Dissrtation. New media platforms

Before Now

Are new media platforms threatening the advertising industry?

Carla Ibáñez Barquet

MA Advertising October 2011

Top Copy

Bucks New University Faculty of Design, Media and Management MA Advertising Are new media platforms threatening the advertising industry?

Carla Ibáñez Barquet Student ID: 21104206 VMC Tutor: Helena Chance Date of Submission: 3rd October 2011 Word count: 8.502 Module number: ADM02

CONTENTS

Introduction ........................................................................................... 1 1. New media and what is new in advertising and why? …………….... 3

a) Case Study: Tesco Homeplus ………………………………….… 4 1.1 Social Networks madness ……………………………………………... 8

b) Case Study: 3 wolves T-shirt ……………………………….….…. 8 c) Case Study: 13th Street Universal ………………………………. 10

2. Do people engage with advertising differently using new media?...................................................................................................14 2.1 Democratization of information ………………………………………. 14 2.2 Is Internet empowering us? ………………………………………...… 15 2.3 Shift on peopleʼs behaviour …………………………………………... 18 2.4 Consumers are empowered ………………………………………..… 20 2.5 How people engage with advertising? ………………………………. 21

d) Case Study: Glasses Direct …………………………………... 22 2.6 We will be googled… ………………………………………………….. 24

e) Case Study: Nike – The Girl Effect …………………………... 27 3. Changing Business models: compare new companies with

traditional advertising agencies ....................................................... 30 3.1 How media is affecting the advertising industry? …………………... 31

f) Case Study: Heineken Star Player ……………………………. 33 g) Case Study: Kleenex – Let it out ……………………………... 35

3.2 New advertising business models ………………………………….… 36 3.3 The new advertising landscape …………………………………….... 37

3.4 So are new media platforms threatening the advertising industry?.. 39 4. Conclusion …………………………………………………………………. 41 5. References

Bibliography ……………………………………………………….... 43 Webography ………………………………………………………… 44 Picture Credits ............................................................................ 47

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INTRODUCTION

My iphone is responsible for waking me up every morning and it is also the last thing I use before going to sleep. Google is my dictionary, encyclopaedia, GPS, bank of

knowledge and an entertainment source. YouTube, Megavideo, TED, etc are my TV. Amazon is my bookshop. Barclayʼs Online Banking helps me to check all my money

movements and track my transactions too. Facebook is part of my social life, a way of

being connected with my friends, but also with my job and studies. My personal Blog is a virtual space where I can express my opinions and share my thoughts. Skype allows

me to see and chat with my parents every evening before dinner. Therefore, I can say that my computerʼs or smart phoneʼs screen are the window that I am always staring at,

and I can interact with them.

The range of media available to us is getting bigger and bigger; in other words the meaning of the word media is nowadays wider than before. This project will analyse

new media platforms like social networks, mobile technology, the outernet, apps, Youtube, Google, etc because they are responsible for the changes in peopleʼs

behaviour and as a consequence, a change in advertising. This project aims to discover if new media platforms are threatening the advertising

industry, the changing business models, how societyʼs behaviour has changed and predict a possible future for the advertising industry based on the new media platforms

and the digital impact. This dissertation will compare the traditional model of an advertising agency with the new digital agencies or production shops. Questioning the

old and interrogating the quality of the new it will try to discover which future holds for the advertising industry.

By conducting research into this field and finding out more about changes produced by

digital impact I intend to create an awareness and explain my opinion of what the

consequences are going to be and how this is going to reshape the future. That opinion will be sustained with primary sources as interviews to professional advertisers working

in the industry now, the ones who are facing the changes.

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The outcome of this dissertation will provide the reader with a theoretical and practical

understanding of how new media platforms are changing peopleʼs behaviour and which direction is advertising taking to reshape the future industry.

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CHAPTER 1 New media and what is new in advertising and why?

Despite the fact that all those technologies seem essential right now, we cannot forget

that it was in 1991 when Tim Berners-Lee invented the World Wide Web and in 1993 was accessible for people to use. Gradually the importance of the digital technology

has grown to the point that it is now an integral part of our lives and we trust it in so

many different ways.

To begin with, we can say that people nowadays is not only using the Internet as a tool, actually digital technology is changing peopleʼs behaviour. A proof of that is the fact

that the majority of under-25-year-olds chat to friends on social networks via their mobile phone while watching TV, according to a study by the marketing agency Digital

Clarity. Of the 1,300 UK people surveyed, 80% said they use their mobiles at the same time they are watching TV, while 72% use social networks to communicate with others

on their mobile phones. The study identified Facebook and Twitter as the most used social networks.1

Advertising has to be aware of the subtlest of changes in society and as we can see in the results of that study, we are facing a dramatic change of habits and lifestyle. The

digital departments of the advertising agencies are now as important as the others and even digital specialized agencies have been created.

As the Internet started developing we could perceive that what it was actually doing

was concentrating all the media and ways of communication in one single device. Digital combines photos, music, data, video, social network, etc. For example mobile

technology integrates everything in one singles device. This new media platform is clearly successful and the introduction of apps is one of the keys of this success. The

advertising industry is facing a big opportunity to reinvent the traditional ways of

approaching the customers. With Smartphone apps brands will have a whole personal new channel to get to their consumers. Brands like Tesco Homeplus are already using

this platform in a revolutionary way.

1 http://www.digital-clarity.com/ a specialist digital marketing agency that polled over 1300 people under 25 from a cross section of the UK.

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a) Case Study: Tesco Homeplus

Tesco in South Korea is called HomePlus. They needed to overcome their main

competitor: E-Mart. So their mission was becoming the number 1 without increasing the number of stores. Korean people are the second hardest working people in the

world so they decided to approach these busy and tired people letting the store come to the people. They created virtual stores in the subway. The display looked exactly like

the one in the supermarkets and each product had its own QR code. People just had to

scan the codes and the product was landed to their online cards. After the online purchase is done the products were automatically delivered to peopleʼs houses. The

results were clearly positive: The number of new registered members rose by 76% and online sales increased 130%. Homeplus became the number 1 in the online market,

being very close 2nd offline.2

Fig. 1 Korean boy purchasing an item scanning a QR code with his phone.

