The end is imminent, according to ad guru
THE world as media, advertising and marketing people know it, is about to come to an end -- and no new model exists to replace it.
The sky-is-falling-chaos-scenario was addressed at yesterday's Hawaii Advertising Federation luncheon by Bob Garfield, a columnist for "Advertising Age" magazine and co-host of National Public Radio's "On the Media" show that airs at 5 p.m. Fridays on KIPO-FM 89.3.
The number of avenues for the $250 billion spent on advertising each year have grown along with the population, meaning the audience of any given medium, such as television, is shrinking.
"Yet the cost of a 30-second spot isn't shrinking," he said.
The cost to reach 1,000 households with a television commercial cost $7.64 in 1994 and soared to $19.85 in 2004 -- amid increased competition for those eyeballs in those households including cable, video games and the Internet.
Production of episodic television shows is increasingly expensive, but "advertisers have paid more and more for less and less," he said.
Throw in people who watch shows on digital video recorders (and their predecessors, video cassette recorders) and zap past the commercials, and national advertisers are taking their money out of television, in droves, Garfield said.
Garfield noted that Viacom Chairman Sumner Redstone spun off CBS television, "to protect the rest of Viacom's profits."
Other traditional media are also losing users, including magazines and newspapers, he observed.
He took the industry to task for its "fixation" with reaching 18-to-34-year-olds who have, "cell phones, but no actual money," eschewing the wealthy Baby Boomer generation, in the name of building brand loyalty while consumers are young.
As big national advertisers including American Express, Procter & Gamble and General Motors divert more of their ad budgets away from television, "TV ad prices will suffer and programming will suffer."
"A quarter of a trillion dollars is leaving TV and going to cable," Garfield said.
The money can't all go to Internet advertising because it doesn't have enough infrastructure to ensure that ads appear in the right environments.
However, comparing 400,000 people watching CNN to 5 million downloads of Internet content is compelling data, he said.
He also compared the $16.2 billion capitalization of broadcast and billboard behemoth Clear Channel Communications Inc. with the $29.99 spent by "Dawn and Drew" to put their podcasts on the 'Net.
The mediums work differently, but "when real news occurs, anyone on the scene -- with a (camera) phone has an opportunity to be an on-scene journalist," said Garfield, right before he played familiar amateur video of the Thailand tsunami that was seen around the world.
One challenge advertisers have in getting their message out over the Internet is that "the customer has been conditioned to hate you," noting spam e-mails, pop-up advertising and other "abusively intrusive rich media."
He told Hawaii's advertising and marketing movers and shakers that "the top-down days are over," that they should realize they are not in the ad business anymore, they are in the consumer connection business."
Valuable insights can be gained from consumers and non-consumers because, "they know more about your brand than you do."
is a reporter with the Star-Bulletin. Call 529-4302, fax 529-4750 or write to Erika Engle, Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210, Honolulu, HI 96813. She can also be reached at: firstname.lastname@example.org