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Advertising is Dead

Presentation given at the Inspire 2009 conference in Bucharest. Originally intended to be titled ´What if there was no TV´, during the preparation I noticed several trends that led me to change the title to Ádvertising is Dead´. Every new technology has a shorter curve from introduction to irritation. It´s time for a new approach, which I call the Attraction Model.

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Advertising is Dead

  1. What if there were no more TV? FUTURE LAB
  2. Outline speech Bucharest Need kickass opener Advertising is Dead FUTURE LAB
  3. Actually…. FUTURE LAB
  4. FUTURE LAB We are Futurelab
  5. WE ARE FUTURE LAB <ul><li>We create new profit opportunities for our customers.   </li></ul><ul><li>Our innovations and methods allow: </li></ul><ul><li>Marketers to become more effective & engaging. </li></ul><ul><li>Innovators to identify the next opportunity or niche. </li></ul><ul><li>CEO‘s to connect their business to the customer. </li></ul><ul><li>In the process, we challenge every barrier to business success. We dislike writing reports, billable hours or elaborate processes.  </li></ul><ul><li>Instead, we prefer to &quot;get on&quot; with making money for your business. </li></ul>FUTURE LAB
  6. A flexible boutique: 2 partners – 3 support staff – 9 associates – 28 specialists/contributors Athens – Barcelona - Brussels – (Bucharest ) – Johannesburg – Hamburg – Moscow – Kiev - Munich - Shanghai Priviliged Relationships Futurelab Structure
  7. Last Year
  8. 76% of consumers don’t believe that companies tell the truth in advertisements Yankelowich,2006 Last Year
  9. “ You can’t bore people into buying your product – you can only interest them” Last Year
  10. <ul><li>Big Six study (US): People with DVR’s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%) </li></ul><ul><li>78.2% of Germans are irritated by advertising, only 24% actually still watches it ( GfK Marktforschung) </li></ul><ul><li>85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.) </li></ul><ul><li>In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G) </li></ul><ul><li>A US hour of prime time TV carried 21 minutes of advertising, Late Night network shows like Leno or Letterman carry 31:27 ( TNS Media Intelligence, Q1 2006 ) </li></ul>FUTURE LAB The Consumer is Tuning Out
  11. “ Today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities.&quot; Jim Stengel, Global Marketing Officer P&G Last Year
  12. Advertising Myths 1. Frequency is mostly not a driver for action 2. There is no golden rule about OTS Last Year
  13. <ul><li>54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners) </li></ul>Last Year
  14. Share of Voice?
  15. <ul><li>Advertising is a tax you pay for unremarkable thinking </li></ul><ul><li>Robert Stephens, </li></ul><ul><li>CEO, the Geek Squad </li></ul>Last Year
  16. <ul><li>With total transparency, how can there be advertising? </li></ul><ul><li>Shotcodes in stores in Japan, telling you where to go to get the product cheaper </li></ul><ul><li>A fucked company example </li></ul>Total Transparency
  17. Prices aren’t what they used to be
  18. Total Transparency
  19. Lawyers
  20. Lawyers
  21. Doctors
  22. Teachers
  23. Most influential information sources in purchasing electronic goods? (TOP 3) CMO Council’s Retail Fluency Report, 2005 FUTURE LAB What are we focusing on? Share of total adspend by medium (global) % 2008 forecast (March 2008) Newspaper Coupons 25 Internet 21 Product/Company Information 16 Retailer information 14 Other 14 Magazines 4 TV 4 Radio 3 Source % In-store Sales Associate 49 In-store demonstration 36 Word-of-mouth from family & friends 33
  24. People who live near train lines find ways to adjust to the noise ... Consumers have begun to treat encroaching advertising just like those trains. Now…
  25. Banner blindness 1998!
  26. “ Online video ads are quickly becoming the medium of choice to drive both brand awareness and sales . ” (2007) 67% of marketers report they will increase their social media advertising budget in 2009 “ With young adults now spending on average six hours a week gaming, advertisers should be excited at how well their messages were embraced and the brands positively perceived” (2008)
  27. Contextual advertising ...has just died
  28. <ul><li>Advertising is dead – long live marketing </li></ul>Lets keep the patient alive a little longer
  29. Procter & Gamble is placing radio-frequency identification tags on products at a Metro Extra retail store in Germany so that when a customer pulls the product off the shelf, a digital screen at eye level changes its message At least be the first! 
  30. Marketing Sherpa Ad:tech survey % told by agencies to begin/increase viral video spend % of marketers advised by agencies to advertise in games/virtual worlds 62% 93% % asked to start/increase viral marketing spend on social networks 87%
