Commentary
An Advertising Revolution Is Taking Place
- by Rupert Maconick , Op-Ed Contributor, November 19, 2015
Last year alone, $600 billion was spent on traditional advertising. But there is a new advertising approach happening right now, which is a throwback to a bygone age: Brands are shifting away from traditional TV commercials to funding and sponsoring documentaries, television programs and specials, and films.
Brands will emerge as the film and TV moguls of the future.
Sponsored programs are not new. In the late ’40s, brands like Texaco and Admiral sponsored some of the earliest TV shows starring Milton Berle and Sid Caesar. In the 1950s and ‘60s, the term “soap opera” was coined because shows were sponsored by soap brands like Procter & Gamble. In the successful TV series “Perry Mason” (1957-1966), the protagonist drove a new car model in every episode, reflecting the different models of cars that the auto sponsor produced at the time. The insurance company Mutual of Omaha sponsored “Wild Kingdom” until they became firmly connected with the title.
The traditional advertising agency art-and-copy creative model was born in the 1930s for print advertising. A copywriter writes an ingenious print advert which is combined with eye-catching images from an art director. In the 1960s, the real “Mad Men” came along and in conjunction with the world-wide explosion of TV sets in every home, they invented the 30-second hard sell spots for the captive TV audience. In other words: They modified their existing methods of advertising to match the trends of the time and made the changing marketplace an opportunity for incredible growth.
Today, every brand and everyone in the advertising and broadcast industries are faced with a similar challenge – and opportunity: Our challenge now is that consumers are no longer watching traditional TV. Most consumers under the age of 40 do not have cable. The future of advertising is transforming, shifting away from television, billboards and magazine ads to platforms like Netflix, HULU and Amazon.
The 30-second commercial is dying. Consumers ignore or fast forward through ads on their smartphones or computers. In order to reach customers, brands are now in the content business.
How do forward-looking brands and advertising agencies adapt to this brave new world?
In 2013, Werner Herzog directed a 35-minute PSA film for AT&T, which was a huge internet and critical success: “Werner Herzog: From One Second to the Next.” The film has now been screened in over 40,000 schools and colleges.
That film worked because it was positioned as a documentary short film and not a commercial. The focus was on the storytelling and the emotional message, not the brand itself.
Many forward-looking brands and advertising agencies are adapting to the same model.
The younger generation of consumers wants innovation and engagement- to be entertained through actual story driven films. Red Bull has long been far ahead of other brands in creative marketing and creating short films that people want to watch. The Red Bull “Stratos Space Jump” not only broke several records, it was watched by millions of people live on YouTube.
Young people (the Millennial generation) have been dubbed an idealistic generation who emphasize social change. They want to support brands that do good. This means, that a brand’s products and services must reflect a young person’s value system. Young people are less likely to support fast food or soft drinks because they know they are unhealthy. The Werner Herzog film “From One Second to the Next” became a marketing success because of, not in spite of, the film’s authentic call for social change.
Forward-looking brands and advertising agencies are partnering with production companies and film makers who can bridge both worlds. In the future, many of the new short films, documentaries and TV that people actually want to watch will be paid for by cutting edge brands and advertisers.
The Millennials are the main consumers of the future. In order for the ad industry to survive the current changes to the marketplace, the $600 billion which is spent annually on selling young people stuff they don’t want, will be funneled into stories and content that they actually do care about.
In the very near future, cutting-edge brands will connect with their consumers by funding or sponsoring the next impactful and socially relevant documentary, independent film or television series.
Robert, I have to take issue with some of your statements.
In the first place, the switch from "60s" to "30s" in the mid- and late- 1960s had nothing to do with any input from agency "creatives". Rather, it was initiated and led by advertisers like Alberto Culver who sought cheaper ad units to counter rising CPMs for "60s". Once the netwoirks caved in and sold "30s" at half the cost of "60s", while ad recall scores for the shorter units were only 25-30% lower, the "creatives" had to learn how to make shorter commercials----it wasn't their idea.
Second, you state most consumers under the age of 40 don't have cable. I'd like to know what source you based that on as it doesn't jibe with reality. After all, who is watching Comedy Central, MTV, E!, etc.----old folks?
