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Home Advertising

Digital evolution, not revolution

by Justin McCarthy
February 18, 2014
in Advertising
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TV’s new TAMS currrency is coming as PVR data is ‘unpaused’
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Having been in the communications industry for 23 years I’ve seen a good few smoke and mirror artists peddling theories they claim will revolutionise marketing. Being naturally sceptical of earth shattering revolutionary claims, I’m suspicious of their zealous magniloquence. The last decade has seen the propulsive rise of social media as one of the drivers of the so-called digital revolution, releasing hordes of pompously self-styled “gurus” upon unsuspecting brand managers. Turns out it’s largely just another fraud perpetuated on the marketing industry in a reprehensibly shameless clamour for differentiation, and a slice of the marketing pie. Legends in their own lunchtime as a departed colleague and friend of mine would say.

My first clash with the forerunners of the digital revolutionaries was with the advent of the internet and the concomitant dotcom boom. Several players in the communications industry hustled their shiny new soapboxes into the limelight claiming the internet would revolutionise everything from commerce to the 30 second television commercial. In fact many pronounced the impending death of the TVC. Many more subsequently have, and not only the TVC but also the entire television medium, including such luminaries as Seth Godin and Bob Garfield. We all know how the dotcom revolution ended.

This new generation of ideologues has beaten the drum of digital media and the death of the interruption advertising model with wild predictions of carnage and tales of century old business models rudely inverted. Customers having “conversations” with brands is a particular ideological mantra. Seriously now, does anyone have a conversation with their brand of deodorant? Their preferred beer brand? Poppycock. There’s even an agency in SA specialising in this new age gobbledegook which has chosen to name their company as such. As the irrepressible Bob Hoffman (Ad Contrarian) puts it, “The idea that Facebook is useful because consumers are having ‘conversations about brands’ is as dead as QR codes. Okay, nothing is as dead as QR codes.”

What the internet has enabled is transparency, and just because people have the ability to moan or praise brands online doesn’t mean they’re having a conversation. It means they have an outlet and a voice that a few of their friends may take an interest in, but is it remotely realistic to think that your 400 Facebook friends give a damn that you got bad service at the burger joint last night? (Besides the fact that only 10 of the 30 you interact regularly with may have even seen your post). If the brand has a decent social media management policy (i.e. a proper PR response strategy) the issue should be quelled and the brand’s reputation defended or even enhanced. That’s about all that social media does for brands – at best it’s a reputation management tool, at worst a reputation wrecking tool.

Global media revenue growth 2012

In the great debate about new media there is one loser and two winners. The loser is the print industry who really did stuff it up by freely dishing out their content, and the winners are Google and television. Yes, television has steadily gained its share of advertising dollar throughout this digital revolution. Google is the only digital player to have made any meaningful impact with its search based algorithmic model. A year ago Facebook abandoned its idealistic holy grail of the permission advertising model and moved into mobile and into serving paid ads using the old interruption model. If you’re a user the sudden surge in promoted posts can’t have escaped your attention or your irritation. This dual shift saw Facebook nearly double its revenues from $4.2 billion in 2012 to $6.9 billion in 2013. This strategic leap is directly responsible for the stock price rising from its all-time low of $22,90 in June 2013 (IPO $38,00) to last Thursday’s high of $67,33. But Facebook’s revenues pale in comparison to Google’s which broke the $50 billion barrier at the end of F2013. Facebook may be the big guy in user numbers, but Google is the gorilla in ad revenues.Global media share of revenue 2012

It might astonish some readers to hear that TV is gaining ad revenue share. In the latest available Nielsen global data, TV grew +4,3% while newspapers declined -0,1% and magazines -1,6%. Internet revenue grew +9,9%, at more than double the rate of TV, but it’s misleading to look at growth rate without a base comparison. TV grew off a whopping 62,8% share of total revenue, while Internet grew off the rather modest base of 1,9% share. When it comes to advertising revenue, TV has grown in dominance every year since the dawn of digital media.

The picture in South Africa is not much different with TV having grown from a base of 35,6% in 2002 to 46,2% share in 2012. During the same decade total print media gave up 13.7% share points while internet ad revenue grew from 0,5% to 2,6% of total share. [All data courtesy of Nielsen]. There are many reasons why internet ad revenues haven’t replaced the revenue given up by newspapers, but that is a subject for another day. Admittedly the reporting of online revenues is notoriously unreliable, and it is thus unquestionably under-read, but even if it were under-reported by 50% the fact remains that it is a highly fragmented, niche channel. It is by no measures a revolution of any kind whatsoever, but like many channels before it, an evolution.

{In my next column I’ll attempt to explain why mass media continues to grow and why online media will remain a small player for years to come.}

 Justin McCarthy is group managing director of the TBWA\Group\Durban

 

 

Tags: advertisingdigital evolutionInternetJustin McCarthymass mediaTBWA

Justin McCarthy

Justin is an advertising and media veteran and an independent marketing consultant. He joined the advertising business after serving many of its leaders while managing an upmarket Sandton restaurant. Since then he’s operated in all the disciplines in the communications field across virtually every category. With over 20 years’ experience he’s covered a lot of ground, both literally and figuratively, and is never shy to express an opinion.

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