As we can see mobile technology is developing faster and getting into peopleʼs life

trying to become indispensable. An interesting statistic found online says the average of Smartphone user spends 667 minutes a month using apps. But what is even more

shocking is that in 2010, 5 million apps were downloaded and experts predict that 21

million apps will be downloaded in 2013. The info graphic below shows in detail: 2 http://www.youtube.com/watch?v=fGaVFRzTTP4

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Fig. 2 Statistic that shows the state of the mobile app world. Detailed Top smartphone platforms and Top mobile phones. It also estimates the increase of downloaded apps in

the future.

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Fig. 3 Stats showing highest rated apps, Top apps stores, Top mobile app categories

(USA) and Top mobile categories for 2012.

Meanwhile communication is changing from broadcasting to ʻnarrowcastingʼ. Previously media was ʻpoint to multipointʼ, that means companies were the ones who delivered the

message to the public. Now we are talking about ʻpoint to pointʼ communication, which means companies launch a message and it goes from one to another, there is a

response, an opinion. Digital creates dialog and mass media is becoming personal.3

3 Martin Runnacles workshop, 17th January 2011

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Fig. 4 The graph pictures the different relationship between broadcaster and consumer.

So the most important change that communication has experienced in the commercial

world is going from one-way communication to ʻpeer to peerʼ communication. This means that groups of individuals are coming together to share, cooperate, and

even to organize collective actions with common purposes. That fact has always

happened in social now but now is happening in a commercial context.

Clay Shirky wrote in Here Comes Everybody: “When we change the way we communicate we change society 4 and thatʼs exactly what is happening. New

generations decide their plans on Facebook, make the supermarkets come to their places, never check the route to go to a place because they have an iPhone with

Google maps, show their work online and even run their business through the internet. But more importantly, new generations have a voice at the same level as others, a

digital voice that makes brands react and advertising change.

An example of creating new business through the Internet could be Amandaʼs Hocking

case: she is a 26 years old writer who has been able to sell about 1,000,000,000 books without any help. During a few years she tried to publish her books through a literary

agent but the result was unsuccessful. So she decided to sell her books directly on the Kindle shop (available in Amazon), and as thereʼs no middleman, except the platform,

she gets the 70% of the benefit. As a result of that, Amanda has become the most

4 C Shirky, Here comes everybody, Penguin Books, London, 2008, p. 17

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popular independent writer in Amazon, selling 100,000 copies per month, achieving

revenues of about $1,400,000,000 USD since last April 2010. 5

1.1 Social networks madness

Social networks have become a really powerful and influential media platform. The next case study proves how peopleʼs behaviour is changing and the importance of this

platform.

b) Case Study: 3 wolves T-shirt

Fig. 5 Wolves T-shirt that became Amazonʼs bestseller.

This T-shirt became the Amazonʼs bestseller thanks to a funny comment made online by an Internet user. According to Russell Dicker, a spokesman from Amazon, the sales

of the item raised 2300%.

5 http://www.businessinsider.com/amanda-hocking-2011-2

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In 2008 Brian Govern a student from Rutgers University posted a satirical comment

about the T-shirt, highlighting that one of its attributes was the power of attracting women. Thanks to www.collegeofhumour.com his comment went viral and more than

750 people have posted their own outlandish comments about the T-shirt. 6

Brands must adapt themselves to those changes, for example, Heinz made a limited-edition flavour of tomato ketchup available exclusively through Facebook, making it the

first food brand to sell a product via social network. There were precisely 1,057,000

bottles of Heinz Tomato Ketchup with Balsamic Vinegar, which Heinz said was its first limited-edition product. 7

Fig. 6 Screenshot of Heinz Facebook page launching its limited edition Ketchup with

Balsamic Vinegar. 6 http://abcnews.go.com/WN/story?id=7690387&page=1 7 http://www.telegraph.co.uk/foodanddrink/8361796/Heinz-tomato-ketchup-with-balsamic-vinegar-a-review.html

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Tim OʼReilly, computer book publisher talks about his vision of the future saying that till

now we had Web 2.0 but the future is Web 3.0, which involves people forgetting they are using social networks, services and the Internet as consumers. People are creating

the web but without being conscious that theyʼre actually doing it. ʻOur phones and cameras are being turned into eyes and ears for applications,ʼ 8 O'Reilly has written.

Thatʼs because “virtual” and “real” are now practically united in a sense of perception. A campaign made by the agency Jung von Matt/Spree in Berlin shows a completely new

way of communicating lowering the boundary between digital and real. They were

trying to advertise the new 13th Street Universal and they wanted to engage people with the thriller genre, the result is ʻThe Witness the first movie in the ʻOuternetʼ. The

concept ʻOuternetʼ, created by the German marketing firm TrendOne, means that Internet is no longer subject to the screens because it has merged with the outside

world. 9

c) Case Study: 13th Street Universal – The Witness In 2011 NBC Universal launch the new 13th Street Universal so the challenge was get

the audience engaged in the genre of thriller and crime like never before. The solution was ʻThe Witnessʼ, the first movie in the Outernet. Viewers of all over Germany applied

on their website to be part of this exclusive event.

8 Article The Guardian by Oliver Bukerman, 15th of March 2011 http://www.guardian.co.uk/technology/2011/mar/15/sxsw-2011-internet-online 9 http://www.youtube.com/watch?v=Yis6is8v9jA&feature=related

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Fig. 7 Screenshot showing the website where users could register themselves to play

The Witness.