Finally, you urge advertisers, who you say are spending $600 billion anually to sell millennials stuff they don't want, to get into the content business and give the millenials----who will lead the nation to glorious heights in the future----content they care about. Do you really think that all ad spending is directed at bthe 18-34 age group? Do you really believe that advertisers will somehow fund an outporing of wonderful, uplifting, relevant, etc. etc. content aimed only ---or mainly---at the younger age group?
Sponsored programs have an important place in the mix of brand building tools. To say, however, that "Advertising's Future lies in sponsored story-driven videos" is gross hyperbole that would make even Donny Deutsch blush.
First, I'll offer a quick follow-up to Ed's comment. Thanks for the quick history/correction on 30-second TV spots. To your point about those actually on cable, some very recent research I've seen is at http://www.ibtimes.com/forget-cable-cord-cutting-83-percent-american-households-still-pay-tv-2081570.
Finally, I don't believe Rupert is indicating that all of ad spending is or should be directed at millinneals. He's instead saying this is the future, and based on what I've been seeing, I think he's got great points. I had a conversation just yesterday with a millennial television producer who was suggesting to me there should be a Nike network, among many others for brands who are already focused on developing "wonderful, uplifting, relevant..." content.
As one who's been focused on digital marketing for over a decade, it's exciting to see how storytelling continues to become a greater part of the equation. I think it started getting good lip service three years ago -- but now it feels like brands are saying, "ok, for real now, how can we do this?"
Most consumers under the age of 40 do not have cable.
What is your source?
Jason, I don't believe that there is any justification for the claim that most people under the age of 40 don't have cable. Also, the exact quote from the article is as follows: " ---the $600 billion which is spent annually on selling young people stuff they don't want---"
It's all very fine to worship millennials as "the future", but I would suggest getting the facts straight as well. Also, if history is any guide, previous generations of millennials, who now constitute our leaders, haven't done the outstanding job that was probably predicted for them when they, too, were younger. Let's hope that this time around, things will turn out differently.
I don't think there's any justification to claim that the sponsored programming is the way of the future. It's a pure brand recall technique - that includes virtually no informational impact. As a result, it's a highly limited methodology. If you actually have something to say - you're far bettter off to use real TV.
I'm told back in the 1970's they said "if you don't have anything to say, sing it". In the 1980's and 1990's, this turned into "if you don't have anything to say hire a celeb". Guess in the 2010's this turns into "if you don't have anything to say sponsor a program."
It's a valid approach for a few advertisers with unique situations. And that's very good for them. But there's not a shred of evidence it can move beyond that narrow market.
Netflix is the world’s leading Internet television network with over 81 million members in over 190 countries enjoying more than 125 million hours of TV shows and movies per day, including original series, documentaries and feature films.
Each subscriber avoids around 158.5 hours per year of commercials — if they were watching Netflix instead of cable TV.
Google these sentences if you wish to fact check.
rupert, the stat you quote is Netflix's average household---not viewer---daiily streaming rate. A typical Netflix subscriber, as an individual, watches about 50-55 minutes of its content daily. Also, an average Netflix adult subscriber views almost three hours a day of " linear TV"; unless he/she zaps every commercial break---which I doubt---- this means that quite a few TV ads are exposed.
I think that it's an exaggeration to attribute Netflix's success mainly to peoples' desire to avoid commercials. That's a plus, however the main drivers for Netflix are the mediocre quality of broadcast network primetime fare and watching what you wish when you want to. The fact that Netflix subscribers---as reported in my recent 'Mediology" white paper----seem to be frequent cable viewers attests to their craving for different forms of content than the broadcast nets are serving up.
http://www.usatoday.com/story/tech/2015/12/16/cutting-cord-more-millennials-have-streaming-service-than-pay-tv/76914922/
Among the other findings that Clearleap discovered in its survey:
• Millennials are out front in the adoption of streaming services. Among those ages 18-29, more than 70% use a streaming service, but only 64% have a pay-TV subscription. And one-fourth of them (26%) have never had pay TV.
Terry Savage, Chairman, Lions festivals said, “We’ve seen again and again how integral it is to create content that integrates into the lives of consumers instead of interrupting.”