Advertising Industry Faces Monumental Change

"The next 5 years will hold more change for the advertising industry than the previous 50 did."

That, according to a new report from IBM (NYSE: IBM) Global Business Services. In "The End of Advertising as We Know It," (all apologizes to Sergio Zyman who published a book in 2003 under that exact title), IBM surveyed more than 2,400 consumers and 80 advertising executives globally.

The report shows, "increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked."

Report Highlights

• Broadcasters must change their mass audience mind-set to cater to niche consumer segments.

• Distributors need to deliver targeted, interactive advertising for a range of multimedia devices.

• Advertising agencies must experiment creatively, become brokers of consumer insights, and guide allocation of advertising dollars amid exploding choices.

• All players must adapt to a world where advertising inventory is increasingly bought and sold in open exchanges vs. traditional channels.

• U.S. users report more usage of social networking sites and user generated content than almost any other content services category:

• 45 percent use social networking sites
• 29 percent visit user generated content sites
• 24 percent use a music service such as iTunes
• 24 percent subscribe to premium television content

• In biggest DVR market, users report extensive replay of television programming. This is resulting in ad skipping and revenue shakeup unless producers and broadcasters reinvent marketing formats and messaging:

• 24 percent have a DVR in their home, and 48 percent have used video-on-demand from a cable company or other provider
• While 33 percent report watching more television content than before the DVR, 53 percent report watching at least fifty percent on replay

• Users feel extreme regarding new forms of advertising. Marketers have to work harder than ever to understand individuals and micro-segments:

• Nearly 50 percent reported that video spots online – during, pre-rolled or as sponsorships – were the least annoying form of advertisement. Other formats tested were banner ads, pop-ups, and contextual search ads
• However, nearly the same level of consumers responded the same forms of advertising were most annoying online
• Additionally, 11 percent said they’d be willing to pay a little for ad-free viewing of video online

Check out the full report from IBM.

Social Media Battles for Budget

Despite the explosion of social media, many marketers still appear reluctant to invest significant resources in blogs, wikis, forums, social networking, podcasts and virtual reality worlds.


According to Coremetrics, "More than three-quarters of US marketing professionals surveyed think that social media marketing—also known as Web 2.0—can give them a competitive edge."

"Marketers are aware of the impact that social media marketing can have on their overall program but view it as uncharted territory, not worthy of their budget," said John Squire, senior vice president of product strategy at Coremetrics.



While many organizations sit on the sidelines waiting for social media best practices to emerge, the innovators and visionaries are venturing into the world of Web 2.0.

It's not too late to integrate a social media budget into your 2008 marketing plan, and here are some ideas on how to get started:

• Build Wikipedia pages for your company and top executives.
• Join LinkedIn.
• Launch a corporate blog.
• Monitor industry news, trends, blogs and forums through RSS feeds.
• Read and comment on industry blogs and forums.
• Find out how wikis can make your organization more efficient and productive.
• Tap into the power of viral videos.

Need help with your social media strategy? Contact PR 20/20 today for a free 2-hour consultation.