The Witness begins in a hotel room in Berlin; they have to safe Nadia a prostitute from the Russian Mafia. Using augmented reality technology, with GPS and special software

they developed for the iPhone, viewers can experience a real life film directly at the crime scene. Everything begins when Nadia is kidnapped, then viewers turn to be part

of a thriller. The Witness will take the viewers through a journey all over Berlin. The

smart phone becomes an essential tool in order to stay in the game. They will have to take important decisions and depending on those, one can be or the hero of the film or

the next victim of the Russian Mafia.

Fig. 8 Player using augmented reality technology with his phone.

On the other hand, nowadays every agency is concerned about the importance of digital and social networks and it looks like something new, but it will soon become

conventional, as it is already part of our lives. If digital becomes conventional, advertising should start thinking about using it as a tool to make better-integrated

advertising and increase effectiveness.

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Advertising should be about what you do, not what you say. Itʼs good to use digital

technologies as a media because of the speed, coverage and engaging capacity, but we have to think laterally. A Facebook page and a blog is not enough for a good brand

communication or advertising campaign. For instance, the Chalkbot Nike campaign made by Wieden+Kennedy shows those ʻthinking differentlyʼ attributes that I want to

refer to 10. They are using the road as a canvas (real action) and people can send their messages to be written on it and that is the engaging factor (digital technology).

Fig. 9 Road with peopleʼs messages. Fig. 10 Machine responsible for the

paintings

As Patrick Collister, ex Creative Director of Ogilvy, said in a conference on March 15th

2011: “People want ideas they can take part of, not messages anymore.” If you only use the Internet in order to raise awareness and influence the consumer,

then you are forgetting the real utility of the web: to enable networks where people with the same interests can share and cooperate for a common purpose. The challenge that we have to face now is how we can more easily control whom we

want to share this information with. For example Facebook is an easy way of

10 http://www.youtube.com/watch?v=HmW-eGCrSxs&feature=related

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communicating and moving information but we need help managing our connections

and selecting and controlling the information that we want to send to a specific person. Whilst reading blogs I came across a sentence that sums up this argument: “The social

networking site that will do for the connections among people what the Web has done for the connections among sites is awaiting its own Tim Berners-Lee.” David

Weinberger, co-author of the Cluetrain Manifesto 11, has written.

In the future the process of creating networks, advertising campaigns and

communication should be integrated and interactive. Most probably advertising will increasingly have to sell experiences instead of products and the former will have to be

mutually beneficial, satisfying the values of the brand but also the people that the brand wants to connect with. They will have to connect people with mutual interests and

engage them to our work. Make them participate; feel passionate about it in order to be more effective and create a community of likeminded people.

The point of developing relationships in branding has been extensively discussed. For example Guy Kawasaki, one of the original Apple employees responsible for marketing

the Macintosh, said: "Many companies waste millions of dollars trying to establish

brands through advertising... Brands are built on what people are saying about you, not what you are saying about yourself. People say good things about you when 1) you

have a great product, and 2) you get people to spread the word about it." 12

Furthermore, integrated communication will also affect physical devices such as TV, Radio, Computer, etc. Integration is the future. That means that homes will most

probably have one single device from which you may perform all the former functions.

11 The Cluetrain Manifesto is a set of 95 theses organized and put forward as a manifesto, or call to action, for all businesses operating in a new connected marketplace. The book tries to explain the impact of the Internet on both consumers and organizations. Rick Levine, Christopher Locke, Doc Searls, and David Weinberger worte the manifesto in 1999. 12 http://www.allbusiness.com/company-activities-management/product-management-branding/11736449-1.html#ixzz1XlPkUOcW

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CHAPTER 2 Do people engage differently with advertising using new media?

This chapter is about new media and its effects trying to analyse the actual technology

outlook. Another point will be how advertising is directly affected by those facts and some examples will be given to support the arguments in a more practical way.

2.1 Democratization of the information

We live in fragmented times with an excess of information. This overcrowded world makes competition a usual thing therefore people have a vast choice of products and

tones of information thrown at them. Information that is intended to help them to make decisions gives them support and makes their lives easier.

Jay Adelson, CEO of the social content website Digg, in an article of The Sunday

Times gives a good definition of what is the democratization of information:

“Just like in a democratic society, the democratisation of information means that

content and information, from news stories to videos to music, get prioritised by the collective vote of the internet community. I think of democratisation of information to

mean that every bit of information or content on the web has the same opportunity for exposure or discovery as every other piece of content. Thus, for example, an obscure

blog or podcast has the same chance of exposure as a Wall Street Journal article. I also take the democratisation of information to mean that everyone can have a voice in

what is deemed important or relevant or entertaining, versus only a few people making those decisions on our behalf and filtering what we know about the world through their

own biases and view of how things should be.” 13 So democracy is applied in all possible levels. Brands have now to be aware of what

they say and how they act because consumers have a voice and they will probably reply. Social networks are a new media platform where those conversations between

brand and consumers can take place.

13 J Adelson, CEO of Digg, article The Sunday Times. http://business.timesonline.co.uk/tol/business/related_reports/business_ideas/article3364558.ece

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Charlotte Mceleny, journalist for Campaign magazine, said in one of hers articles that a

recent research has revealed only a small minority of people complains to brands via social media. But brands cannot ignore the channel, as it will become the most

important customer service tool. What is true is that before calling to an expensive number people will eventually use

more and more social networks as a tool to communicate with brands. And if Smartphones allow people to be online everywhere they go that will increase the

effectiveness of the customer service.

The research on Mcelenyʼs article did reveal that of those who had complained via

social network, only 40% had received a quick response. That means that more than a half of costumers were unattended.

“Actively complaining is something carried out by the minority regardless of what

technology is involved. Whatʼs crucial is that this minority isnʼt ignored.” 14

Brands need to start investing on social networks the same resources they invest on

phone and email customer service; otherwise their image can be increasingly

damaged.

