The Software Society

How digital technology is changing our culture and economy

The end of advertising?

Advertising is clearly struggling with the digital era. Consumers are fast-forwarding through ads in recorded TV shows and largely ignoring ads on web sites. Print ads get seen less as readers increasingly get their content from digital sources.

Mobile phones in particular add to the challenge with their small screens and the impact on download speed of a web site with ads. The problem is compounded with ad blocking software.

The changing environment requires more than evolution by advertisers—it requires revolution. I’ve often wondered why, in an age where there is so much competition for our attention, TV advertisers will spend buckets of money on a short TV ad that may even be interesting or entertaining the first time seen, but then pay to show the same ad over and over. Doesn’t that just motivate recording shows so you can fast-forward? And “targeted” web ads, chosen by your past browsing history or the page you are on, often try to sell you something you already own. Most fundamentally, the current advertising model is flawed in an age where there is so much competition for our attention from content on the web and social media.

Rather than throwing ads at consumers and seeing what sticks, advertisers must engage consumers. They must find a way to get consumers to “opt in,” to come to the ad and stay engaged. In fact, companies must go further and not separate advertising/marketing from any customer contact, even when the customer contacts customer service through a call or web chat. When a customer volunteers to talk to a company, the company should attempt to engage the customer in a conversation, not get rid of them as quickly as possible (the typical gauge of success in customer service).

Language technology, including speech recognition and natural language understanding, has passed a tipping point of utility and could support such an engagement through longer automated conversations. This takes work and may require that development of the content receive the same budgetary support as advertising does. US mobile advertising expenditures alone are projected to rise from $29 billion this year to over twice that by 2019.

A company conversational application is more like an advertising campaign than a single advertisement. It can begin with relatively limited content, and add content or information as the company sees how customers respond, e.g., asking questions about a product or service. A limited application that motivates customer adoption by clever content can evolve into a company-specific digital assistant, even becoming an alternative (or supplement) to a web site.

Advertising agencies have access to the creative talent required to make such a conversational app engaging. And it’s an advertisement that can be different every time it’s invoked.

Using human (“natural”) language can make interaction with the digital assistant quick and intuitive. When the interaction is by voice rather than text, it can be quick and the application can have more personality. And companies shouldn’t call it an ad—give it a name and call it the company’s personal assistant, there to help (and perhaps entertain) you. It’s not a one-time exposure, but a continuing engagement.

Gene Phifer, a vice president at research organization Gartner, speaking at a recent conference in a more general marketing context, claimed, “We’re evolving from a product-centered economy to an experience-centric one.” Whether it is selling to consumers or to other businesses, he said, “this is how you will make money going forward.”

Unfortunately, it does not appear that this convergence of advertising and customer service will be easy for most companies and advertising agencies to adopt. It doesn’t fit how things are done today. Among other difficulties, there are silos in most companies that can discourage even launching such an effort. For example, the customer service organization and the marketing department of most organizations seldom talk to one another—if at all.

The nature of a conversational application is that it is difficult to discover fully how a consumer will react until an application is launched. Thus, the most successful launches will be gradual, with multiple iterations of the application content and natural language processing. Again, this is not typical of how ads are handled, and will again require some changes in approach by marketing groups and ad agencies.

Is advertising dead? No, but it must be reinvented.

Leave a Reply

Your email address will not be published. Required fields are marked *