Rather than displacing television, the internet, including social media is doing an excellent job of building the medium.From an article titled, “7 Things You Need to Know About Social TV Right Now,’ the writer provides proof:

Back in the summer of 2009, we tracked everything from Sonia Sotomayor (then a nominee for the Supreme Court) to “Glee” to Major League Baseball to “True Blood.”
Over time, it dawned on us that more than anything else, TV was driving social. Sotomayor would trend on Twitter only when her confirmation hearings were being televised; a specific team would trend because it was doing great (or sucking) in the game being broadcast at that very moment on ESPN; during prime-time hours in the U.S. and the U.K., Twitter’s trending topics list would be all but taken over by TV-related chatter.

Why is this? In a word, behaviour.

Social TV is about watching TV with other people — think of “50s-era family and friends gathered around an old Magnavox console to catch “I Love Lucy.” Only now the living room has gone national.

In fact, it’s reversing problems such as time-shifting.

“We did a survey of our 10,000-person TV-fan panel last year,” said TVGuide.com’s Tanner, “and what we found is that 20% of them said they are watching more live TV specifically to avoid “social spoilers.’”

It’s not just TV that’s benefiting from social media, but brand campaigns running on TV as well, such as Old Spice. The brand was resurrected on television and only somewhat later extended to social media. However, had there not been a huge spend on TV, the social media effort wouldn’t have even been considered. Pepsi learned this lesson the hard way last year when they shifted much of their budget away from TV to social media. Pepsi is now in third place behind Diet Coke.

So, contrary to the current crop of vested interest ‘experts’ claiming that traditional media such as TV will give way to social media and that, once again, advertising as we know it is dead, the opposite is happening. Why is this? Why does TV continue to be so dominate? I think there are a couple of reasons. For one, it’s not about the conversation, it’s about what causes the conversation. And TV is really, really good at that.

For another reason, and not to belabour the point, it’s about behaviour.People understand the internet differently than other forms of media. For one thing other than your hookup, the content is largely free. For another it’s an information medium first, whether that’s checking up on friends or family, or finding out the latest info or price on something you’re interested in.

People fan brands online mainly to get deals. They don’t recommend brands because they like the brand so much as they like their friends and want them to benefit from what’s on offer.As a CEO of an online media company recently wrote about in Ad Age:

It’s time to face the reality that the Internet sucks as a branding medium. I know that statement will rile up a few people, but I am starting to believe that the Internet may not be the right medium for brand development, at least in its current form. Trust me, it doesn’t help my business if TV dollars don’t come online, but it appears that online advertising is destined to become the greatest direct response medium in history and the greatest branding disappointment ever. This shouldn’t come as a surprise to anyone.

The thing is, as an advertising medium, the internet and social media have their own value proposition and purpose. It’s an arrow in the quiver, not the whole quiver. It’s up to smart marketers to integrate these tools in the most effective way possible, based on an idea that can be executed across platforms.

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Here we go again with another self-serving ‘prophet’ predicting the end of brand advertising.

In this case it’s a fellow by the name of Alex Rampell, CEO of a company called TrialPay. He predicts something he calls ‘Transactional Advertising” will replace brand advertising in the near future.

Why? Presumably because that’s what he does.He explains the value of a brand this way:

What’s the value of Coca-Cola’s brand? Pure math – it’s the Net Present Value (NPV) of the difference that consumers will pay for Coca-Cola versus, say, RC Cola, for the lifetime of the consumer and duration of the brand. When you pay $1 for a Coke versus $.50 for an RC Cola, the $.50 difference is chalked up to the “brand.” (Yes, perhaps there are differences in taste, too – but even with an identical formula and taste, I would argue RC Cola wouldn’t sell as well as Coke). Multiply $.50 times billions upon billions of cans of Coke, and you see the power of brand.

An ok explanation, however, Interbrand estimated Coke’s brand value at $68.7 Billion in ’09. Up 3% from the previous year. Their valuation method is explained here.