2.2 Is Internet empowering us? “Infinite monkey theorem: Huxleyʼs theory says that if your provide infinite monkeys

with infinite typewriters, some monkey somewhere will eventually create a master piece – a play by Shakespeare, a Platonic dialog, or an economic treatise by Adam Smith.” 15

Andrew Keen compares what it seems a joke to now foretell the consequences of a

culture that is blurring the lines between traditional audiences and author, creator and consumer, expert and amateur. So we can compare Huxleyʼs theory with our Web 2.0

World where the monkeys are the Internet users and the typewriters, personal

computers. And instead of creating masterpieces “they are creating an endless digital forest of mediocrity.” 16

14 Charlotte Mceleny at Campaign magazine http://www.nma.co.uk/opinion/social-media-will-be-a-key-customer-service-channel/3019722.article 15 A Keen, The cult of the amateur, Nicholas Brealey Publishing, London, 2009, p. 2 16 A Keen, The cult of the amateur, Nicholas Brealey Publishing, London, 2009, p. 3

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The Internet has brought democratization to our culture but that doesnʼt necessarily

mean itʼs positive. “The cult of the amateur has made it increasingly difficult to determine the difference between the reader and the writer, between artist and spin

doctor, between art and advertisement, between amateur and expert. The result? The decline of the quality and reliability of the information we receive, thereby distorting, if

not out rightly corrupting, our national civic conversation.” 17

For example sometimes, citizen journalists are able to give something traditional

journalists just canʼt because of money and time constraints. During the tsunami in 2004, Bloggers were able to give better information than some news agencies because

they were on the scene and could offer photos, videos, and first-person opinion and detailed information. Bloggers became the source of information for some news

agencies.18 Another example is teenagerʼs beloved Justin Bieber which became famous because in 2008 Scooter Braun, music industry manager, came across

Bieberʼs videos on Youtube.19

On the other hand, Anderson in his book The Long Tail defends that self-created

content will somehow result in an endless village of buyers and sellers. He believes in the free market and new technology will bring nothing else but abundance.

Digital technology is inescapable in the 21st century; we cannot just ignore it. And it is

also an incredible way of sharing information and keeps the world connected from one side to the other. Kevin Kelly told Siliconʼs Valleyʼs TED Conference in February 2005,

ʻYou can delay technology, but you canʼt stop itʼ. 20 Andrew Keen accepts that statement but he thinks that the challenge now is to protect

the legacy of our mainstream media and two hundred years of copyright protections within the context of twenty-first-century digital technology. The main goal should be

preserve the culture and its values while we enjoy the benefits that Internet provides to

all of us. The most important thing is to find a way to balance the best of the digital future without destroying the institutions of the past.

17 A Keen, The cult of the amateur, Nicholas Brealey Publishing, London, 2009, p. 27 18http://mediacrit.wetpaint.com/page/Blogs+and+Citizen+Journalism%3A+The+Effect+on+Our+Culture 19 http://es.wikipedia.org/wiki/Justin_Bieber 20 http://blog.ted.com/2009/08/18/how_technology/

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A good example of the fact that the democratization of information can quickly

degenerate into intellectually negative egalitarianism is Wikipedia. An encyclopaedia made by amateurs that everybody would consult eventually.

The idea is to create new media platforms that offer the best of both of the new and old

media worlds. In that way “Web 2.0 technology can be used to empower, rather than overshadow the authority of the expert.” 21

A really old case is the music industry that had to rethink its business model in order to survive the piracy and digital downloading. The success of iTunes shows that

consumers are willing to pay for music when is fairly priced and easy to buy. That business model could not be possible without new media platforms and of course itʼs a

consequence of its appearance.

So with all that freedom and accessibility how are we going to reassure that west culture will behave with Web 2.0?

“We need rules and regulations to help control our behaviour online, just as we need traffic laws to regulate how we drive in order to protect everyone from accidents.” 22

Technology doesnʼt create geniuses from scratch. It should be considered as a new

tool of self-expression otherwise thanks to the democratization of culture generated by the Internet, artists would not be able to sell any creative work because it will eventually

loose its value.

Andrew Keen claims in a really clear way his own opinion and solution:

“Instead of developing technology, I believe that our real moral responsibility is to

protect mainstream media against the cult of the amateur. Letʼs not be remembered for replacing movies, music, and books with YOU. Instead letʼs use technology in a way

that encourages innovation, open communication, and progress, while simultaneously preserving professional standards of truth, decency, and creativity.” 23

21 A keen, The cult of the Amateur, Nicholas Brealey Publishing, London, 2009, p. 188 22 A keen, The cult of the Amateur, Nicholas Brealey Publishing, London, 2009, p. 196 23 A keen, The cult of the Amateur, Nicholas Brealey Publishing, London, 2009, p. 204

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Nicholas Carr, respected journalist, in a cover article of the Atlantic Monthly argues that

the Internet is making our brains get used to read short posts and instant messages, the shorter the better. Internet has been eroding our ability to concentrate and read a

whole book or long article without stop in the middle and start thinking about what else can we do.

“Instead of readers the digital revolution is transforming us into skimmers”. 24

2.3 Shift on peopleʼs behaviour According to a statistic released in December 2010 by Forrester Research: the average U.S. consumer now spends much time online than watching television. “Social

networking and online video are among the top catalysts for the shift in attention.” 25

People who donʼt watch TV anymore, they spend time online with their laptops or mobile phones. With mobile networking, the world becomes smaller and smaller. There

are plenty of possibilities to explore with the mobile technology. Foursquare is a good

example of engagement. This location-based social networking allows consumers to check-in their favourite places and then each check-in awards the user points and

sometimes “badges”, depending on how often they go and consume.

24 http://www.theatlantic.com/magazine/archive/2008/07/is-google-making-us-stupid/6868/ 25 B Solis, Engage, John Wiley & Sons, New Jersey, 2011, p. 65

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Fig. 11 Foursquareʼs app interface.

Technology and behaviour are related as well:

Fig. 12 Graph that illustrates how technology changes people and people changes

technology.

