Ad People Content With Bot Business, No Surprise

Michael Hedges February 5, 2020 Follow on Twitter

Our happy advertising people are happier than ever with through the roof 2020 spending forecasts. While not exactly stratospheric, a decent bump is sure to come from the Tokyo Olympics and Paralympics, other big sporting contests and irrational spending in various election campaigns. Then there are all those new products and services looking to impress investment bankers.

Advertising people are concerned about the environment. No, not THAT environment. The media environment is degrading, threatening their works of art, not to forget profit margins. Digital media, they fear, is a massive landfill, growing and smelly. For those who have sold aspiration for decades it is a terrible place to live.

Aspiration is the life-blood of consumer economics and, therefore, advertising. Selling what people need - that safety and security category - is completely commodified. Those products and services are price sensitive but, for their producers, lower margin. Unilever and Procter&Gamble are the masters.

One step up the pyramid is aspiration; dreams and desires. This is the realm of the young. Contrasting 16 to 34 year olds and the 55 year plus the UK Institute of Practitioners in Advertising (IPA) found media consumption rapidly diverging, reported The Drum (February 4). The media behavior of young people and older folks, it said, is moving further toward digital media (anything connected to the internet) with younger people strikingly so. The report credits the “rapid rise of the smartphone.” For anybody watching, this is no surprise.

That digital media has given the advertising people - and their clients - mind-bending advantages. Programmatic media buying is now standard practice. Data - collecting it and using it - is everything. Algorithms rule. Bots are everywhere. Who wouldn’t want a hands-free system to target (nearly) anybody with messages tailored to momentary dreams and desires?

At the end of last year the UK’s market regulator Competition and Markets Authority (CMA) published an interim report on digital advertising. In 2018, it reported, digital ads represented 57% of all ad spending in the UK. This is up from 20% in 2010. None of this is a surprise. Last year in the US digital ad spending surpassed traditional media, 54% of total ad spending. Digital advertising in India is now over half the ad market.

Nearly every market regulator is delving into the digital advertising business. All have a take on data protection rules, some beyond GDPR. Several have desires on the Google and Facebook revenue streams. The process is giving the ad people the creeps. After a decade of money falling, literally, off the trees regrouping would be painful. And, too, outcomes remain unclear, the anti-trust door swings both ways.

Meanwhile, ad effectiveness surveys continue to show the printed newspaper on top. In Canada, according to a News Media Canada study (October 2019), “print newspapers dramatically outranked all other media tested and were the only medium that scored a positive result.” The ad people declared the newspaper dead as soon as the digital fun started in earnest. The exception, though, are products and services in the safety and security category. This speaks volumes about trust. Newspapers are very hard to hack.

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