If you haven’t read Bob Garfield’s presentations of how advertising will evolve over the next few years (Part 1 and Part 2), then you should. He calls this the “Chaos Scenario”…a perfect metaphor for what he describes. In it, he argues that traditional advertising is dying out as media usage and consumer behavior are changing. Much of the change has its roots in the rise of the internet as a marketing vehicle. But, Garfield points out, new methods and practices have yet to fully pan out. And many companies haven;t come to grips with this new and show no signs of doing it any time soon. This is going to cause (my interpretation) chaos as traditional media outlets struggle to get advertisers while these advertisers struggle to figure out how to advertise effectively with their limited knowledge.
For the most part, I agree with his thesis. Most major traditional marketing-oriented mediums are becoming less effective as promotional vehicles. Media usage is more dispersed, more personal, and thus, more controlled by the end user. And many times those end users today are choosing to ignore or avoid the advertising messages that are send their way. Whether it ends up being as dire as Garfield suggests, I have no idea, but changes are coming and neither the advertising mediums nor the advertisers themselves are ready for it.
And I think local is where we’ll see it first. I see this happening one the local level over the next three years. Goldman Sachs is predicting that traditional local advertising vehicles – local TV, newspapers and radio stations – are going to get hit particularly hard during this recession. I’m going to agree, and the key world there is “particularly”. That’s because local advertising is hurting anyway as advertisers have already been pulling back because it doesn’t work like it used to. Add to that further cuts in ad spend and you could get a serious amount of casualties on the local media market.
In the above graphs, we can see that newspaper get hit the hardest. Readership is down in the first place. That’s permanent. People have stopped buying newspapers for whatever reason – a lack of interest in news, having news available online, and getting quick news capsules in other mediums. A poor economy has little or no effect on newspaper buying. We won’t be seeing a rebound once the economy bounce back.
The collapse of players in the local ad market will reduce the options for advertisers. Yet the demand will probably still meet the supply. So we’ll see further erosion. Craigslist, satellite radio, and cable TV will make this so.
One of the alternatives will be local online advertising. But I don’t see many local advertisers ready for this. I still see most local companies that are likely to advertise having little more than brochureware websites. I see very little use of local Google Adsense coming from traditional businesses. And, again, the websites are neither optimized for online search nor are they set up with the correct landing pages for potential ads. Local businesses SHOULD be developing internet strategies, but the decision makers in them don’t go to our conferences, they don’t read our blogs, they’re not on Twitter. Nor are they probably on Facebook or MySpace. They’re far from it.
So while they’ll be temporarily holding back ad dollars during tough economic times, they’ll be likely losing some of their traditional advertising choices. And they won’t be ready or equipped to start marketing on new media – because they’ve chosen to not take the time to learn it. The end result? Chaos.
{ 3 comments… read them below or add one }
Local businesses may be hesitant to take on new ways of advertising, but Internet advertising could work to their benefit. The Internet makes brands more accessible and gives consumers more power and control. The #1 way of advertising on the Internet today is through Search. Unless local businesses start using a more modern, interactive means of advertising, they will soon be lost among the competition.
Two quick notes:
First, it’s interesting to consider how these troubled “traditional media outlets” will fare in terms of offering new online advertising options at the local level. I think about what a couple of our Twin Cities television stations and MPR are doing, and I see a lot of potential there — for consumers and, therefore, advertisers.
Second, just because we’re talking about “local advertising” as the future doesn’t mean we’re limited to smaller, more local companies — those you mention as more likely to be dealers of little more than brochureware — as the saviors of ad-based media.
The car dealership down the road and the dentist by the office aren’t the only folks who would, could or should advertise in my local market. Dell, Best Buy, Wells Fargo, T-Mobile and others are well-suited for localized advertising but have little if any connection to a specific local market.
@Rcjh08
You’re quite correct. A few days ago, I went to Google and put in “Brunch Northern Virginia” and there wasn’t anyone advertising. None at all. What a missed opportunity for hundreds of restaurants.
@Mike Keliher
First off, good to see you again. Secondly, you’re right. Larger companies will be taking the lead I think. They’re the ones that understand. Many of the local businesses still view advertising as either putting fliers on cars or by blowing the entire ad budget by advertising the local prestigious publication.