When technology changes peopleʼs behaviour does as well, a clear example of that is what is happening in our society with social networks, smartphones, tablets, etc.

But people also have developed different needs along the history that have made technology change and adapt to them. For example nobody could imagine the success

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of text messages in mobile phones, but suddenly people start using it as much as

normal calls. The touch screen technology makes people want to interact. Technology is making

sense with humanity. Apple, for instance, is humanizing technology. Facebook and Twitter are successful because they are creating conversations.

Google search is different for everyone, it analyses what it can be better for your interest, relating to your past searches or country of residence, etc.

Another example is Konnect the new video console simpler than Wii, works only with

the movement.

“If technology is accessible everybody can join. Is going from exclusive to inclusive. It is closing the gap between high tech and normal people.” 26

2.4 Consumers are empowered I have argued that communication has shifted from broadcasting to narrowcasting

communication. That fact empowers consumers to decide what they want and what

they donʼt. There is a vast choice of content to snack on: from advertising, films, TV programmes, books, magazines, music and gaming to the whole range of Internet

resources. That variety has enabled consumers to choose entertainment and information that is relevant to them, in a way and at the time that suits them.

Furthermore, they can cut what is irrelevant.

Social networks have provided a focused target audience because advertisers can track which interests people have or what they need.

“With broadcast media the strategy was to push information at audiences offline. With

digital media the aim is to pull customers towards information online. Now push and

pull methods tend to be used in conjunction through multimedia programming and advertising.” 27

26 Matt Longstaff, creative copywriter at AKQA. 27 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 244

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Online there is a lot of material, websites and content designed specifically to entertain,

because entertainment attracts a lot of web traffic and makes sites an attractive place for advertisers.

“We are witnessing a shift in power. Once tightly controlled by publishers,

broadcasters, and corporations, the power to publish and connect messages and stories to people was considered a luxury only a matter of a few years ago – a privilege

many of us never would have experienced without the introduction of social platforms.

Technology is a change agent, and the capabilities and accompanying benefits that social media offers are liberating our channels of influence. Information is now

democratized and we the people are making our voices heard.” 28

Thanks to social media consumers have now a voice and brands are not the only ones that have influence. Democracy is reaching other levels like commercial

communication. That is somehow beneficial for advertising because people are conscious of what is advertising and what they are trying to do, so it is easier for

advertisers to be ignored and be less influential.

2.5 How people engage with advertising? “Tell me and Iʼll forget. Show me and I might recall. Involve me and Iʼll remember.” 29

Digitisation has made an old dog learn new tricks. Thanks to digital technology the

relationship between advertisers and consumers has changed:

“Digital has allowed advertisers to reach customers in new ways. It has allowed advertisers to create interactive catalogues, set up customer support and set up

information channels and has introduced the possibility of company-to-customer

dialogue.” 30

According to the book Engage by Brian Solis, sharing pictures online encourages views and peopleʼs interaction and as a result pictures become into social objects. For

example at the time of Hurricane Katrina, the American Red Cross launched a social 28 B Solis, Engage, John Wiley & Sons, New Jersey, 2011, p.108 29 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 5 30 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 22

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media initiative to track peopleʼs sentiments about the organisation – related issues

and to strengthen their relationship with the public. They created a blog, Twitter, Facebook and an active Flickr community. At the time of writing, there are 393 Red

Cross Flickr members and 1,627 images have been posted. But itʼs never just about one social media tool, the key of success is being able to create multiple touch points

related with each other giving a sense of community, making people feel part of something.

“Participation is the key to growing the community and ensuring its integrity and associated activity.” 31

These days when people have some problem with a brand they donʼt necessarily tell

their friends about it. They just go online to broadcast their displeasure. This is an issue for brands because bad news travels fast and the average person has around 120

Facebook friends, plus Twitter followers. So it is really important for brands to decide how to react in front of a complaint because ignoring the problem will usually make it

worse. The following case study shows a clear example of that fact: 32

d) Case Study: Glasses Direct

A man called Thomas, Account Manager in LBI, explains in his Blog that he had a problem with an order with Glasses Direct. He sent his sunglasses off to them to have

new lenses put in but when they returned they were wonky, one of the arms had been damaged. He sent the glasses back but when he received them they were still wonky.

He was so annoyed and he tweeted about it:

Fig. 13 Thomas message to Glasses Direct.

31 B Solis, Engage, John Wiley & Sons, New Jersey, 2011, p.47 32 http://www.thomassays.co.uk/dealing-with-complaints-via-social-media

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And Glasses Direct replied to him and they added a Youtube link, where all the staff

was apologising. 33

Fig. 14 Glasses Direct tweeted Thomas back.

Fig 15 Screenshot of the video that Glasses Direct sent to Thomas.

With a simple action they turned one negative situation into a positive one. And the results were 300 views, 20 retweets, a link on Thomas Facebook page and a little

boost of positive press. 34

The challenge for any brand is first getting noticed and then engages with people being able to catch their attention, have a response and hopefully initiate a relationship.

33 http://www.youtube.com/watch?v=vYFV80dXoGs&feature=player_embedded 34 http://www.thomassays.co.uk/dealing-with-complaints-via-social-media

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2.6 We will be googled… With social media comes great responsibility. Everyone inside an organization is

responsible at some level for the branding and public relations. Everything an employee does online or offline builds the brand perception of the company he

represents. It is really important to build online trust in order to retain customers and make them talk about the brands they like and trust. Some key points are: add content

to the engagement, create a story and allow participation. Be transparent, donʼt lie and

know when to apologize if it is necessary. Respect your consumers and protect confidential information. 35 The picture below shows a detailed path of how online trust

is built:

35 B Solis, Engage, John Wiley & Sons, New Jersey, 2011, p. 123

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Fig. 16 Detailed path of how to build online trust.

