What's to Come

Demands of Advertisers

Around $280 billion is spent in the U.S. on advertising! Big numbers with big expectations. The traditional way is to broadcast or shotgun the ads out and hope they find their target. The adage is We know that 50% of our ads work sometime. We just don't know which 50%! (This is obviously paraphrased and I have no idea to whom it is attributed.) So the advertisers spend the money and hope the shotgun spray hits. They play because they feel they must to be competitive.

Things are a-changing in corporate America and abroad, demanding more accountability for dollars spent. They ultimately are driving this ship that we call advertising because they have the money that feeds the beast. A funny little metric called R.O.I. or return-on-investment has come more into focus. In the past, this metric was laden with assumptions as to the relationship between the launch of an ad campaign and a lift in sales in a loosely associated time-frame. I use the analogy of a maker of umbrellas. They may run a new ad campaign, spend tons of money on the certifies and buys and see a lift at retail, but not necessarily because of the campaign, but maybe it is unseasonably rainy at that point in time. Or maybe they don't see a lift in sales due to dry weather. In this case, the relationship has little to do with the effectiveness of the ad campaign and everything to do with the weather.

Changes in technology surrounding ad delivery can potentially tighten this relationship between the ad campaign and its true impact on sales. Interactive media allow for the most direct correlation where ads drive buyers to make a purchase through that media. Media like mobile phones and television with an interactive environment will be critical for this delivery in the future.

Providing more concrete returns to advertisers will increasingly become critical for agencies, publishers and media companies who what to see future growth.

How are you reacting to these pressures?

-Andy

posted by Andy Huckaba @ 10:36 AM