Portions of today's report are excerpted from Jack Myers' best-selling book, Hooked Up: A New Generation's Surprising Take on Sex, Politics and Saving the World.
An Adweek study of marketers finds that 77 percent believe the days of traditional media channels are numbered; 68 percent say they need to shift their reliance on broad-based media to more of a one-to-one focus; and 73 percent believe the days of strategic consistency are over and that future marketing campaigns will need to emphasize inspiration and engagement. Nevertheless, their actual spending patterns are just beginning to reflect this strategic shift. For the most part, the advertising business remains entrenched in models and practices that are unchanged since television was introduced in the 1950s. The industry still relies on systems that have been in place since the beginning of the newspaper business in the 19th century. The industry is responding to digital expansion, but not quickly enough.
Jack Myers Media Business Report forecasts that U.S. digital marketing communications investments will increase from $52 billion (9% of marketers' total communications budgets) in 2011 to a projected $170 billion in 2020 (30% of total marketing communications budgets). By 2030, digital marketing will capture 60 to 70 percent of all spending. That does not mean traditional media companies or agencies will disappear, although many will. Companies that thrive will be those that embrace digital media and hire young Internet Natives who inherently understand and relate to the marketing power of the Internet. Legacy media companies that make a quick and intelligent transition to socializing their content will survive.
Advertising is shifting its focus from mass media to the individual; it is interactive and needs to be engaging; it connects consumers directly to additional information and purchase; it is being tracked on a micro-second by micro-second basis with patterns of behavior and marketing results far better understood and utilized; it is mobile, social and online; it is global and hyper-local.
Rather than sending coupons en masse to millions of consumers through Sunday newspaper inserts or mailed coupon packets, marketers will integrate special offers into online consumer conversations that are relevant to the product being marketed. In addition to inserting commercials intrusively into mass-distributed television programs, marketers will shift budgets into curated content that relates to their product category and that engages consumers in an interactive relationship.
The shifts away from traditional advertising and marketing will be profound. Most marketers are struggling to adjust to these radical and challenging shifts, but they are obvious realities to Internet Pioneers, the first generation to grow up with the Internet as an embedded part of their day-to-day life. For communicating with Internet Pioneers and the generations of Internet Natives that follow them, the Internet and connected mobile devices will be the most important marketing tools.
As Internet speeds accelerate exponentially over the next few years, online and mobile video viewing will become the norm, although traditional television network programming will continue to dominate the viewing experience. All media will require applications and interactive two-way options for social interaction and commerce, plus content and gaming enhancements. Second-screen content synchronized with television and videos is tailor-made for an already active online audience that's primed to jump in if the content is worthwhile and access is simple. This technology already exists, and every leading television network is already producing for multi-screen interplay. As all content is becoming more social, mobile and interactive, the underlying principles that have guided media for the past five to six decades are being restructured.
Back in the 1950s, the introduction of the credit card dramatically changed marketing and retailing. Today, credit card-linked deals let consumers embed coupons and special offers directly on their credit cards to be used at the point of purchase. Discounts are automatically applied when the consumer buys a specified product or service. But even the credit card will disappear, displaced by mobile devices with embedded RFID chips and visual scanning. These radio frequency chips will have the capacity to connect directly with responsive chips attached to displays, billboards, kiosks, and products. Discounts will be offered and accepted on mobile devices. WiFi technology will link consumers' mobile and other devices directly to television, radio and online commercials. Looking further ahead, similar chips will be embedded in your body for communication or other applications - similar to embedded identification and medical chips already in use. As chips and mobile devices become the primary distribution vehicle for coupons and special offers, print media will become increasingly moot except as specialized upscale vehicles for enhanced content presentation and as parts of memorabilia collections.
Marketers will require strategists, creative teams and media experts who are truly immersed in the digital world and who understand the challenges of digital marketing, and that means hiring recent college graduates - and even younger interns and apprentices - and empowering them to influence advertising strategies, messages and communications tactics. Yes, marketers will need to retain experts in legacy marketing as they transform their operations and emphasize digital strategies, but the two distinct practices of legacy and digital marketing will be progressively intertwined and interdependent with digital quickly gaining prominence and priority.
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