Is advertising still effective?

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The Death of Advertising?
1 Introduction
In an increasingly competitive environment, many firms seek not only to make consumers
aware of their particular offering, but more importantly, to gain top-of-the-mind awareness.
The recent proliferation of electronic media, allows the marketer new and creative ways to
focus and direct specific information to any particular consumer at any time. One of the
trends in advertising and media today is the movement of advertising budgets from
traditional media toward various forms of online advertising (Forrester Research Inc., 2005).
This paper aim to discuss topic of “The Death of Advertising” where there is significant
reallocation of marketing budgets from traditional media advertising (above-the-line) to a
range of non-media communications options (below-the-line).
Traditional advertising focused on traditional media such as television (Chowdhury, et al.,
2007; Moorman, et al., 2007) and print media such as magazine (Malthouse, et. al, 2007)
and newspapers.
Non-traditional media advertising refers to forms of non-media communication options.
Ways of non-media marketing communication are, direct marketing, email, internet,
exhibition and etc.
2 Changing Trend to Non-Traditional Media Advertising
Technology advancements have opened up new media options that have seriously
disrupted traditional media markets and altered advertising business models (Al-Alchlai
2007; Ehret 2009; Shearer 2010; Vaina 2008). The shift from a product-oriented economy
toward a services-oriented economy also reduces the effectiveness of traditional advertising
approaches (Roland & Richard, 1994).
Data below presenting range of destinations for the reallocation from traditional to non-
traditional advertisement and the growth in Singapore and Asia. It provides clear evidence
of growth in non-traditional media advertising.

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2.1 Digital Advertising Grow in Singapore
Figure 1, according to Singapore Online Advertising Revenue Report (IAB 2011) showing
increasing revenue in non-traditional media (e.g. online advertising, display ads, search ads),
whereas revenue in traditional media (e.g. classified and directories ads) is decreasing.
 Online channels recorded a CAGR of 19% over the 24-month period ending 30 June
2011.
 Display advertising recorded a CAGR of 15% over the 24 months period ended 30
June 2011.
 Search advertising logged in a CAGR of 27% over the same period.
2.2 Asia Pacific 2nd in Digital Advertisement
According to eMarketer’s latest Global Media Intelligence Report (eMarketer, 2013), overall
Asia-Pacific will account for 27.7% of total media ad spending and 28.7% of digital
advertisement(ad) spending in the world, ranking it second for both types of ad expenditure.
Key figures of growth in non-traditional media usage and spending in Asia-Pacific from the
report include:
 Digital ad spending: $33.76 billion in 2013, up from $13 billion in 2008.
Figure 1: Revenue trending in Singapore Online Advertising Revenue Report (Source: IAB, 2011).

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 Mobile ad spending: $4.14 billion this year, up from $745 million in 2008.
2.3 Asia-Pacific Narrower Gap between TV and Online
According to PricewaterhouseCoopers’ (PWC) latest global entertainment and media
outlook, non-traditional advertising (mobile and online) spend in Asia-Pacific is set to
surpass US$52 billion by 2017, it is expected to rise at a compound annual growth rate
(CAGR) nearly 14% over the next four years (2013 – 2017). Figure 2 shows increasing
narrower gap between online and TV advertising and its’ CAGR from 2013 – 2017. Figure 3
shows decreasing advertisement spending (adspend) in traditional media (television,
billboard) from 2013 – 2017 (CampaignAsia, Aug 2013).
Figure 2: Online and TV advertising gap set to narrow in Asia-Pacific (Source: CampaignAsia, Aug 2013)
Figure 3: Adspend CACR across Asia-Pacific 2013 – 2017 (Source: CampaignAsia, Aug 2013).

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3 Companies Shifting Marketing Budgets to Non-Traditional
Advertising
Below are some examples of companies operating in Singapore or Asia reallocating their
budget in non-traditional media advertisement.
3.1 Uniqlo
Uniqlo shifted their emphasis from traditional marketing to online and social media to
create inclusiveness with consumers and potential customers. The award viral marketing
‘Uniqlock’ campaign designed to build brand awareness internationally, featured a clock
with spliced clips of well-choreographed dancing and catchy lounge music, 24/7 (Thorniley,
Tessa 2011).
‘Lucky switch’, a campaign to promote the retailer’s end-of-season sale, it turned the boring
banner advertisement on its head. The banner was blog badge (another widget) that
transformed any website into an instant-win Uniqlo lottery. To encourage blog owners to
install the widget, Uniqlo promised prizes to both the blogger and any visitor to a blog site
who flipped a winning ticket (Thorniley, Tessa 2011).
Uniqlo associate interactive catwalk in Uniqlo’s online retail sites alongside TV
advertisements. It created a personal fashion experience and a few clicks led through to
Uniqlo’s online retail stores for shoppers in Europe, China, Japan and Korea who had
spotted the models wearing something they liked.
By building a digital presence, Uniqlo is driving more consumer engagement, and deepen its
relationship with its customers.
3.2 Burberry
Burberry has dramatically reinvented its fashion shows as content-rich social experiences
that now engage millions of fans and interested consumers by leveraging the scale and
engagement of Facebook, Twitter, and YouTube.
Burberry streamed a live video feed of its fashion show on Facebook and YouTube. Burberry
also created the “Tweetwalk” by partnering with Twitter, an innovative, real-time social
media experience where every fashion show element was tweeted before the models hit