Another landscape where we can see the importance of trust is Cannes 2011. The majority of rewarded campaigns were based in ʻmaking projects not campaignsʼ. In

other words, brands are doing something ecologic, non-profit, etc, instead of only selling. Advertising for the good is the new undercurrent, like the last Leviʼs campaign

26

ʻGo forthʼ by Wieden + Kennedy trying to rebuild a poor and abandoned village of the

US. 36

Fig. 17 Two posters of the Leviʼs ʻGo Forthʼ advertising campaign.

The democratization of information is another danger that brands have to keep in mind.

Having a lot of information available to everybody carries huge responsibility and it is harder to lie. A consequence of that fact is that brands have to change their behaviour;

they have to be legitimate online and offline.

36 http://www.youtube.com/watch?v=p63BwVm_ojw

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“For instance Innocent brand is the proof that acting nice can be more powerful than

Coca-cola doing a lot of cool advertising.” 37

Brands like Nike can also do campaigns transmitting good values besides promoting their own image, like for instance, ʻThe girl effectʼ (Wieden+Kennedy)38.

e) Case Study: Nike – ʻThe girl effectʼ

Nike launched a campaign that proposed a girl as the solution for poverty, hunger and

sickness in the world. They said if you invest in a 12-year-old girl she will be able to avoid HIV because she will have money to visit a doctor regularly and she will not have

to sell her body to maintain her family. She will stay at school where she is safe, she will use her education to earn a living, she can get married and have children when she

is ready and her children will be healthy as she is. If this continues for generation after generation will mean: 50 million 12-year-old girls in poverty equal 50 million solutions.

This is the power of the girl effect.

Fig. 18 Screenshot of ʻthe girl effectʼ website.

37 Interview Matt Longstaff, creative at AKQA 38 http://www.youtube.com/watch?v=C44BOxKhwsQ&feature=related

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Fig. 19 Screenshot showing how people can help.

Fig. 20 Screenshot showing Facebook and Twitter representation.

In an interview with Matt Longstaff, creative at AKQA, he mentioned that projects are not going to replace campaigns but the former help to reinforce any brand.

He said that brands are not anymore two-dimensional. The new trend is 3D brands, which are experiential, allowing consumers to have a relationship with them.

In the interview to Craig Mawdsley he ensured that projects are not only going to stay

but grow bigger. He justified this with two main arguments: first, agencies like doing

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them and second, clients like having a good brand image. Those ideas are more real,

thatʼs why they work better. Projects help to ground brands and they are easy to understand for both consumers and clients.

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CHAPTER 3 ʻChanging business models: from new companies to traditional advertising

agenciesʼ

New media platforms are changing all the business landscape that we use to know.

Every business had to adapt itself to the new technologies but what it is even more interesting is that, this technology has enabled the birth of new forms and types of

business. The entrepreneurs simply change the way people think about something,

they probably make everyday things easier. They are now able to create businesses that could not have existed before like Facebook, Google or Amazon. These

businesses succeed not for the concept but the execution, all of them are based on things people love to use, human ways of relating with other people, conversations,

trade, education, etc.

“Itʼs not about what you destroy itʼs what you create. Itʼs about seizing changes in technology, regulatory changes, and changes in how consumers are behaving, so you

can do something much more efficiently – do it in a completely different way.” 39

The creators of limited products that nowadays have been digitised have to find the

way to survive in a new world where anyone can create similar products with really low cost budget.

“The Internet created a new physics of business: a fundamental change in the rules of

who can compete with whom, and how and where they can compete. It allowed entrepreneurs to apply radical operating models to traditional businesses and to create

businesses that simply couldnʼt have been conceived before. For example, Betfair has been able to create a completely new type of gambling company. Skype can operate

as a global telecoms company, with paying customers around the world, serviced by

only 320 staff.” 40

Businesses that believe that the historic strength of their brands reassures their success they are wrong. The key for survival is innovation; every single business has

39 Niklas Zennstrom, one of the founders of Skype speaking on stage at DLD in Hamburg, February 2010. 40 S Waldman, Creative Disruption, Prentice Hall Pearson, Great Britain, 2010, p. 17

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to adapt itself to the society needs. And they cannot forget that peopleʼs behaviour is

constantly evolving and technology just makes it easier.

Polaroid for example failed, they thought people would continue loving the instant technology therefore they avoided the shift to digital.

So how all these changes will affect advertising? What are ad agencies going to do?

The record labels, newspapers, retailers, directory businesses, ad agencies and publishers that will succeed in the future they will do so, because they will continue

reinventing themselves, they will prioritise innovation in front of the other values. For every disruptive action, there is a creative reaction. Thatʼs how entrepreneurs get new

opportunities to enter in the market and provide fresh innovative blood to any kind of industry. 41

3.1 How media is affecting the advertising industry?

If we compare advertising from the 1960s to the advertising from 2011, we will notice that really important statements have changed. For example ad agencies had more

control and now audiences are the ones who have control. Before advertising agencies used to design messages to people but now people designs messages to ads. In the

60s advertisers used to see people as consumers and now audiences have much more power, they are consciously aware of the existence of advertising so they demand

much more than information, they want experiences.

41 S Waldman, Creative Disruption, Prentice Hall Pearson, Great Britain, 2010, p. 217

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Fig. 21 Comparison between advertising in the 1960s and advertising in 2010.

Following Craigʼs Mawdsley presentation at AMV BBDO, he mentioned some really

interesting points about the future of advertising 42. He questioned the way of producing ads for example: reducing the media budget and then spend more money on producing

a great ad and put it on Youtube. That is already happening but in his opinion that is not the answer, it is just transitional.

42 Head of planning at AMV BBDO

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“It has been a shift from hierarchy to network. We donʼt have to be in the top, we have

to be in the middle of a conversation.” 43

So we can say that engagement is the key of success. We need to make people participate and make them feel they are part of something. Craig put some examples to

justify that engagement also needs content (Mother: Eurostar – Somers Town), participation (AMV BBDO: Doritos – ʻKing of adsʼ) and earned media that means for

instance that Old Spice – ʻSmell like a manʼ campaign has never been seen on TV but

The Sun made a parody of it.

