| Keeping in shape for the upturn |
| Monday, 05 May 2003 | |
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FT Creative Business, 6 May 2003 - Technology is profoundly changing both the medium and the message. Marketers need to adapt to stay ahead. If Sir Martin Sorrell is right, marketers will have to wait until next year to see an end to the gloom of the past few years. But when the upturn does arrive, it will find an industry undergoing powerful changes. Most of the changes have been driven by new technology and the resulting fragmentation of audiences. For instance, the rise of the mobile phone opens up new channels to marketers, while third generation mobile phones will make communications more interesting than the boring SMS message we have now. The digitisation of television means that it has become easy to be a broadcaster - you can set up a channel for a few tens of millions of pounds. More leisure time is being spent on the internet, which poses a dilemma for marketers - how to reach people who spend more time in front of the computer screen instead of the television.Television advertising is also under threat from technology, as personal video recorders mean viewers can easily cut out the ads as they watch "time-shifted" programmes. Even traditional methods like direct marketing are being changed by digitisation, as new techniques for digital printing allow much greater personalisation. And it's not just the proliferation of new media that is profoundly changing the business of marketing. With the development of the ability to sift through detailed customer data electronically, IT has brought efficiencies and opportunities to marketing departments. What's more, the expansion of the technology market has made these new techniques available to large and small companies alike. Computer hardware has come down in price dramatically, while processing power has risen, making it easy for even small companies to install the kind of power needed to store and process vast quantaties of customer information. More advanced software has increased our ability to sort through these enormous databases, to find meaningful patterns and to automate certain activities. Through the most complex varieties of such software remain expensive, basic versions are in reach of all. Automation has taken some of the slog as well as the cost out of marketing departments. When a customer's insurance policy expires, for example, a simple database function allows them to be sent a renewal invitation automatically. Direct marketing campaigns can be orchestrated in a few days, and campaigns can be electronically co-ordinated over a variety of media from a single technical viewpoint. But while technology has extended the power of marketing, consumers have grown more savvy, making them harder to reach. Bombarded by marketing messages, we have learned to regard much of it as mere background "noise", which we filter out of our lives in the same way that we wearily delete the spam e-mail that fulls up our in-boxes. If marketers want to make a real impact, they have to cut through that noise, with messages ever more creative, more innovative, more striking. That's the aim of designers Williams Murray Hamm, who won the Grand Prix at the International Design Effectiveness Awards last year for their innovative campaign to repackage Hovis bread. "People have to filter out a lot of the same marketing that's directed at them, just to stay sane. It means you have to work harder to get notices these days, because there is just so much more out there now," explains Richard Murray of WHM. Consumers also have greater awareness of their own privacy. Strict EU data protection laws govern what data marketers can collect, how long they can keep it and what they can do with it. A new "anti-spam" directive will place an even greater limitation on marketers by demanding that they seek a form of permission before contacting consumers with marketing messages. The directive, to come into force in October, will not apply to databases amassed before that date, however, so many companies are scrambling to bring together as much customer information as they can before then. Marketers will have to consider carefully the meaning and implications of permission in the next few years. Now that consumers are taking in so many different media, a new trend has emereged for "media-neutral" campaigns that can be exported across all platforms, from TV to radio to the internet and more. This year's advertising effectiveness awards heavily emphasised the role of media neutrality. Media-neutral campaigns, however, will not be enough in themselves to help marketers cope with the increasing fragmentation of the media. As new TV and radio channels spring up, catering to ever narrow interests, it becomes easier to reach some demographics, but much harder to find a medium with a broader appeal. Yet major TV channels remain unwilling to drop their prices to the level that their falling audience share might suggest. Could this mean that advertisers will turn away from their dependence on TV in favour of emphasising other media, from the internet to outdoor poster sites? Radio, notably is enjoying a renaissance. And despiste the dotcom collapse, internet advertising continues to show sizeable growth. "More and more, we're seeing people look at their budgets and deciding that they can more profitably use the money and gain greater reach by devoting a slice to a new media, than by spending it on a bit more TV," says Michael de Kare Silver, chief executive of Modem Media, a web consultancy. The greater ability to personalise advertising using new technology - ranging from the internet and mobile telephony to digital printing - may provide something of an answer. It allows advertisers to exploit the very fragmentation that denies them the single broad platform that old-style TV used to give. Also, customer relationship management software allows companies to collect enough information on customers to make personalisation effective, as well as to throw up cross-selling opportunities. These are also aided by the software's ability to spot patterns in large volumes of data, which can be used to identify customers likely preferences. Personalisation is also a tricky issue for advertisers, however. Get too personal and you scare people away. Recall the scenes in the film Minority Report in which Tom Cruise is assulted walking through shopping centres by active posters, calling him by name. Most people shudder at the intimacy that vision represents. A good lesson for advertisers lies in the intimacy of mobile phones. "You have to be very careful with mobile advertising, as you don't want to annoy consumers. The messages have to be entertaining, witty or interesting, because people are answering their phone for you. It's also good to offer a reward of some kind, like a discount voucher or a competition prize," explains Lars Becker, co-founder of Flytxt, a mobile phone marketing specialist. So while marketing companies wait for the upturn, they must consider whether they are in shape for it when it does arrive. From amassing customer data to implementing permission-based marketing schemes and devising media-neutral campaigns, marketers have plenty to keep them busy. © Copyright Flytxt Ltd 2006. Unauthorized use of any content constitutes a material breach. |
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