As much as I can understand it, here’s Mr. Rampell’s argument in a nutshell:

…what if Walmart refused to stock Coca-Cola, instead stocking just RC Cola? Granted, Walmart stocks Coca-Cola because consumers demand it, and consumers demand it because of the brand that Coca-Cola has created, but that can easily be reversed. If Walmart decided to stock only RC Cola and expel Coca-Cola from its shelves, this would change RC Cola’s fortunes, and harm Coca-Cola, quite a bit.

Why exactly would Walmart do that? A self-defeating, circular argument to be sure.

He goes on to explain the concept further with a little help from Captain Obvious:

Preferential placement of a good or service at/near the point of a transaction is something I call “transactional advertising,” which I predict will expand as a category in the coming years.

But where’s the “advertising?”

This form of transactional advertising exists today, although you might not know it. Proctor & Gamble spends great effort and expense (though it pales in comparison to their brand advertising spend) to ensure eye-level placement wherever its products are sold.

Oh, I get it. Shelf placement and POP!

To be fair, point-of-sale is becoming more sophisticated and will continue to do so, especially with mobile transactional software, mobile apps, 2D bar codes, augmented reality and the like. Still, it’s not competitive to brand advertising, neither will it replace it. It’s simply the final stage of the purchase funnel.

Oddly enough and as much as Rampell claims that he coined the term – ‘Transactional Advertising’ has been around since the ‘80’s. I recall a couple of Canadian retail agencies using it as their unique point of difference. He finishes with an admission about his masterplan:

Today you see very little in the way of transactional advertising online; rarely does one brand pop up in another brand’s checkout experience.

Unless it’s a house brand, wouldn’t a brand have to pay for that opportunity? And if so, given Rampell’s earlier comparison, what if it’s RC Cola versus Coke, who’s going to win that bid?

Why, the one with the best known and valued brand I suspect.

Who is this guy and why is TechCrunch giving him a soapbox? Another argument that belongs with “A Marketing Era of False Prophets and Failing Results.”

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An excellent article on the history of advertising written by Randall Rothenberg for Ad Age. Certainly an article that new people in the business should read and study. He finishes the article with this:

But as we near the end of the broadcasting era, at the twilight of the advertising century, this much is now clear: In the spark of creativity lies the future of business.

This is a fundamental truth, regardless of changing technology and the advance of metrics. Though, Bill Bernbach in the 1960’s said it best when challenged with the silly idea that advertising is science:

Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.

He also said:

However much we would like advertising to be a science-because life would be simpler that way-the fact is that it is not. It is a subtle, ever-changing art, defying formulaization, flowering on freshness and withering on imitation; where what was effective one day, for that very reason, will not be effective the next, because it has lost the maximum impact of originality.

The more things change, the more they stay the same.

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Avi Dan makes some very good points in this AdAge article. Rapid change in technology and consumer behaviour is something every brand marketer should be paying close attention to. However, given the average 11% budget allocated to online marketing (in Canada), most aren’t. Failure is the consequence, as the tenure of the CMO will continue to decline from the current average of just 18 months.

• While consumers and retailers embrace these innovations, one group seems to be conspicuously lagging behind the rapid technological evolution of the marketplace: marketers. Consider this: Ten years ago, at the beginning of the decade, consumers spent 30 minutes online. Today it’s four hours, according to Media Metrix, twice as much time as they watch TV.
• In this decade broadband expanded from 3% to two-thirds of American homes. Yet marketers barely adjusted their approach. While investment in digital advertising has crept up some, roughly 90% of budgets is still spent on traditional channels like TV.
• A good place to start is reviewing the scope of their relationships with their agencies. CMOs must demand that all of their agencies, and not just the digital shop, become technologically savvy.
• Marketers should strive for mutuality and non-partisanship in brand stewardship. Today, it is ensconced with the “traditional” agency, while other disciplines play a supporting role. Of course, if you spend 90% of your budget with traditional agencies, that makes sense, but it also leads to silos and makes integration hard.

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