  31. Hmm – what’s this? Naah, cant measure it Isnt there a bit much? Sooo 5 minutes ago Hey, actually this is cool The Advertising Technique Hype Cycle
  32. Is it all over?
  33. It’s only just begun
  34. The Attraction Model FUTURE LAB
  35. Attention Economy Reputation Economy
  36. Relevance!
  37. Reputation x Relevance x Engagement = $$$ Reputation Relevance Engagement
  38. Reputation Relevance Engagement The Attraction Model FUTURE LAB
  39. Experience Listening Customers Reputation
  40. <ul><li>perception </li></ul><ul><li>80% of CEO’s believe their brand provides a superior customer experience </li></ul>8 % of their customers agree (Bain & Company) FUTURE LAB
  41. Online Reputation Romania FUTURE LAB
  42. The online reputation is just the tip of the iceberg But it can crash your boat FUTURE LAB Source: Forrester Technographics® - 2008
  43. Because if you don’t listen... So Listen!
  44.   Results 1 - 10 of about 11,600 from for motrin . “ hell hath no fury like a mommyblogger scorned ” “ With regards to the recent Motrin advertisement, we have heard you. On behalf of McNeil Consumer Healthcare and all of us who work on the Motrin Brand, please accept our sincere apology. We have heard your concerns about the ad that was featured on our website. We are parents ourselves and we take feedback from moms very seriously. We are in the process of removing this ad from all media. It will, unfortunately, take a bit of time to remove it from our magazine advertising, as it is on newsstands and in distribution. Thank you for your feedback. It’s very important to us.”
  45. Reputation Relevance Engagement The Attraction Model FUTURE LAB
  46. Insight Communication Commerce Relevance
  47. <ul><li>Understand what truly drives your customers </li></ul>FUTURE LAB INSIGHT
  48. <ul><li>Podcast and map downloaded </li></ul>Commercial – yet relevant
  49. FREE TIX TO GREAT ADVENTURE Heard a rumor you can get 2 free tix to opening day weekend at Great Adventure amusement park 45000 tickets gone in 5 hours
  50. Relevance of Commerce
  51. Downsizing
  52. Reputation Relevance Engagement The Attraction Model FUTURE LAB
  53. Engagment <ul><li>Funnel </li></ul><ul><li>Content </li></ul><ul><li>Recommendation </li></ul>Move the funnel Content Recommendation Engagement
  55. Buzzmarketing
  56. Content wants to be free
  57. How to control millions of inaccurate and divergent conversations ? YOU DON’T Consumers are beginning in a very real sense to own our brands and participate in their creation … We need to begin to learn to let go. A.G. Lafley, CEO and Chairman of P&G, October 2006 (cc) Lynette Webb, 2006
  58. ‘ Help us choose’
  59. Let them improve your products
  60. Let them build their own
  61. Roll your own commercials
  62. Second Life is soooo 5 minutes ago
  63. What IS it good for ?
  64. The Power of Recommendation
  65. The Power of Recommendation Word-of-mouth is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising Marketing Science Institute, 2006 1967 1983 2001 2007 1955 This is not exactly news....
  66. How can we measure all this
  67. Extremely unlikely Extremely likely NPS™= (Promoters-Detractors)/Total DETRACTORS PROMOTERS PASSIVES Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld HOW LIKELY ARE YOU TO RECOMMEND? The Power of Recommendation 0 1 2 3 4 5 6 7 8 9 10
  68. <ul><li>Promoters make you more money </li></ul><ul><li>They spend more </li></ul><ul><li>They negotiate less </li></ul><ul><li>They stay longer </li></ul><ul><li>They are easier to service </li></ul><ul><li>They upgrade quicker </li></ul><ul><li>... </li></ul><ul><li>Slide: Bain & Company, </li></ul><ul><li>official NPS(tm) presentation Fred Reichheld. </li></ul>Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation
  69. Activate your Fans
  70. Must See
  71. No, it’s not...
  72. So get some people…
  73. Who will be the First Penguin?
  74. <ul><li>Traditional compensation & other systems stand in the way </li></ul><ul><li>Creative and media work in isolation </li></ul><ul><li>Lack of experience with new media (not everyone went “dot-com”) </li></ul><ul><li>Venturing into uncharted territory = risky (even on a personal level) </li></ul><ul><li>Nobody really knows how things will evolve </li></ul>
  75. General Eric Shinseki, Chief of Staff, US Army: &quot;If you don't like change, you're going to like irrelevance even less.”
  76. GO DO IT
  77. <ul><li>A deeper look at the model </li></ul><ul><li>How to improve the relevance of your mediamix </li></ul><ul><li>How to monetize WoM and Buzzmarketing </li></ul><ul><li>Social Networks more indepth </li></ul><ul><li>Net Promoter Score galore </li></ul><ul><li>Many many more examples and cases </li></ul>Tomorrow
  78. The Element of Surprise
  79. Http:// [email_address] if you want this presentation