Media grapples with change as advertising shifts to digital devices

MEDIA & MARKETING:Marketing professionals will have to acquire the digital know-how to survive transition, writes  SIOBHÁN O'CONNELL

IN A bar in San Francisco, a businessman craves a cigarette. He pulls out his tablet computer and a branded application connects him with his support group, who encourage him to stay strong. It lets him know he can get some new nicotine patches at a pharmacy just down the road. That’s the scenario which ad agency Mediacom predicts in five years as the advertising shift to digital devices continues.

The view from Mediacom, part of the WPP group, one of the largest media services companies in the world, is that the digital shift will mean there is more pressure on traditional media to produce results for advertisers.

According to Christian Schmalzl, Mediacom’s chief operations director, in 2015 the advertising market will have split in two. Marketing investments will be directed at either the very biggest media outlets or at platforms that are paid by results.

Says Schmalzl: “Dominant TV channels, big-selling newspapers and the largest digital portals will be strong enough to maintain their current trading models and benefit from heavy demand. However, the bulk of advertising space will be bought on the basis of a media owner’s ability to change consumer behaviour. They will be paid using metrics such as the number of leads or even the number of sales they generate.

“The change will be driven by consolidation of media ownership and digitalisation of all media. Currently less than 10 per cent of global advertising is ‘adserved’ – targeted messages delivered to precise segments of consumers so that viewers of the same content receive differently tailored, more relevant messages.”

In developed markets such as the US, UK, Germany and Australia, the figure is 10 per cent to 20 per cent, and MediaCom estimates it could be as high as 40 per cent by 2015. Even in developing countries the figure will be around 20 per cent, based on the rapid rate of digitisation in Brazil, Russia, India and China.

“With ads being targeted and tracked, marketers will be able to measure and optimise real performance and will only have to reward media owners for their actual contribution to the business,” says Schmalzl.

At the moment, the advertising model for big advertisers is built around occasional big bursts of brand advertising. If Mediacom’s prediction is right, this will change to year-round schedules of targeted messages. “If I have spent the last two weeks researching second-hand Polos, then the advertising I see will feature the Polo, not the new Golf VW launched the week before,” says Schmalzl. In this brave new world, marketing professionals will have to up their game and acquire the digital know-how. Mediacom’s view is increased emphasis on advertising results will mean less media diversity.

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STILL GOING strong after 48 years is the Shark Awards, an annual international advertising festival held in Kinsale that attracts entries from around the world. The chairman of this year’s jury was Trevor Beattie of London ad agency BMB, whose work for Ikea won the Grand Prix award.

Beattie, even though he took no part in this jury decision, seems to have been a bit embarrassed by the plaudit, as he had created a new Chairman's Choice award which went to Sydney ad agency Droga 5 for their lengthy Victoria Bitter ad called The Regulars.

Says Jude Healy, deputy creative director of Dublin agency Rothco: " The Regularsis the best ad in the world this year. There was some nice work from Irish agencies, but everyone needs to raise their game. It doesn't take big budgets to create a great commercial. Leo Burnett in Argentina won a gold award for a brilliantly simple ad created for a car dealership."

Young Euro RSCG's ads for Bulmers garnered six Sharks. Art director Philip Elliott observed that although the number of entries from Irish agencies was small this year, the quality was high. Like Healy, Elliott says he was scratching his head when Ikea won the Grand Prix. "Fair play to Beattie for coming up with a special award for The Regulars. It is outstanding."

Stephen Spielberg could make an appearance at next year’s awards. He recently spotted a Shark statuette in a London ad agency and rang the organisers asking could they send him one because he liked the design so much. According to Carol Lambert, a member of the organising committee: “We said we would give him an award if he turns up in Kinsale next year. We’re still waiting to hear back.” All the winners can be viewed at www.sharkawards.com.