The following campaign is a great example of a good engagement process. 44

f) Case study: Heineken Star Player

An iPhone app designed to let fans interact in real time with football matches of the UEFA Championʼs League. It is really easy to use. You just download the app; create a

simple profile for yourself and ten minutes before the match starts it opens up for play.

The game is sync with the time on TV and allows players to predict which team will score first, if it is going to be corner, red card, goal, etc. You also can see your friendʼs

profile and check who is the best.

43 Craig Mawdsley, Head of Planning at AMV BBDO 44 http://www.youtube.com/watch?v=-QO8IYm2xVo&feature=related

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Fig. 22 Heinekenʼs app interface.

So are we living in the golden age of advertising?

Fig. 23 U.S. Advertising Expenditures in 1860 vs. 2000s.

Probably advertising never has been in such over communicated era. Traditional media

are still on but new media technologies are rising with no sign of stopping. Agencies have to be careful with the use of digital. Making a Facebook page for the sake of it is

35

not profitable because there is lack of content. A good digital agency is the one that

thinks digitally. Advertisers have to treat media with respect, not just because is there it means they have to be on it. Is not about shouting messages, is about having

conversations. In an interview with Matt Longstaff, creative in AKQA, he came up with a good example to explain that fact: Lynx advertising shows an imbalance in the use of

media. Their proposition doesnʼt link between TV and Digital. In TV ads they say Lynx is all you need to attract women but in the online version you can see is giving guys

advice about how to be more successful with them. Advice that you are not supposed

to need if you use Lynx following what the TV ad says. An example of a balanced use of media is the Kleenex campaign ʻLet it outʼ made by

JWT London.

g) Case Study: Kleenex – Let it out

They made a TV ad that shows a psychologist sitting in a couch in different streets of London. People approach him and start explaining problems or experiences, sad or

happy feelings doesnʼt matter but they all ʻlet it outʼ with Kleenex. All people need to let

it out itʼs a good listener and Kleenex tissues. 45

Fig. 24 Screenshot of a frame of the Kleenex ad.

45 http://www.youtube.com/watch?v=u5cPulLXiLA&feature=related

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And then when the consumer visits the website, it makes sense, because they offer to

the user the possibility of reading stories about other peopleʼs problems, test their emotions express their feelings or give their support to other people.

Fig. 25 Screenshot of the Kleenex website showing the ʻlet it outʼ campaign.

3.2 New advertising business models The advertising industry is inevitably related with technology. There are different

advertising agency models: - Traditional ad agencies: AMV BBDO, Ogilvy, DDB

- Integrated agencies: Glue - Larger digital agencies: AKQA

- Digital production shops: Mofilm, Idea Bounty

It is important to keep in mind that people engage with ideas not channels, therefore

any type of agency has to be driven by focusing on good ideas.

The head of planning of AMV BBDO, Craig Mawdsley, affirmed that “we are going to fail more often now” because with the traditional model of advertising the demand of

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creation was equivalent to 90% and the demand of fulfilment about 10%. On the other

hand the online model demands 10% of creation and 90% of fulfilment. In other words engaging with people and rewarding them with an experience is what is on demand

nowadays. 3.3 The new advertising landscape Internet and new technologies have made possible the creation of companies like

Mofilm 46 or Idea Bounty. Mofilm is divided in Mofilm Social which helps big brands become better listeners to on-line conversations and Mofilmpro which offers brands the

opportunity to create higher quality video faster than traditional methods. They have a registered community of 30,000 creative filmmakers thinking on any brief. Usually it

takes between 4-6 weeks to finish a project instead of 4-6 months time needed by a traditional advertising agency, because working directly with Mofilm eliminates all of the

bureaucracy and administration. They call themselves: “The Worldʼs Biggest Creative Department”. Mofilm can help

brands to produce any form of video content: TV commercials, sales support material,

virals, online content, trade stand shorts, etc. Professionals like David Alberts, former chairman and executive creative director of Grey, and Jon Landau, american film

producer, ensure that every video produced is the best material possible and the quality is excellent as well.

Idea Bounty is another digital production shop. They define themselves like that:

“For clients, Idea Bounty is the simplest way to hire 1000s of creatives and only pay for

the Ideas you want. For creatives it's an amazing platform that allows you to pitch on

various briefs.

Their bottom line: “Clients get the best Ideas and creatives get paid for those

Ideas.” 47

They use the Internet as a channel to trade creative solutions to business problems. Clients only pay for what they consider is the best but they have a lot of different

46 http://www.mofilm.com/ 47 http://www.ideabounty.com/

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creativeʼs working on it. On the other hand creatives can have thousands of

opportunities to demonstrate how good they are and get paid for it. Traditional agencies had to introduce new roles within the advertising profession as: Data planner, Brand planner, Media planner, Customer Insight specialist,

Technologists, Project managers, Flash Expertise, HTML programmers etc.

“Digital technical directors (DTDs) oversee the programming of websites, virals and

other digital communications. They have to understand new ideas that are emerging in the field of digital technology, and have a clear grasp of how the capabilities of new

hardware and software might create potential for advertising, as well as how specific clients might use them.” 48

Dave Bedwood and Sam Ball are Founder/Creative Directors and digital advertising

team at digital agency Lean Mean Fighting machine. Sam and Daveʼs agency produces online advertising. They work as an art director/copywriter team. They initially

use a traditional way producing creative ideas and then they make the drafts that later

will be developed digitally by designers, filmmakers and programmers.

“Working online also requires copywriters to be skilled in maintaining a dialogue (rather than simply imparting messages) and have an ability to extrapolate campaign ideas

through different types of online experiences. Digital art directors have to ensure that URL links and functional information are clear and that both the visual language on

screen and movement between screens are consistent.” 49

New breeds of advertising agencies have also emerged. One such agency in the UK is Quiet Short Films. They describe themselves as programme makers and they produce:

TV commercials, TV programmes, virals, website MPGs and many more. Quiet Storm

operates through existing channels and new margins of mass communication. 50

48 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 259 49 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 261 50 P Springer, Ads to Icons, Kogan Page, London, 2009, p. 263

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3.4 So are new media platforms threatening the advertising industry?

