Crain’s editorial sheds light on why the advertising industry is so reluctant to change

As readers of Repman know, I’ve been talking for some time about the power of word-of-mouth and public relations in reaching the new, technology-enabled consumer. The rise in importance of word-of-mouth and PR is a direct result of both "practices" understanding and managing the "trust" that is so essential to creating digital dialogues between organizations and consumers.

At the same time, though, advertising has been doggedly hanging on to the traditional 30-second advertising spot (and some of you have vehemently protested that the good old TV spot is just asCurrent  effective as ever). Monday’s copy of Advertising Age contained a fascinating editorial by Rance Crain that explained, in part, why advertisers and their ad agencies have been slow to abandon the traditional and embrace the digital. For advertisers, it’s because, says Crain, they don’t "get" digital and are content to play it safe with "sexy and fun" TV spots. For their agencies, it’s because traditional advertising profit margins are significantly larger than what the ad shops can earn in digital. Plus, both parties think they know what’s best for consumers (in other words, they’ll decide what information the consumer will use to make a buying decision).

Crain calls the ad industry’s mindset an "arrogant attitude." In my opinion, it will come completely undone when consumers continue to "Tivo" commercials, channel surf past mind-numbing 30-second spots and walk out on Broadway plays that ambush audiences with live commercials before Act One. When digital media does take over, says Crain, "all the king’s horses and all the king’s men won’t be able to put traditional media back together again."

11 thoughts on “Crain’s editorial sheds light on why the advertising industry is so reluctant to change

  1. I had a dream to begin my organization, nevertheless I did not have enough of money to do it. Thank heaven my close friend suggested to utilize the credit loans. So I took the secured loan and realized my desire.

  2. Wow! I don’t know about other readers but Andrew impressed me with the info, stats, and presentation. What was best about Andrew’s comment was that it was fair and balanced- it didn’t blow off advertising and didn’t tout PR as the greatest show on earth.
    Kudos to Andrew for a great commentary! Here’s my vote for Andrew to consider launching his own rep blog!

  3. There is no doubt that TV plays an important role in the marketing mix. Bray’s high ranking ad exec summed it up nicely: “TV spots are one element of a much larger branded communications campaign that lives in many places including digital, mobile, etc.”
    That said, there is no getting around the fact that television advertising in America is losing its effectiveness as a result of tremendous clutter and technology that enables consumers to tune out.
    8% of the American TV viewing population already has DVR according to a 2005 CBS study (Tivo is just one brand, Ad Exec). While DVR is not growing nearly as fast as people predicted, it won’t be long before that number reaches 50%.
    And for those of you that like stats, a recent study by the American Academy of Advertising showed that when a TV commercial comes on, 92 percent of us change/mute the channel, ignore the commercial, or divert our attention to something else like reading a newspaper, engaging in online communities, or talking on the phone.
    I disagree with high profile ad exec’s statement about the 30 second spot being the only vehicle for reaching a mass audience. How about the power of word of mouth (both online and off)? I’d point him no further than a little site called Myspace, which drew 38.4 million unique visitors last month. This brand wasn’t built by advertising, but through viral marketing and PR. How about Botox, which relied solely on PR for its first 9 years on the market? And when was the last time you saw a Starbucks ad? Or a Blackberry ad? There are tons of other examples. Remember those yellow bracelets half the country was wearing? LiveStrong was built on WOM and PR — not advertising. The list goes on and on…Ben & Jerry’s, Hotmail, Google, Jetblue, etc.
    In a recent speech, Al Ries pointed out that “The Volkswagen brand was launched in 1950. By 1959, VW was the #1 import with 20% of the market. In 1960, the very first VW ad ran (created by DDB). What built the Volkswagen brand? Was it the award-winning DDB campaign? Or was it the ten years of favorable PR?”
    Hopefully these are enough case studies to illustrate the value of PR and WOM.
    By citing these examples, I’m not suggesting that advertising isn’t valuable. Of course it is, or else brands wouldn’t spend billions of dollars on it. Much like brands wouldn’t invest in PR if there wasn’t a positive result. It’s all about finding the right mix, and these days, smart brands and agencies alike realize that today’s consumer craves customization, empowered interactivity, and peer feedback. It’s about talking “with” customers – not “at” them. Awareness, while important, will only get you so far. Trust is key, which is why PR and experiential marketing are growing in importance.
    The bottom line is this — at the end of the day, it’s all about coming up with a remarkable story/creative to push a remarkable product. If the product innovation isn’t there, buzz won’t catch on. People won’t talk. Journalists won’t write. People will tune out ads. Period.

