Bob Rinderle / Business & Beyond

Collapse Of Newspaper Ad Revenues

"The decline in newspaper ad revenues to a 60-year low is amazing by itself, but the sharp decline in recent years is stunning.  Last year's ad revenues of about $21 billion were less than half of the $46 billion spent just four years ago in 2007, and less than one-third of the $64 billion spent in 2000."*

*Source: Dr. Mark J. Perry, professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. http://www.mjperry.blogspot.com

The Backlash Against Ubiquity

For years now it has seemed that no place was safe from the exponential encroachment of advertising, whether it be signage inside the Friendly Confines, ads above urinals, and even the attempted selling of naming rights for children.

But a not-so-funny thing happened on the way to ubiquity.  Entirely new communities comprised of millions of people formed with barely an ad in sight.  As I play songs on Pandora, add friends in Facebook, and tweet to my heart's content, it is possible to spend hours online in a nearly ad-free environment. 

And the online social experience will change dramatically in the next few years as portable social IDs transform how consumers, brands, and social networks interact.  For ad agencies and mar-com companies that expect today's revenue model to hold up for even a few more years, they would do well to understand just how fast the newspaper industry went into the tank; to understand how quickly iTunes became the largest music retailer in the world; to understand the impact of Coke's pay-for-performance compensation model; and to understand the awesome force that is the social web.

Agencies Need A New Value Proposition

Ad agencies are only a few steps behind the newspaper industry when it comes to clinging to an outdated revenue model.  The future no longer lies in crafting and delivering brand-building messages but in brokering meaningful relationships based on real value.  One could easily argue that a company's most valuable branding tool is its website or other omnipresent digital touchpoints rather than its paid media presence.

But even that is rapidly evolving; Forrester reports, "Starting about two years from now, as social networks become the repository for identities and relationships, they will become more powerful than corporate Web sites and CRM systems.  Communities will become the driving force for innovation....  Brands will cater to communities, resulting in a power shift toward the connected customer."

(Media) Apocalypse Now?

In Ad Age this week, Bob Garfield expands on his Chaos Scenario, and essentially claims the Media Apocalypse is now – citing examples from both the online and offline worlds.

As agencies and clients focus increasing amounts of attention on social media and struggle to keep up with The Next Big Thing, it is important to understand that traditional media platforms are eroding just as quickly, with many facing bankruptcy or serious restructuring challenges.

The resulting void - the collapse of reliable stand-by media options, especially in newspaper and print, but also extending to issues in radio and broadcast TV, combined with an ever-expanding universe of digital communications' touch points - is completely upending and re-writing the benchmarks by which to evaluate successful marketing.