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the runway. Burberry provide “see it first” access ahead of everyone (Vollmer & Premo,
2012).
Its use of digital has transformed the whole business – customers can buy directly from its
digital catwalk.
3.3 Red Bull
Red Bull has masterminded a marketing strategy that is anti-traditional, spending less in TV,
radio or print media. Instead, their revolutionary approach prefers to create and organize
their own extreme events around the world.
Red Bull’s homepage, looks like an action-sports news site provides professional-grade news
articles, feature stories and videos each day, pushing them to social marketing channels
such as Facebook and Twitter.
The main Facebook page generally posts one or two updates per day, the wall posts contain
images and videos of extreme sports and athletes sponsored by Red Bull (Figure 5). You can
hardly find any image of a Red Bull can but the overall brand strategy is promoting itself as a
lifestyle choice rather than caffeinated drink (Moth, David 2013).
Figure 4: Theiconic,beloved fashionbrandembracestheWebandsocialmediato extendthebrandandengagewith
customersandfans inentirelynewways.(Source: http://www.salesforce.com/customers/stories/burberry.jsp)

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Red Bull also integrating mobile content with Facebook through mobile devices, keeping the
brand active on both web and mobile platform. It has several mobile apps available from
Facebook page and its’ website for iPhone and Android smartphone users.
Red Bull’s events are all social media relevant. Events are exciting and therefore increase
likelihood sharing the experience with their network. This amplifies brand credibility and
enhances brand visibility. #Spacejump #RedBullStratos #LiveJump #Stratos were all
trending worldwide on Twitter on Sunday, this is PR money can’t buy (McGuigan, Calum
2012).
4 Summary
Traditional media has been accused of being on its deathbed (Rust & Oliver, 1994; Rust &
Varki, 1996), while the internet is being lauded as a better communication tool due to its
versatility and superiority at targeting customers (Mohammed, Fisher, Jaworski, & Paddison,
2002).
4.1 Traditional Advertising Still has Its Role
Though the rise of non-traditional media advertising is clear in a fragmented media era,
consumers will ‘pull’ information when they need to. However, from the data of budget
Figure 5: Facebook wall posts focus on images and videos of extreme sports and athletes sponsored by Red
Bull. (Source: Moth, David 2013)

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allocation and spending presented earlier, companies are not shifting all their budgets from
traditional media but reducing its’ allocation. This shows traditional advertising still has its’
role. Wergin & Luller (2012) found that traditional newspaper is declining in effectiveness,
yet the research suggests that newspaper print advertising is provided a greater reach
compare to email advertising.
4.2 Online - Alternative to Traditional Media Not Clear
However, is the growth of non-traditional media advertising a result from cluttered
traditional advertising? According to Ha and Litman (1997), increased of advertising level in
traditional media reduce its’ effectiveness, and hence advertisers and media owners are
finding new ways to reach consumers.
In the face of the disruption of traditional media and advertising markets, advertisers are
finding it more difficult to reach consumers with their media messages. How advertisers
view online media platforms or whether they view online media web sites as a viable
advertising alternative to traditional media platforms, is not clear (Chao, et al., 2012).
4.3 Effectiveness of Online Media Subject to Effective Evaluation
While evidence for online media advertising is increasing and decrease in traditional media
is clear, the inability to effectively evaluate the benefits of new media may cause subjective
perceptions, and prior experience with media tend to dictate media choices rather than
economic rationality. Thus advertisers remain dependent on “tried and true” media buying
practices even though these routines are progressively becoming “old and useless” (Burton,
et al., 2011).
4.4 Insight & Measurement
Insights on how cross-media campaigns are using online and offline advertising to create
value for brands, however, are limited. Marketing and advertising community will need to
adapt to a situation wherein measuring and comparing the effectiveness of different
communication channels are becoming increasingly complex. Learning from different
fragments and experiences needs to be the everyday challenge for any marketer (Rubinson,
2009).

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5 Conclusion
5.1 Role of Advertising with New Media Should Not Change
There are endless and evolving new marketing communication options, Rance Crain (2011, p.
14), long-time editor of the major advertising trade publication Advertising Age mentioned
the more prevalent social media becomes, the less we know about the power of persuasion.
Advertisers don’t even know what the primary purpose of social media. However, Rossiter &
Percy (2013) proposed that the role of advertising has not changed. Its role is, and always
has been, “to sell more of the branded product or service, or to achieve a higher price that
consumers are willing to pay than would obtain in the absence of advertising”.
5.2 Right Mix
Though global internet advertisement spending has grown tremendously in the past few
years (Dinner et al., 2011), however, such a shift does not mean the traditional media
advertisement would fade away. The challenge ahead is the right mix in both traditional and
non-traditional to complement their advertisement strategy, with consistent information
throughout different medium. Many studies have indicated that online advertising works in
conjunction with TV, print, and other media to generate the greater increase in marketing
effectiveness (Karimova, 2011).

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