has access to entertainment, information and can have conversations with her circle of influencers, and brands and companies – and all this 24×7, all 365 days of the year. Technology has changed the way media is consumed; advertising messages can be zapped, brands ignored, rejected or befriended or better still recommended to community. Consumer advocacy is a bonus for brands but the flip side is dissatisfaction aired on the internet and SoMe. Big companies are sensitive to disgruntled minority voices which can occupy a large share of consumer mind space damaging companies and brands in the process.

The Way Forward For Brands

Increasing globalisation means that the term decoupling does not apply anymore to any nation or region. Financial crises leading to austerity measures, recession and unemployment among other things, has led to what the Futures Company calls the ‘Enraged Consumer’ demanding corporations to engage in solving some of these problems.

So how do brands need to respond;

  • ‘What does your brand think’ – It is becoming clear that brands need to go beyond just ‘selling’ the product to purpose based conversations. They need to have a point of view and a set of values and beliefs that they espouse. This calls for a shift from building a campaign to starting a movement such as Dove’s ‘Real Beauty’ or Mark & Spencer’s ‘Look Behind the Label’ campaign highlighting ethical sourcing and manufacturing of their products earning the company the distinction of being the most responsible retailer.
  • ‘Engagement’ the Holy Grail – Consumers do not want to have just simple sales transactions with brands anymore – they want to be more than superficially engaged. Since technology allows skipping advertising altogether, brands need consumer engagement resulting in consumers seeking out particular brands. Brand advertising must be a trifecta of information, entertainment and interaction says Marian Salzman. Brands can no longer dump messages – they need consumers to seek them out. And this offers opportunities at different levels;

– This is easier for brands such as Foursquare offering a utilitarian experience such as

local services in the area you are in

– For low involvement, low unit value category such as detergents and toothpastes,

there is a need to go beyond the benefit to a higher order need, for example Persil’s Dirt is Good campaign leads to consumer engagement on good parenting and Coke focuses on sustainability for the good of the environment.

– Some FMCG brands are associating with ‘engaging’ content such as Downton Abbey that is so much part of on and offline conversations which makes live viewing a must.

  • ‘‘Brands a la News Rooms’ – The 24×7 media consumption behaviour of consumers is driving brands to mimic news rooms in the quest for the Holy Grail of round the clock engagement. As advertising goes from Paid only media model to Paid-Owned-Earned-Media (POEM) – Paid as in traditional media, Owned as in websites and Earned as in consumer advocacy in Social Media, an engaged consumer is worth more a single purchase as they tweet and influence community and friends resulting in big gains by way of virtually free Earned media – think Old Spice campaign- The Man your man could smell like. Advertisers must watch out that brands are not reduced to performing puppies as they hope for their next ad to go viral on the internet.

New Models- Not enough WIP

Not enough WORK IN PROGRESS. A ten year old today will become the mainstream consumer in ten years time – a tech cognoscenti and SoMe denizen. Already, technology has disrupted the traditional advertising model of Awareness- Interest-Desire-Action. Consider this – next time I get on to Facebook, my friends share Zaggora slimming track pants and persuade me to buy them online instantly. Next time I ask the bartender about the music playing in the bar, he introduces me to the Shazam app that tags music and videos for me. I sit glued to the TV set watching the closing ceremony Olympics 2012. My Facebook friends are a combination of newsroom, mall, directory and encyclopaedia on infotainment. I am now finding it difficult to separate my cognitive and affective responses.

Despite such media disaggregation, and changing media consumption no one really believes that traditional media is dead – though TV might be viewed on the web or web browsing may just be a means for figuring out what to watch on TV. Offline and online activity seems natural and seamless to consumers and marketers will need to go with that rather than see them as distinct.

Marketers believe that brand building still relies on awareness, trial, repeat purchase and loyalty but the challenge is doing this when long drawn marketing plans will not stand up to the immediacy, fickle and fleeting nature of the internet which demands instant response.

Fast forwarding to 2020

Scenario in 2020 will be ramping up of technology with 80% of the world online and advertising targeted at individuals rather than ‘segments and cohorts’. Interactive Advertising Bureau, in a new study reports that over $500bn of US GDP is attributable to the internet ‘ecosystem supported by advertising’. That is good news for marketers. The big change coming is individual customisation of the message from a brand; today there is data available with the Big 5 – Google, Twitter, Amazon, Facebook and Apple related to an individual’s interests, purchase and social behaviour. Chances are that the ads for a brand that you and I will see on our ipads will not be the same. 2020 will see better mining of data and insights and delivering to consumers only what is relevant and interesting to her.

D&E markets are embracing change even faster as smartphones and tablets multiply.

There are some big challenges going forward –

  • With open source innovation and ‘crowd sourcing’ in every sphere, technology is democratising content and distribution. Advertising agencies run the risk of becoming middlemen whose skills are available virtually free on the web – from buying media, creating content, R&D and consumer feedback. Can the internet render them irrelevant?
    • Mobile is perhaps the biggest challenge; returns on marketing spends are low whencompared with the penetration and time spent on the medium. Disruptive and intrusive models of advertising don’t lend themselves to this medium as it stands now. Will tablets and bigger screens with ‘native ads’ (native advertising is defined as ad strategies that allow brands to integrate their content with the experience of a site in a non-interruptive way) change the fortunes of this medium?
  • In addition, metrics for measuring ROI on SoMe and the internet are not yet worked out. This, however, has not stopped companies from spending on advertising in the new media primarily because it is still relatively inexpensive. Will we have better metrics by 2020?
  • Both marketers and advertising agencies are investing in technology, skills and capabilities alongside building partnerships with the Big 5. However, it is not going to be a straight and narrow path with Google offering search and display advertising while offering marketers inexpensive automated tools to buy media and create content. How will the big bets pay off?
  • There are a whole host of issues regarding privacy and security on the web. With consumers having several accounts for transactions online and bank payments there is greater onus on companies to safeguard the data. FT reports that nearly 20m items of personal data were traded illegally over the internet in the first half of this year and that amount of illegal data will quadruple from 2010 by end 2012. Will these issues get sorted out across the globe?

So for now, there are more questions and challenges than there are answers. As always, however, uncharted territories offer opportunities and possibilities.

People interviewed –

Salman Amin – Chief Marketing Officer, Pepsico; Arun Adhikari – Senior Vice President, Laundry Category, Unilever PLC; Colvyn Harris – CEO, JWT India; Asit Mehra – Executive Vice President, Omnicom Group Inc.; Steve Miles – Global SVP, Dove, Unilever PLC; Babs Rangaiah – Vice President Global Media Innovation, Unilever PLC; Marian Salzman – CEO, Havas PR, North America; Tony Wright – Worldwide Chairman, Lowe and Partners

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