“New technology and the new economy are creating turmoil in advertising, challenging

ad agencies to rethink the way they do business. Some industry observers predict agencies will disappear. Others say the new economy and technology will provide

greater opportunities for agencies to grow and prosper.” 51

Experts say that to survive, agencies must serve as "strategic partners" in helping

advertisers to promote dialogue between brands and customers. Sean Carton, chief

creative officer at Idfive in Baltimore, wrote in ClickZ.com, a digital marketing website saying: Agencies in the future must "provide high-level strategic guidance that clients

need in a media-chaotic environment". According to that last statement we can say that strategic planning will become more and more important.

Craig Mawdsley, head of Planning at AMV BBDO said in a presentation the past 22nd of July that the role of planning is changing in the age of engagement. It is becoming

more important but planners have to be constantly changing and the motivation that

fuels that change is the fear of becoming obsolete. If “markets are conversations”,52 planners are the ones responsible for knowing the

human being in all its senses and create a good strategy to engage with him.

According to Rob Steeles, copywriter in 23red (integrated agency), new media technologies only threatens an agency if this one is to slow to face how the consumer

responds. Although digital production shops are doing well, he thinks there is always a need for a professional brand campaign, comparing new media platforms with the new

direct response. In his opinion the birth of these new kind of businesses could bring two

things: Fresh new creativity, which is always interesting, or the fact that clients start buying poor advertising created by them. Maybe the solution is matching the

advertising agencies with the fresh creativity produced by new media companies avoiding poor advertising. The constant need for knowing whatʼs new is vital thatʼs why

having a technology department like Ogilvy Labs is completely necessary.

51 http://www.suite101.com/content/future-ad-agency-business-models-a112454#ixzz1RuVkkKze 52 F Levine, C Locke, D Searls & D Weinberger, Cluetrain Manifesto, Perseus Publishing, Cambridge, Massachussets, 2001

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AKQA is a digital agency and their opinion about that topic is also really relevant. In an

interview with Matt Longstaff, copywriter and conceptist in AKQA, he affirmed: “Expert knowledge prevails. Of course ideas come from anywhere but still an advertising

agency knows exactly what to do. An agency with a long relationship with a client wants to benefit him not only win awards. In the other business model (Mofilm, Idea

Bounty) the attitude of the creatives can be more selfish, working on a project to put in their portfolio rather than satisfying a client.”

In his opinion the Mofilm business model is more likely to make art rather than advertising, and the latter is about making money not art.

In AKQA teams are divided in the brands they are working for. All of them headed by a

creative director. AKQA is relatively young (12 years) so a big threat they are facing is the fact that traditional advertising agencies are doing good digital advertising like for

example AMV BBDO, which is investing strongly in digital technologies.

Matt thinks the use of digital technology is going to grow bigger but is not going to

conquer other fields as print. But eventually TVʼs will become smart products. Microsoft CEO Steve Ballmer said in an interview that all traditional media, including television,

radio and print, would disappear within a decade. It will all morph into a new

personalized media environment that will be delivered digitally over the Internet: “the consumption of anything we think of as media today, whether it is print, TV or the

Internet, will in fact be delivered over IP and will all be digital.” 53

Big agencies have more money to experiment with new technologies but it is harder for

them to shift because they are earning a lot of money with big TV budgets. In contrast, small agencies can easily change but the donʼt have the money to invest.

53 Microsoft CEO Steve Ballmer. http://broadcastengineering.com/news/ballmer-predicts-media- dissappear-1022/

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CHAPTER 4 ʻConclusionʼ

Marketers should stop thinking about consumers as simply a group of people. They have to start imagining these people they want to target, as a powerful network that

shares common goals and concerns. They have to find out how the values of a brand could fit in the collective interest of this network and make it beneficial for both parties. It is clear that the business model of advertising is constantly mutating and new breeds

of advertising agencies are being born. The opinions of different experts or professional advertisers are diverse. What it is for sure is that the industry is facing a big change

due to the implementation of new technologies in peopleʼs everyday life. Nowadays traditional advertising agencies are still powerful but the competition is fierce

and innovation is the key of success. In conclusion, new media platforms can be a threat for advertising if the industry doesnʼt update its skills at the right time, if it doesnʼt prioritise innovation and if it

doesnʼt have enough motivation for the change in order to avoid becoming obsolete. In my opinion new media platforms are an opportunity for the advertising industry

instead of a threat. Because new media is giving to advertisers the opportunity to

become something more than broadcasters, they can now influence people having conversations. People would be aware of them but still they will like them if they know

how to do the right thing. The business model will evolve mixing traditional and digital aspects by now. Integrated agencies may be the future of advertising business model.

After research we can see that digital production shops as Mofilm or Idea Bounty are really creative and powerful companies but still not a direct threat for the advertising

agencies as we use to know.

We can say that the highlight of digital technology is that it has given a voice to society at large. If brands now have to protect their images and be aware of peopleʼs opinions,

that means in future we will use advertising and communication not only for a

commercial purpose, but hopefully also to change the world for the better. Nowadays advertising is already helping to change peopleʼs behaviour in a good way,

like the Nike Girl Effect by Wieden+Kennedy, mentioned in Chapter Two.

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As advertisers we should take advantage of the substantial power that we have and

sell experiences to people that make their lives more exciting. We have the tools, we have digital technology, but the most important thing is peopleʼs

voice, action and reaction towards our ideas. In the future of commercial communication and advertising, things are going to change. However, what will never

change is the importance of good ideas. And now more than ever we have the opportunity to create strategies that will make people believe in things and trust them

by being part of the process.

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Documents

Dissrtation. New media platforms