Loren Grossman – Advertising 2020

Loren Grossman, Chief Global Strategy Officer, RAPP

What is in store for advertising now and in the near future? To quote one of the anthem bands of my college days, R.E.M., “It’s the end of the world as we know it…and I feel fine.”

Never has advertising been under more pressure to evolve – both by advertisers and by the consuming public. It is not provocative to suggest that in 2012, print, radio, direct mail and OOH – long traditional advertising staples – face questions regarding their effectiveness if not their outright reasons for being. Most will be on the endangered species list by 2020. And while many are quick to point out that the surging popularity of digital has taken up and will continue to take up the slack, it is not difficult to recognize that what is happening online, on smartphones and on other digital devices, is not your father’s advertising: The evolution taking place is not simply a change of venue but a completely different brand/consumer dynamic with new rules, roles and responsibilities for everyone involved. The GRP, long rumored to be sickly, will soon finally be laid to rest, and the success metric for the new marketing millennium will be nothing short of Shareholder Value (on both sides of the brand table – corporate and consumer).  In fact, if you are an advertiser and have not already transitioned from “how can I compel purchase behavior through communications?” to “how can I leverage the entire media ecosystem to add enduring, differentiating value to and surrounding the product experience?” forget 2020. It may be too late today.

This is not to say that television advertising, the 800-pound gorilla of yesterday’s and today’s (and probably tomorrow’s) advertising, is under siege. It is not. Sixty percent of all advertising dollars spent have been and will continue to be spent on 15- and 30-second ads. Retail, Automotive and Financial Services will continue to need to introduce us to new products, new models and lower APRs every five minutes or so during nationally televised sporting events. Hotel rooms in Cannes in June will continue to cost thousands of dollars a night, and flip-flop–wearing, unshaven creative types will still be paid outrageous amounts of money to come up with slogans like “Where’s The Beef?”. This will not change by 2020 and will likely never change. What will continue to change will be how these ads are deemed successful. And that will depend less and less on a tag line and more and more on what happens next – after the spot runs.

As it turns out, TV campaign effectiveness will no longer be tied to impressions, anecdotal sales increases or subjective arbiters of good advertising. Instead it will be tied directly to its ability to act as a catalyst for deeper, richer, more meaningful (and more measurable) brand/consumer interactions that will themselves act as catalysts to profitable behaviors. Ads will no longer be asked to drive perception. They will be asked to drive search…or opt-in…or any number of behaviors that in turn will build deeper, more enduring brand/consumer relationships. TV will continue to add heft – but it will no longer be thought of as the heavy lifting, brand-building channel it once was thought to be. Instead, by 2020, TV advertising will increasingly be recognized for the trigger device it is very much becoming, deemed successful if it efficiently links viewership to lower-funnel, consumer-driven interactions, leaving the brandbuilding to those connections that create more enduring and more valuable experiences.

For example, more and more, Nike ads will not strive to simply create brand impressions or drive to buying a specific pair of Nike sneakers. Instead they will drive to search, Twitter and other social media platforms, which will in turn drive to Nike+, Nike Fuel Band and Nike Connect. And it will be these platforms that will create experiences that themselves will create more brand-affinity and brand-love than any TV ad could ever create by itself. This will drive to buying lots of Nike sneakers over the course of that athlete’s life. And it will not only be true of bleeding-edge brands like Nike. By 2020, it will be true of most brands – or at least the successful ones.

In order to prepare for this new kind of brand/consumer dynamic, we as advertisers must understand two key constructs required for success. The first is the importance of and the ability to leverage data.

2020 will see data break out of its measurement and reporting shackles. In fact, already in 2012 au courant marketers recognize data as the single most important ingredient in developing solution-creating, value-adding platforms that will increasingly be charged with brand-building, as described above. Data is the lifeblood of these platforms. Through the understanding and activating of data and their supporting technological architectures, we as advertisers will create rich, intimate, highly personalized and culturally resonant experiences for the people and communities that care about our brands. These experiences will help transport people and communities from their current state to a desired state (within reason), and these folks will in turn thank us by becoming brand loyalists.

This is not easy, as digital technology has made almost every brand/consumer touch point a data portal. Big Data, as it has been recently dubbed, requires big and robust technology solutions and Big Data scientists that know how to read, synthesize and use data to drive experiences, often in real time. Further, these data scientists will not succeed if they are only bolted on to the existing machine as a new component might be. Instead, they must be integrated completely and seamlessly into our advertising world so that the solutions they divine are not simply technologies for the sake of technologies but part of the DNA of the organic, brand-building, transformational experience. This will not be easy on the Big Data scientists; they prefer to work for IBM and HP. It will not be easy on the advertisers, who prefer entropy to rigor. And yet it is essential to our success. So if you do not have Big Data Scientists on staff, I suggest you go out and get some. Now.

The second component is Service Design. Data, technology and the new media ecosystem are going to conspire to make advertising output complex. Complex is bad. Design is the art of making the complex seem simple. This is important. Service Design is the premise of making the user experience simpler – and better – with serving the customer as the desired end-state. As we transition from a “communication as output”-driven industry to a “shareholder value as output”-driven industry, understanding how to serve customers through experience will become a new but absolutely essential subject matter expertise required to create great advertising. To quote Nike’s Stefan Olander, “The goal is to create connections with our customers and earn their loyalty by serving them. The better the service, the stronger the connection.”

Ultimately, evolving as an industry away from anecdote and toward enduring value is a good thing. When the going gets tough, it is always nice to be able to point to real, measurable contribution. Our survival as an industry will largely depend on our ability to fully understand what is being asked of us and subsequently make the most of the opportunity before us.