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AG News: 11/6/2007


Radio, Meet Your New Local Competition

"The End of Advertising as We Know It" is an eye opening report on advertising, consumers and media. Though it makes scant mention of radio, a suggestion is to get yourself a drink and read its 22 pages; you'll find many answers and trends to help pull the radio industry out of its tailspin.

"Scant mention of radio" should not prevent you from spending time with the words in this report by IBM Global, in conjunction with Bonn University’s Center for Evaluation and Methods. What's discussed comes from a polling of 2,400 consumers and feedback from 80 advertising executives worldwide. No punches are pulled. Truer words have not been spoken.

(Publisher's note: By now it's obvious I agree with everything said in "The End of Advertising as We Know It." Do not dismiss the change underway. Radio audiences will continue to fragment towards other media, and this report should be a primer on how you should respond.)

There are far too many items within "The End of Advertising as We Know It" to discuss here. You'll have to set aside time to see its details. But, here are a few (very few) quotes showing data and trends that anyone connected with advertising needs to know.

First, look at this persona: "Jim, the Chief Marketing Officer of a consumer products company ... is now in a world where he has full control of the effectiveness of his marketing spend." It explains the report's perception of your typical CMO five years from now.

Now take a look at yourself, or your peers as advertising sales professionals: "...many of the skills and capabilities that were the mainstay of success in the past will need refinement, transformation or even outright replacement."

Consumers are described as having "personal PC time [which] now rivals TV time, with 71 percent of respondents using the Internet more than two hours per day...." In addition: "Among the heaviest users, 19 percent spend six hours or more a day on the PC...."

This report is heavy on mentioning television. AG readers simply need to think "local media" when this happens.

Now on to a few more points made within this dissection of media:

"...advertising executives IBM polled expect 20 percent of advertising revenue to shift from impression-based to impact-based formats within three years."

"...more than half of the ad executives interviewed expect that open platforms will, within the next five years, take 30 percent of the revenue currently flowing to proprietary incumbents such as broadcasters." (Read "open platforms" as "online auctions.")

And here's one that should get special attention:
"As the advertising value chain reconfigures, broadcasters, advertising agencies and media distributors in particular will need to make a number of 'no regret' moves (necessary actions regardless of which scenario plays out in the future) to innovate...."

"The End of Advertising as We Know It" is not a sky-is-falling report so much as it is a call to put on hardhats. Our current radio industry methods need to be reconstructed (as do all traditional media).

For traditional media sales executives, and reps, there's a distinct warning here: "The majority of the advertising executives we interviewed expect significant dollar shifts from traditional advertising vehicles to search, mobile, Internet Protocol Television (IPTV), VOD and online video ads." Also: "The advertising value chain will therefore need to proactively integrate the more creative parts of its team, or others will do so from outside."

There's not much that I can add to this assessment by very qualified people.

But, to pull just one more quote in hopes it will intrique you enough to click through to their work, "...[the] analysis shows that the actual growth of Internet advertising has outpaced forecasts by 25 to 40 percent over the past two years."

If I had a choice on how to rephrase this it would be "you ain't seen nothing, yet."

















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President, Audio Graphics
Ken Dardis
Online Since January 1997



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