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Please, Wait
3rd October 2018
Advertising, as we know it, is dead.
By Narendra Nag
The TV spot, the interstitial ad, the point-of-sale dangler, and their extended family are all heading towards history's dustbin, as interesting and nostalgic as rotary dial telephones, typewriters, and 1960s Jags.

The TV spot, the interstitial ad, the point-of-sale dangler, and their extended family are all heading towards history's dustbin, as interesting and nostalgic as rotary dial telephones, typewriters, and 1960s Jags.

Not because they aren't good — I would argue TV spots today are better than ever before. And digital ads are often brilliant. In-store/point-of-sale advertising is going to be transformed by modern tech (especially AR/MR) in ways which I will not even try to predict.

And they still work — TV reaches 90% plus populations every month in most countries. And in growth-markets, with less sophisticated audiences, ad-viewing is normal, and belief in ads is often much higher than amongst more sophisticated audiences (Medium readers and Netflix viewing cable-cutters).

The problem is that the formats that have become the bread and butter of the advertising industry — their means to make money—will not survive the next ten years because of three clearly-visible trends:

  1. Tribalism based on identity will continue to increase in the near term. This means who's delivering the message will continue to become more important than what the message is. The “influencer” of today—often dismissed as narcissistic and even vapid—is about to eat the lunch of every model in town. While agencies continue to serve as a bridge between many brands and influencers — they will be disinter-mediated because a creative-director isn't needed to match-make between a brand and an influencer. And don't be surprised if you see an “Influencer-Director” in the team structure the next time an agency comes to pitch to you.

  2. Regulation will kill the effectiveness of programatic ad-buying. The GDPR is only the first sign of how governments across the world will reign in the willy-nilly gathering and sharing of personal data amongst media companies (who call themselves digital platforms). Programatic engines rely on this data to sell cost-per-click/conversion advertising models to brands. This will be matched by in-browser/on-mobile technology and user decisions that will prevent tracking and recording of personal information (identifiable or not).

  3. Publishers that rely on advertising as their sole source of revenue will atrophy, or add other revenue models. Click-bait headlines, branded content, and every other abuse of the public trust by publishers are here to stay, but will continue to lose credibility and, more importantly, traction amongst the high-value audiences brands covet.

These three trends will continue to drive down the value that advertising agencies provide — and there's very little the industry can do now.

As a sector matures, businesses tend to consolidate — some become larger by buying out others—till you have a few left who compete against each other for the largest portion of the pie, while young upstarts with great ideas keep popping up and getting bought out.

When a sector starts to shrink, companies consolidate — collapsing internal barriers, breaking silos, and do everything else they can to extract efficiencies and unlock value.

Famously, when Steve Jobs returned to Apple, he got rid of multiple products and simplified everything, making it easier to figure out what value Apple offered to consumers. But the real turn-around started when Jobs introduced the iPod. A new product. Not a variation, or an amalgam, but something entirely new.

The advertising industry has nothing new to offer. It will die.

I will miss it. And look forward to what emerges from the ashes.

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