Advertisements have been present in the media for over a century. With the decline of television and the growth of ad rejection in younger generations, advertisements have to adapt rapidly, or they risk becoming obsolete.
There is consistent development of the digital industry and the rebranding of traditional forms of media. These mean that advertisements are facing an unsure future.
Theri goal is to survive in the everchanging world. One first has to look at the process of creating advertisements, the psychology behind them and their historic value. Then, one needs to understand the obstacles facing the industry to know how to overcome them, or if the industry even can.
How are advertisements developed?
Advertisements: the first step is to recognise their objectives. From there, research on the market determines decisions on the target audience. This, in turn, decides the medium of the advertisement to ensure it reaches the correct people.
The budget is set and the ad is made. An outline of the ad is produced by the copywriters of the agency. This happens before the ad is brought to life by the creative team of the advertising agency. After screening and perfecting the ad, it is released to the market.
According to The Encyclopedia Britannica, the size and composition of an audience are the most important factors for advertisers when considering a television or radio program. The broadcaster charges the advertiser based on the size of the audience. Additionally, the composition determines who the advert will reach. If the advertisement is aimed at a certain demographic, that will impact when and/or where it’s run.
For a company to run an ad, it can often take upwards of four hours just to film a 30-second TV spot, not including the pre- and post-production. However, ads on platforms like YouTube or Facebook require fewer resources and planning. Forbes broke down the largest mistakes in Facebook advertising, finding some of the biggest issues to be too much text and images that weren’t optimised or eye-catching. When compared with the intensive process of TV marketing, online ads are less time consuming and far more accessible.
Marketing strategies in advertisements
One of the most crucial choices in creating a marketing strategy is a consistent core dilemma. Does one show the advertisement to a large group a small number of times? Or does one show a small group but a large number of times?
Old Spice, a company well known for its advertisements, took a very unique approach. In 2010, it produced a series of personal responses to questions asked by fans on Twitter. They did this following the success of a Super Bowl advertisement. In 48 hours, it amassed nearly 11 million views.
The marketing agency Wieden & Kennedy had a simple tactic for their viral campaign. They kept their YouTube videos short and went for quantity over quality. In 2010, Jason Bagley, the company’s creative director said: “People don’t generally want to sit through long things.” Shorter videos have the ability to connect directly and more widely with the consumer.
The first television commercial aired in 1941 for the Bulova Watch Company, and reached around 4,000 people in New York. What followed was a drastic change in the way companies reached consumers.
The 1950s saw sponsored programs like The Colgate Comedy Hour and presidential campaigns. The first ad for a children’s toy, ‘Mr Potato Head’, became a classic. 1984 saw Apple make $155 million in sales the three months following the release of their first commercial.
The streaming era of the 2000s, initiated by Netflix, contributed to the collapse of companies like Blockbuster. In the same year, another streaming platform, Hulu began offering different plans. They allowed customers to decide if they wanted ‘Limited Commercials’ or, for a higher fee, ‘No Commercials’.
The rise of internet platforms
Founded in 2005 and later acquired by Google for $1.65 billion, YouTube launched its first ad concept in 2006. According to The Atlantic, between 2010 and 2011, “the number of advertisers using display advertisements on YouTube increased tenfold”.
In 2015, a survey of 120 ad agencies found that 72 per cent said that online ads were as effective if not more than television ads. The same survey found that 60 per cent expected mobile video adverts to see the largest increase in digital media spending, as opposed to 27 per cent for TV.
Media Analyst Michael Nathanson wrote in 2018: “Looking at the composition of long-term US ad growth, it becomes evident that the rise of Internet and digital has come at the expense of traditional media.”
Traditional media and advertisements have lost traction
Between 2000 and 2015 alone, the revenue from print newspaper advertising fell by nearly 70 per cent. Despite this, online articles titled ‘Print vs Digital: 4 Reasons Why Print Advertising Still Works‘ and ‘3 Reasons Why Print Advertising is Still A Lethal Weapon‘ are plentiful across the internet, the issue therein being that these are essentially advertising for print advertisements online. It is discrediting the point which it is making.
Printed newspapers begin and end with advertising. In 1835, the New York Sun had 20,000 readers, but the product being sold wasn’t the paper itself. It was the reader’s attention. The penny cost of the paper wasn’t enough to cover production costs, relying instead on revenue from advertisements. Much like print, radio also relies heavily on advertisement for funding.
“Let’s not forget, though, that AM radio is still a popular and effective mass medium. New media will never fully supplant the old guard,” said Mitchell Reichgut, the CEO of Jun Group, an Adtech company in August of 2017. Not even a week later, a study by Musonomics had something very different to say.
The report, led by Larry Miller, director of New York University’s Steinhardt Music Business Program, highlighted radio’s downward spiral. Losing both audience and advertisers, the future of radio is far grimmer than Reichgut would acknowledge. A key reason for this is that the ratings are not accurate within local markets. The ratings for mobile and digital platforms that offer the same services are. Miller adds that radio needs to be a “more communicative experience in line with millennials and other younger generations”.
Views – not viewers – in modern advertisements
Television has long seen a decline with the emergence of streaming platforms. Netflix, Prime Video, and, most recently, Disney+ have become major obstacles. Most major brands and channels developing their own (generally) advertisement-free platforms. This means that cable television is struggling to keep up.
Part of the reason for this is the same issue radio encounters: a lack of data. Digital advertising shows far more than just that an ad was aired; it shows who saw it, how, and if they eventually went on to purchase the product. This data ultimately helps advertisers to determine if their product is reaching the right people and being bought.
The predominant issue with advertising on these older platforms likely isn’t the advertisements themselves. The reason is that people simply aren’t seeing them anymore. In some cases, this is due to the ease of digital platforms, but mostly, it’s intentional.
Advertisement averse younger generations
With each new generation, comes a greater aversion to ads, both traditional and digital. A trend especially prevalent with millennials, 84 per cent of whom do not like or trust traditional marketing. Favouring YouTube and live-streaming, millennials were found to respond more favourably to short introductions or product placements.
Ebiquity, an independent marketing and media consultancy, released a report stating: “For 18-24s, even with a predicted slowdown in the rate of decline, more than half (56 per cent) of today’s audience will have disappeared by 2025”, in reference to TV audiences at the end of 2019. This follows the current trend of older forms of advertisements. They either don’t connect with younger generations, or fail to reach them altogether.
Moreover, it’s not just traditional media that younger generations are averse to. According to a 2017 study, 69 per cent of the Gen-Z audience are “likely to physically avoid ads”. The increase in dislike for advertisements between Gen-Z and millenials is easily showcased. Gen-Z skips ads 3 seconds earlier than millenials. Moreover, Gen-Z is adept in using ad blockers. They have been heralded “an increasing problem for brands” as it can interfere with targeted ads.
WordStream, a website for online advertising states: “Tracking is vital! Nearly 95 per cent of advertisers use Google Analytics in some capacity to collect and sift through data”. Data is a vital part of why digital advertising is so rapidly outpacing TV and radio. It’s easier to track.
Sundar Pichai, chief executive of Google’s parent company Alphabet, told the BBC: “We see that as a big opportunity and are investing for it”, referring to YouTube adverts and increasing targeting. The final 2019 quarter was lower than expected. “The core businesses, like Search and YouTube, continue to generate prodigious quantities of cash,” he added.
At the very core, that is what advertising is all about: how to make the most profit. By tracking online movements on Google’s search engine and across YouTube, Alphabet has cornered the market on digital advertising as it continues to provide what traditional media can’t: an audience’s attention.