The Challenge Before Ad Agencies

The Challenge Before Ad Agencies

Today, I used this plot below to explain to CEO of a top advertising powerhouse in Africa on the challenges before his industry. Before the dawn of ICT utilities like Facebook and Google, ad agencies and publishers were the gatekeepers of news. People need news for different reasons. And to reach people (the consumers), brands went to the publishers and ad agencies. The ad agencies have always worked as feeders to the publishers.

But with the arrival of the ICT utilities, a massive dislocation is happening: brands are now reaching customers without going through ad agencies and publishers. Power has shifted, and the most powerful entities are not the creators of the news, but those that organize and make sense of them, in a world with largely unlimited distribution channels, anchored by the web. If news breaks in Nigeria, everyone goes to Google and not the individual websites like Guardian and Punch. Even though Google ends up taking us to the most useful site, it does so (largely) without regard to legacies. Yes, my blog and Guardian will compete for attention before Google!

Simply, publishers and ad agencies are challenged as the monies brands used to pay move to Google and Facebook. This disintermediation is just beginning. Yes, as Google tests algorithmic contents where outdoor billboards will show contents based on what Android phones indicate are preferences of the majority of people seeing the ads, massive shifts await in the business.

Yes, a group of 30 football fans are returning from a game in a bus. There are other passengers in other cars. The algorithm has real data on coordinates of the phones as well as the location of the billboard. It can estimate how many people are seeing the contents displayed on the billboards. Once it can make a call that out of say 45 people watching, 25 are football fans, it will show ads that target football fans. Doing that will be the unification of meatspace and cyberspace advertisement; it will deliver unprecedented dislocation to ad agencies that do not evolve.

 

These are some fundamental videos you can watch to have deeper insights on this digital redesign.

 

 

LinkedIn Comment on this Feed

The dislocation or disintermediation isn’t just happening to ad agencies and publishers alone, individuals can now build their own brands the way they like; without any gatekeeper ‘diluting’ them on their behalf. Trump has maximised it, with his constant ‘battle’ with the mainstream media, most of his messages would have remained in the newsrooms, but with Twitter, you cannot ‘cage’ him.

Again, the presence of ICT utilities haven’t really led to loss of jobs on the side of publishers and ad agencies, rather the jobs SHIFTED. Currently, we have more people performing one digital ad function or the other, including analytics and algorithm development. It means that technology doesn’t actually lead to loss of jobs, rather it brings about changes in the nature of jobs. Only those who fail to understand trends and upgrade accordingly are left to rue their losses.

Humans have an unmatched level of dynamism, and therefore never expected to be obsolete like technologies. When you become redundant, it means that you are now being viewed as outdated technology. You must never allow yourself to get to that pitiable state.


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