Advertising Is Dead

What if there were no more TV? FUTURELAB

Outline speech Bucharest Need kickass opener Advertising is Dead FUTURELAB

Actually…. FUTURELAB

We are Futurelab FUTURELAB

WE ARE FUTURELAB We create new profit opportunities for our customers. Our innovations and methods allow: • Marketers to become more effective & engaging. • Innovators to identify the next opportunity or niche. • CEO„s to connect their business to the customer. In the process, we challenge every barrier to business success. We dislike writing reports, billable hours or elaborate processes. Instead, we prefer to quot;get onquot; with making money for your business. FUTURELAB

Futurelab Structure Priviliged Relationships Athens – Barcelona - Brussels – (Bucharest ) – Johannesburg – Hamburg – Moscow – Kiev - Munich - Shanghai A flexible boutique: 2 partners – 3 support staff – 9 associates – 28 specialists/contributors

Last Year

Last Year 76% of consumers don‟t believe that companies tell the truth in advertisements Yankelowich,2006

Last Year “You can‟t bore people into buying your product – you can only interest them”

The Consumer is Tuning Out • In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G) • A US hour of prime time TV carried 21 minutes of advertising, Late Night network shows like Leno or Letterman carry 31:27 (TNS Media Intelligence, Q1 2006) • Big Six study (US): People with DVR‟s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%) • 78.2% of Germans are irritated by advertising, only 24% actually still watches it (GfK Marktforschung) • 85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.) FUTURELAB

Last Year “Today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities.quot; Jim Stengel, Global Marketing Officer P&G

Last Year Advertising Myths 1. Frequency is mostly not a driver for action 2. There is no golden rule about OTS

Last Year • 54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners)

Share of Voice?

Last Year Advertising is a tax you pay for unremarkable thinking Robert Stephens, CEO, the Geek Squad

Total Transparency • With total transparency, how can there be advertising? • Shotcodes in stores in Japan, telling you where to go to get the product cheaper • A fucked company example

Prices aren‟t what they used to be

Total Transparency

Lawyers

Doctors

Teachers

Most influential information sources in purchasing electronic goods? (TOP 3) Magazines 11,7% Source % In-store Sales Associate 49 CMO Council‟s Retail Fluency Report, 2005 In-store demonstration 36 Word-of-mouth from family & 33 friends Newspaper Coupons 25 Television 37,8% Internet 21 News- papers Product/Company Information 16 25,9% Retailer information 14 Radio Internet 8% Other 14 9,7% Magazines 4 Share of total adspend by medium (global) % TV 4 2008 forecast (March 2008) Radio 3 What are we focusing on? FUTURELAB

Now… People who live near train lines find ways to adjust to the noise ... Consumers have begun to treat encroaching advertising just like those trains.

Banner blindness 1998!

“Online video ads are quickly becoming the medium of choice to Online tactics in terms of ROI (2005-2007) drive both brand awareness and 57% sales.” SEO 45% 33% (2007) 44% Behavioral targeting 34% 36% 42% Email marketing-house list 47% 47% “With young adults now spending 34% on average six hours a week Paid search ads 49% 52% gaming, advertisers should be 21% Contextual targeting 29% excited at how well their 31% messages were embraced and the 10% Banner ads 12% brands positively perceived” 14% (2008) Rich media ads 7% 28% 38% 0% Pop-ups/pop-unders 15% 22% 23% 67% of marketers report they will Text-link ads 0% 0% increase their social media advertising budget in 2009 0% 10% 20% 30% 40% 50% 60% 2007 2006 2005

Contextual advertising ...has just died

• Advertising is dead – long live marketing Lets keep the patient alive a little longer

Procter & Gamble is placing radio- frequency identification tags on products at a Metro Extra retail store in Germany so that when a customer pulls the product off the shelf, a digital screen at eye level changes its message At least be the first! 

% of marketers advised by agencies to advertise in games/virtual worlds 62% % asked to start/increase viral marketing spend on social networks 87% % told by agencies to begin/increase viral video spend 93% Marketing Sherpa Ad:tech survey Lemmings?

