Advertising Under The Internet

The only one in 2008

Advertising companies are excited about the success of turning to video sharing website YouTube, because it proves that traditional advertising companies can conquer the Internet with old-fashioned marketing skills.

Gorilla advertising (Gorilla) has won the movie awards in Cannes International Advertising Festival (Cannes Lions International Advertising Festival).

In June this year, the advertising festival in Cannes became different.

First of all, Croisette Avenue is usually crowded with advertising people attending the event, but this time it is a mere bird. Many advertising agencies have not participated in order to conserve the continuous tightening budget.

But anyway, what impressed the judges in all categories is not that TV commercials win awards (like gorilla ads) because of networking.

The most successful marketing campaign is the network led competition sponsored by Tourism Queensland, which competes for the best job in the world - a caretaker of a paradise like island.

The success of word of mouth attracted media coverage of a total estimated value of $100 million, including the Broadcasting British Corporation (BBC) TV documentary for the winner, while Queensland's media budget was only $1 million 200 thousand.

This sharp contrast in numbers and economic recession has not only affected advertising budgets and costs, but also hurt the self-esteem of the huge advertising industry. Investment bank Jefferies predicts that the world's 5 largest advertising groups will earn 45 billion dollars this year, while the whole marketing service industry will earn 80 billion dollars.

The industry is facing huge cyclical and structural changes.

According to WPP, GroupM, which buys media space for its customers, predicts that global advertising spending will drop 5.5% this year to $417 billion, and will further decline by 1.4% next year.

According to WPP, the world's highest paid group, the profit in the first half of the year was almost half cut, further highlighting the pressure of the recession on the industry.

But the problem facing traditional advertising companies is to provide advertisers.

Tribal DDB, UK's managing director, Mike Mike (Mike Parsons), said: "the difficult times and the niche characteristics of this car have led to (Volkswagen) changing the policy and taking the pure digital path."

Tribal DDB's GTi website has been envied in the Broadcasting British Corporation's Top Gear auto show.

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Tom Bedecarr e, chief executive of AKQA, a large independent digital advertising company, said, "software engineers are the new rock stars in the marketing world" - replacing the godfather role that is usually played by creative directors and Tom writers.

But the arrogance of Mad Men, the creative director of the Don Men, has been lost.

Mad man is a TV play depicting the advertising company of Madison Avenue in the 60s of last century.

"Scene lighting has become the past -- we are all under fluorescent lamps," says Liz Miller, CMO Council.

If you want to play and whitewash, now is not the right time.

Some of the long-standing advertising companies are struggling in social media, viral marketing, behavioral targeting advertising and three dimensional "augmented reality" ocean.

They are the response of these fashionable terms, not the creators.

Their business has hardly changed since the age of RAPOO, and now it is hard to keep up with these new developments.

Kaf, chief marketing officer of Kraft Foods (Mary Beth West), said at a panel debate in Cannes: "in the past, customers listened to advertising companies." (Foods)

Nowadays...

Advertising companies listen to customers - and we all listen to consumers.

Jim Jim Stengel said that economic pressure has increased the urgency of marketing business reform. (Stengel)

As the chief marketing officer of Procter & Gamble, he was once the largest single customer in the advertising industry until last year when he left P & G to establish his own consulting company.

As marketing budgets are increasingly used to "provide service, utility and help to customers", the funds left to traditional business models may be reduced.

"The more turbulent and changing situation is yet to come," Stengel said.

However, he added, "in the long run, this is positive because I think it liberalized people's minds, allowing people to accept different views and patterns and take on more risks."

The top management of some advertising companies admit that their models are not suitable for the Internet age.

Fernando Rod Fernando s Vil, chief executive of Havas, the French advertising group, said that the wartime metaphor of "war, targeting and launching" is no longer applicable.

He said: "the mode of World War II started in the control of several fields: there are very few media, and there are only two or three related brands and advertising companies in each field.

We now face a completely different environment - more democratic, more socialized and more interesting, but also more difficult for marketers. "

This change has taken place long before the economy began to decline last year.

Since 2002, the proportion of global advertising expenditure in GDP has been declining.

Robert Shaw, Professor of Cass Business School in London, said that the volatility of advertising spending has been consistent with the broad economic fundamentals from 70s to 2002 of last century.

He blamed the shift on the pfer of the budget to the Internet.

He said: "the problem of using the Internet is that many (media) costs have dropped a lot, and all the other costs have been dragged down.

