I was watching a TEDx Talk on YouTube the other day entitled What if there was no advertising by George Nimeh CEO of Nimeh & Partners, which bills itself as the agency for changing times. What struck me was the realisation that advertising as we know it is going through a profound change.
With 200 million people using ad blockers, the chances of clicking on a banner ad is now 0.04 percent which equates pretty close to the chance of getting hit by lightning at 0.03 percent. Yet Internet advertising will account for 52 percent of global advertising expenditure in 2021, according to Zenith’s latest ad forecasts, exceeding the 50 percent mark for the first time.
In a celebration of 25 years of digital advertising, Adobe have published a booklet “Now we are 25”. In a telling statement, the publication reminds us: “It wasn’t long before what’s known as ‘banner blindness’ became a common challenge for creatives to overcome."
“People are tired of being bombarded with ads that don't apply to them or are ill-timed. They lost trust, so they stopped clicking,” writes Jami Oetting on Hubspot.
It is the flood of ads that are irrelevant to the content they appear in that skews the figures and Hubspot has a great infographic (click here) that shows who’s clicking. 39 percent of people clicked on an ad because it showed a product they were already interested in, or it sparked their interest in a product they hadn’t previously considered. Relevance is the key.
Since the first banner ad was conceived in 1994, they have epitomised a societal belief that advertising gets in the way – it is interruptive, it annoys, and it costs us time and money on download data.
The fact is, consumers abhor interruption. Viewers fast-forward through ads and while music-lovers love Spotify, most of us choose to pay for the premium version because who wants to have their chillout time disturbed by advertising.
Yet a world without advertising would be an expensive place. Most of our entertainment and information is gleaned from sites that are paid for by advertising. On the current model, if we lose the ads we will cut off the free flow of much of what we enjoy in life.
Would the All Blacks win the Rugby World Cup without the help of Adidas and AIG to fund the best players in the world? Would we get much of our news on TV or in other media without advertising? Perhaps, but only at a much greater cost.
The solution Nimeh tells us, is storytelling. Paid content that tells stories that people want to hear rather than have to hear. That’s the challenge for advertisers.
“Simple ads detailing the benefits of products and the outlandish claims of salespeople were once enough to persuade consumers to buy. But things are changing, and a more sophisticated approach to selling is required,” says the Marketing Toolbox. Creating engaging and persuasive narratives is essential in the modern environment.
Lisa Ronson, chief marketing officer at Coles, is quoted in the Adobe brief: “We presumed that consumers were rational when engaging with them on digital channels. Some got it so very wrong.”
Delivering raw data doesn’t resonate but immersive storytelling does. “Brand storytelling is more important today than it’s ever been,” says a recent article in Adweek, telling us that “effective storytelling and content marketing across channels is a very different proposition from what it was even five years ago.”
“Powerful stories connect at a deeper level. People don’t remember facts, they remember stories.” This is a message Auckland branding Icon Brian R. Richards impressed upon me when I first interviewed him for NZ Marketing over a decade ago and today his message rings even more true.
As Cassie Roma, head of content marketing for The Warehouse Group, so succinctly put it to Intelligent Ink: “We don’t have 30 seconds to be interrupted, but we do have 30 minutes to hear a great story.”
My contention would be that the time it takes to tell the story is not as important as the way the story is told. To be effective, advertising that tells stories needs to have a deep understanding of human emotions, motivations, and psychology, otherwise, like lightning, the chances of a hit are next to nothing.
In the latest issue of NZ Marketing, the feature, Content Marketing Comes of Age, authored by yours truly, discusses how traditional advertising is giving way to a different, more authentic form of brand communication, as brands tell their stories in more compelling ways.
Whatever channels advertisers choose, there is no doubt that as Adobe advises, “the next couple of years will be pivotal and all signs point to an evolution spurt.”
Ikon Communications founder, Simon White, hits the nail on the head in typically Aussie style: “In general, the majority of ads are boring, predictable, skippable, and a waste of money that won’t deliver sales that the CFO wants. Clients need to wake up, stop ticking boxes, and roll the dice to get rewarded.”
Reading that True managing director Steve Kane confirmed to the NZ Herald that the agency's relationship with client ASB had moved from retainer to project-based, got me wondering how agency remuneration had changed and is still changing.
Richard Bleasdale, managing partner of Asia Pacific at The Observatory International, recently explained why change is coming.
“As the digital revolution transforms both the opportunity and the output that advertisers require from agencies, there’s a clear need for innovation in remuneration strategies and frameworks,” he wrote.
Most clients look at one of three primary payment models, those based on time, commission or on a retainer with some form of pre-agreed outcome.
Ad agencies need to promote new ways of being rewarded before they have new terms dictated to them. Some of the older ad people will remember how the multinationals removed the standard media commission from their agency arrangements in the nineties. That created a split between media and creative, to my mind, to the detriment of agency delivery.
Transparency expectations have long been at the forefront of client expectation and that has led to a push for value or outcome-based remuneration.
The ASB /True relationship change confirms a move by clients to a project-based approach along with an increase in the number of agencies on their roster – a horses for courses approach.
Interestingly, Bleasdale refers to zero-based budgeting, which is “an in-vogue financial approach”. The problem for agencies will be with their ability to provide adequate resource while struggling to forecast an accurate revenue stream.
“Those who work in the advertising and marketing industry lack the necessary skills to connect with consumers on an emotional level, don't like to share and are also out of touch", writes Kim Benjamin in the UK edition of Campaign. His contention is derived from a study by media owner Reach's sales arm Reach Solutions, which carried out the research in response to the current polarised political climate in the UK. “It explored how well the marketing and advertising industry understand the mainstream by assessing empathy levels and moral frameworks.”
Using an empathy scale developed by psychologists, the study found generally low levels of empathy, with only 30 percent of people working in the industry displaying high levels of perspective-taking and affective empathy.
Back in 2016, AdAge ran an article saying that the key to successful advertising is empathy, derived from data. “Innovation requires a true understanding of users' wants, needs and grievances it said.
What I loved about that article was the example it used to show how unempathetic the practice of advertising was: “The great Renaissance sculptors took a block of marble and slowly chiseled away the extraneous bits until they reached their desired form. But imagine if Michelangelo took that raw block of marble and announced, ‘Let's just put the whole block on display; the form is in there somewhere.’ This is effectively how traditional advertising has, and is, being transacted: ‘Buy the adults 25-54 demographic – your audience is in there somewhere.’ We can do better.”
As the article in Campaign confirms, we are living in a polarised time and advertising people and clients alike, are finding it difficult to give up their prejudices and pre-conceptions. One advertiser that should have known better is Nivea, which has been spectacularly dumped by FCB, with whom it had been a global client for 100 years. It was accused of homophobia after a company executive allegedly rejected an ad pitch saying, "We don't do gay". In today’s market, a lack of empathy with any part of the market can have dire consequences.
Unless we fully understand our audiences, our communications will lack appeal. As Jonathan Haidt writes in his book The Righteous Mind: “Empathy is an antidote to righteousness, although it's very difficult to empathise across a moral divide”
Empathy is seeing with the eyes of another, listening with the ears of another and feeling with the heart of another. You can only understand people if you feel them in yourself.
“Happiness doesn't come from getting what you want. It doesn't come from within, either. Happiness comes from *between* – from finding the right relationship between yourself and others, between yourself and your work, and between yourself and something larger than yourself.” – Jonathan Haidt