The Advertising Technique Hype Cycle Isnt there a bit much? Hey, actually this is cool Hmm – what‟s this? Naah, cant measure it Sooo 5 minutes ago

Is it all over?

It‟s only just begun

FUTURELAB The Attraction Model

Attention Economy Reputation Economy

Relevance!

Relevance Engagement Reputation Reputation x Relevance x Engagement = $$$

Reputation Relevance Engagement FUTURELAB The Attraction Model

Reputation Experience Listening Customers

perception 80% of CEO‟s believe their brand provides a superior customer experience 8 % of their customers agree (Bain & Company) FUTURELAB

Online Reputation Romania FUTURELAB

The online reputation is just the tip of the iceberg But it can crash your boat Source: Forrester Technographics® - 2008 FUTURELAB

So Listen! Because if you don‟t listen...

“With regards to the recent Motrin advertisement, we have heard you. On behalf of McNeil Consumer Healthcare and all of us who work on the Motrin Brand, please accept our sincere apology. We have heard your concerns about the ad that was featured on our website. We are parents ourselves and we take feedback from moms very seriously. We are in the process of removing this ad from all media. It will, unfortunately, take a bit of time to remove it from our magazine advertising, as it is on newsstands and in distribution. Thank you for your feedback. It‟s very important to us.” Results 1 - 10 of about 11,600 from twitter.com for motrin. “hell hath no fury like a mommyblogger scorned”

Relevance Insight Communication Commerce

INSIGHT Understand what truly drives your customers FUTURELAB

• Podcast and map downloaded Commercial – yet relevant

FREE TIX TO GREAT ADVENTURE Heard a rumor you can get 2 free tix to opening day weekend at Great Adventure amusement park 45000 tickets gone in 5 hours

Relevance of Commerce

Downsizing

Engagment Engagement Move the funnel • Funnel Content • Content Recommendation • Recommendation

Buzzmarketing

Content wants to be free

How to control millions of inaccurate and divergent conversations ? YOU DON‟T Consumers are beginning in a very real sense to own our brands and participate in their creation … We need to begin to learn to let go. A.G. Lafley, CEO and Chairman of P&G, October 2006 (cc) Lynette Webb, 2006

„Help us choose‟

Let them improve your products

Let them build their own

Roll your own commercials

Second Life is soooo 5 minutes ago

What IS it good for ?

The Power of Recommendation

The Power of Recommendation 1955 1967 1983 2001 2007 Word-of-mouth is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising Marketing Science Institute, 2006 This is not exactly news....

How can we measure all this

HOW LIKELY ARE YOU TO RECOMMEND? Extremely Extremely unlikely likely 0 1 2 3 4 5 6 7 8 9 10 DETRACTORS PASSIVES PROMOTERS NPS™= (Promoters-Detractors)/Total Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation

Promoters make you more money -They spend more -They negotiate less -They stay longer -They are easier to service -They upgrade quicker -... Slide: Bain & Company, official NPS(tm) presentation Fred Reichheld. Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation

Activate your Fans

Must See

No, it’s not...

So get some people…

Where ARE the orcas? Who will be the First Penguin?

• Traditional compensation & other systems stand in the way • Creative and media work in isolation • Lack of experience with new media (not everyone went “dot-com”) • Venturing into uncharted territory = risky (even on a personal level) • Nobody really knows how things will evolve

General Eric Shinseki, Chief of Staff, US Army: quot;If you don't like change, you're going to like irrelevance even less.”

GO DO IT

• A deeper look at the model • How to improve the relevance of your mediamix • How to monetize WoM and Buzzmarketing • Social Networks more indepth • Net Promoter Score galore • Many many more examples and cases Tomorrow

The Element of Surprise

Http://blog.futurelab.net sko@futurelab.net if you want this presentation

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Advertising Is Dead

by Futurelab on May 18, 2009

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Advertising Is Dead — Presentation Transcript