The way humans interact with one another has changed drastically since the dawn of the technological era. Computers and cell phones have made our lives considerably easier and allow us to get things done much more efficiently than in the past. As time goes by, technology becomes a stronger and stronger influence in our lives and, as a result, older trends that were popular before the boom of technology are gradually dying out. One industry that has been transformed enormously thanks to technology is the Advertising industry.
With new innovations comes a new way to distribute ads. The Internet, for example, is one of the biggest mediums through which advertising is done nowadays, which is significant seeing as the Internet is still a relatively new technology in comparison to TV or, even more extreme, newspapers. Think about all the ads you are exposed to when you browse the Internet. You can’t scroll through your Facebook news feed without seeing at least a few ads, and a large portion of YouTube videos these days are preceded by a 30 second advertisement. While advertising methods like these have been gaining popularity, traditional methods have been failing to compete. For example, in 2012, newspapers lost $16 in print ads for every $1 earned in digital ads. This is a staggering statistic that shows just how much of a lead online advertising has taken over print. The following graph illustrates just how big the lead is projected to become over the next decade.
The real question is whether or not technology is helping or hurting ad agencies. On the one hand, it helps them come up with more creative advertising campaigns that would not have been previously possible, but it has also made the job harder in some regards. As noted in my second article, ad agencies used to be able to live off a good campaign for a long time and be well paid for it. One shocking fact in the article reads as follows: According to an executive from PepsiCo, they “used to give agencies between four and six months to produce a piece of content and would pay between $700,000 and $2m for each of them.” Nowadays, however, agencies have to “produce content in days, with each piece costing $10,000-15,000.”
With technological developments becoming an unavoidable part of today’s market, I believe that competition among ad agencies is going to continue to increase and, as a result, many of them will probably go out of business. In order to remain relevant and successful, agencies will need to adapt to the changing times and use technology in an inventive and creative way in order to set themselves part from the competition.
It will also be interesting to see how much longer print ads exist for. Based on the data, it seems like print ads are just a money pit that companies gain little from. I personally think they will be overtaken entirely by online ads due to the fact that most people in younger generations don’t read newspapers or magazines unless they are digital. In addition, I think the fact that online ads can be targeted to consumers more directly based upon what they search makes them a much more desirable tool for advertisers.
Thompson, D. (2013, March 18). This is the scariest statistic about the newspaper business today. The Atlantic, Retrieved from http://www.theatlantic.com/business/archive/2013/03/this-is-the-scariest-statistic-about-the-newspaper-business-today/274125/
Advertising agencies: Leaner and meaner. (2014, September 13). The Economist, Retrieved from http://www.economist.com/news/special-report/21615867-technology-has-made-life-harder-admen-they-will-not-disappear-leaner-and-meaner