When studying the theoretical ideals of any industry it is easy to get caught into a reasonable train of thought which is unjust to real-world case studies. This is the impression I received when reading the book by Laura Ries and Al Ries entitled, “The Fall of Advertising and the Rise of PR” (Amazon Affiliate Link). It is a book based on ideals and bias which, in my view, is poorly interpreted and instead shows the lack of understanding of the advertising industry by the authors.
“The fall of advertising” requires definitions in order for the argument to be clearly composed. We must ask:
- Which form of advertising has fallen (ie, failed)?
- What is meant by the word ‘fallen’?
- What is a company looking for from advertising?
I hope that this blog post assist to clearly serve my views on this matter.
The Different Forms of Advertising
Statistically online advertising is growing, this is also the form of advertising I have knowledge of due to my past role as a Multinational Account Manager at Microsoft. For this reason I will be focusing on online advertising rather than dipping into newspaper, magazines and television.
However I can say from the outset that newspaper and magazine advertising has failed in the sense of the complications of a poor economy and drop in physical media consumption. As circulation figures drop (especially in the case of physical magazines), it becomes increasingly difficult to place adverts in publications – demand increases and prices rise due to less issues being printed. Newspapers differ in this sense but can almost be disregarded entirely due to the shift to online news.
This is where online advertising steps in. Internet usage is constantly increasing and thus more ad placements are being made in order to monetise traffic websites and blogs are receiving. Top Network Advertisers such as Specific Media, Google, Yahoo and Microsoft are seeing the industry grow each year – indeed Google primarily make their profits from advertising (90% of their revenue stream) through their Google AdWords and Google Adsense tools.
Online advertising is not just about focusing on awareness but can clearly track sales of products. This is what the industry call “performance advertising”. A client will approach with a varying amount of investment which publishers will convert into sales of their product. CPA (Cost Per Action) tracking is commonly used for this goal.
Has Advertising really Failed?
In terms of advertising causing sales then, if measured correctly, has not failed. Otherwise major publishers would lose clients. Online Advertising is an industry based on ROI, if a publisher fails to deliver to client’s objectives then they will lose business. The mere fact online advertising is growing indicates that organisations are seeing their ROI.
It is true to say though that we are all become less influenced through advertising. When was the last time you clicked on an online advert? Tools such as AdBlock make it easy for consumers to block potential advertising by publishers. Even those who choose not to block online adverts will rarely click on them, hence a rough industry standard of 0.1% average CTR (this depends on a website’s audience, the graphics and the product/service). For a publisher’s advert to be effective then a website will commonly need a high amount of daily traffic (counted as impressions).
To say that online advertising is an irritant is quickly becoming untrue. Context analysing and re-messaging are two advertising methods which are used to ensure that a user only receives relevant advertising content. This can occasionally be beneficial to their web searching efforts. Ad Exchanges take this approach one step further by taking all the data about an individual and making split second decisions about which advertising content to serve on a particular page – this is currently the present and future of online advertising.
So if we have established that online advertising provides ROI and generates revenue to publishers then how can it be concluded advertising has ‘failed’?
What is a company looking for from advertising?
This is the deal breaker. If a company is simply looking to raise awareness of a product or service then online Public Relations (Social Media) should be their focus. Using certain analytic tools (I have written about a number of them in this post) then you can track how your online campaign is going.
If a company is looking to generate sales then take social media efforts with a pinch of salt. I wish you could clearly track sales from social media but it is a tough business. Social media specialises (in my view) to create and join in with online engagement. You may promote products or services through this way but it is near impossible to track individual sales from certain accounts.
As a student I am more than happy if my view on this is proven incorrect, I have yet to witness a factual case study to indicate that this view I currently hold is incorrect. There is no doubt in the a company will discover a way to track individual sales from social media but for the moment receiving a good ROI is based upon what an organisation considers their objectives to be.
The authors, Laura Ries and Al Ries, should spent time looking at modern online advertising and recognise it is just as part of the marketing mix as Public Relations. No effective campaign is ever PR or Advertising – they are regularly two different bodies of one marketing campaign.
(Side Note: It would be foolish of me to not take into consideration the experiences of both Laura Ries and Al Ries. Both of which are intelligent and talented individuals with advertising and PR experience. Yet I somehow become confuddled at their view in this 2002 book. Perhaps their views have changed now that advertising has vastly evolved over the last 9 years.)
What is your opinion?