  4. jimmy- great post, dead on! the 30 second spot and advertising are going no where. sure, budgets might get tweaked but as ad budgets gets smaller in some cases, the ad agencies will come up with creative ways to win them back.

  5. Repman, I hear you on not being able to please everyone, but I certainly would like a little more diversity in the blogs than the recent offering of 24/7 ad bashing.
    In terms of case studies, I was not suggesting that you provide peppercom case studies per se, but I’d sure like to see some backup to the bragging of how wonderful pr is as opposed to advertising. you routinely mention the “rise of the citizen journalist” but thats about all we get in terms of why advertising is going 6 feet under. some facts to backup the opinions would certainly make me put more credibility into what you are saying.

  6. the 30 second spot won’t die, in my opinion. i also believe that digital plays will be awarded more of the advertising budget.
    ’nuff said.

  7. Well, you just can’t please all the people all the time. And, I sure wouldn’t want the publisher of Ad Age to hear what some of you have to say about him. As for real world issues, there are plenty to come. Just hope those don’t turn off some others. As I said, it’s impossible to please all the peole all the time. The Crain piece was thoughtful in my opinion. and that’s what I’m sharing…my opinion. As for case studies, sorry, but that’s for new business presentations, not the Repman blog.

  8. Repman-
    Wanted to propose a novel idea to you. Rather than spending your time trying to knock the ad industry in most of your blogs and then just telling us that “pr is so effective” why not share case studies and success stories of how PR was actually more effective than advertising. Better yet, it doesn’t have to be more effective than advertising, it can just be cases where PR was effective.
    I don’t know about other readers of the blog, but I can tell you that the constant ad bashing followed by “and PR is oh so wonderful” is getting a bit old. The content used to be about real world rep issues like George Bush and Barry Bonds. Now it has seemingly become the repman’s personal ad bashing board. So here’s a plea to the repman to go back to the content that made this blog an interesting read. (And please don’t respond saying “no one is forcing you to read this…”)

  9. amazing how an ad exec (was it steve tollen?) agrees with a medical supply exec. i am looking forward to what media exec, aka james moock has to say on this one.
    repman, my opinion is not necessarily that the 30 second spot is as good as ever, but it surely is not going away anytime soon as you would hope and believe. the ad exec quoted above certainly makes me question the editorial and makes some great points about the 30 second spot only being part of the bigger picture. the thing i find amazing is that 5 years ago all the talk was about banner ads being the next big thing to replace the 30 second spot and we see where that went. now all this talk about the citizen journalist is the topic du jour and it wouldn’t shock me if that fad goes the way of the chia pet.

  10. briza-
    i didn’t know i now qualify as a high ranking ad-exec as well 🙂

  11. Repman, just shared your blog with a high-ranking ad exec. Here’s the response.
    On one hand, it is right. but it was way more right about 3 years ago, and the fact that someone is actually writing about that now, shows how out of touch he actually is with what’s happening. the leading brands of the world have totally embraced the digital world and ad agencies have played a big role in helping them get there.
    will :30 spots always be prevalent, of course. they are the only vehicle at this point that reaches the sheer mass numbers you want to reach.
    what the “good” agencies are doing though is not looking at :30 spots as single pieces of communication. they are one element of a much larger branded communications campaign that lives in many places including digital, mobile, etc…:30 spots don’t tell the whole story. they drive to places like web in order to dive deeper and learn more.
    lance crain has never been involved in creating communications for a brand so he has no clue what agencies are doing. he and everyone else will continue to talk about tivo but forget the fact that less than .01% percent of people with TV actually have tivo.