But to the advertising companies, it is ironic that the cost of online advertising is much higher than that of television.

This has eroded their profit margins.

Interpublic Mediabrands, chief digital officer of Mediabrands, says that the time spent on online advertising space and labor costs is almost 4 times that of traditional media because of the more fragmented Internet audiences. Quentin Quentin

Rich Silverstein, co-founder of global marketing giant Goodby, Silverstein & Partners, said it is difficult to adhere to the traditional mode of time charging when launching online promotional activities. Ricci

"The Internet is so deep, like diamond oil.

So far, I don't think we've really charged all the time we put in. "

However, the chief executives of advertising companies are not convinced that the advertising industry has fallen into a long-term recession.

Sir Martin Sorrell, chief executive of WPP, said that the trend of globalization and rising social responsibility of customers will increase the demand for marketing services. Martin,

Maurice L e vy, chief executive of Publicis, believes that in 3 years, the profit margin will be 13% above the first half of this year back to 16%, and more performance incentives can be achieved in the conclusion of the contract, to a certain extent, this can be achieved. Maurice,

"Because our customers are cutting costs and want to invest more in less investment, we say," OK, but we demand incentives based on performance.

This will be a win-win situation.

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Coca-Cola (Coca-Cola) is a large advertiser who has started paying for all advertising companies based on their performance.

Carol Kruse, vice president of interactive marketing at the soft drinks group, said: "from a customer's point of view, you don't want to pay just for your efforts, and you want to pay for the results based on the results." Carol Kruse

If advertising companies are to avoid a longer-term recession, the new pay pattern and the structure of advertising companies will increase.

PWC (PwC) advisers expect global advertising spending to return to 2006 levels by 2013, when Internet advertising accounts for more than double the share of the budget, from 8.6% to 18.7%.

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Over the past 20 years, "the ability to measure and control (Marketing) spending has matured a lot," said Mark Mark, director of the Central Office of Information, the biggest advertiser in the UK.

"Overall expenditure has been reduced.

This is not because people have reduced marketing activities, but rather improved marketing plans. "

Advertisers have long complained that half of their budgets are wasted, but they do not know half of them. Now they are trying to ensure that their investments can get better returns.

Lund said, the advertising company's response is to make the services offered by them more inclusive.

Or, as Chuck Brymer, chief executive of DDB, said, "we do not understand the media."

He said he would rather focus on creative ideas than media.

DDB is the largest advertising company in Om Nikon (Omnicom), currently employed by the financial times.

However, in the hierarchy of traditional advertising companies, digital media is just coming out of the bottom. People have always classified it as a technical producer rather than a creative producer.

Until now, digital advertising companies have taken the lead in big customers' bills.

Gaston Legorburu, executive director and creative director of Sapient, a digital advertising company, said: "when we first participated in the Cannes Advertising Festival, we felt like an alien." Gaston

People think we are not creative institutions.

So Sapient bought Nitro, a creative organization of marketing activities in Queensland Tourism Bureau, and became one of the first cases of digital professional companies acquiring traditional advertising companies.

He explained: "I don't believe in the structure of" self help genius "with many helpers.

It is much more difficult to try to make an old Madison Avenue organization quite different. "

This is exactly one of the oldest advertising companies -- the challenge faced by David Eastman, JWT's global digital director, David.

Eastman said, "it's hard for advertising companies to work in harmony with On-Line Company, because traditional advertising companies often regard themselves as the brand's defenders, while interactive companies view business from the perspective of consumers.

"This is the two totally different view that has existed and is deeply rooted."

For many traditional advertising companies, the entry into digital business means that they will cooperate with the technology companies once regarded as competitors, especially Google (Google) and Microsoft (Microsoft).

Sir Martin of WPP described Google as "frenemy", that is, half friends and half enemy. Lei Wei, a public lion, has been courting the two Internet giants. He bought a digital company from these two groups, Performics and Razorfish respectively.

More directly, Interpublic is working with Microsoft to build an automated system for planning and buying media space.

Most advertising agencies are still using Excel forms and fax machines, and are still trying to lubricate the process through long customer lunches.

But until last month, John Farrell, a member of the Executive Committee of the public company, said that if the holding companies wanted to improve their efficiency, they had to carry out more profound technological reform than fax John.

He said: "I can not think of how many other industries have not changed the basic procedures of producing products for 40 years."