How Digital Media is Revolutionizing the Advertising Industry

How Digital Media is Revolutionizing the Advertising Industry


What’s the future look like for the advertising
industry? Let’s talk about the details. Today, we’re going to talk about the global
advertising industry, which encompasses just a wide variety of things that people don’t
always consider when they’re thinking of advertising in a casual manner. You may just think about ads on TV or in magazines
that you read, but there’s a really broad scope of potential ways to advertise: billboards,
obviously; newspapers, obviously; radio; television. But what about specialty advertising? Things even as small as printing a company’s
name on a ballpoint pen and handing it out at a trade show is part of the advertising
industry. Now, obviously, the biggest change in advertising
is digital. Things have completely revolutionized in the
last several years in the advertising industry and will continue to do so. So, let’s talk about the good news and the
bad news, and I’m going to start with the bad news. Traditional advertising media, particularly
television, radio, printed things like magazines and newspapers, have really lost a lot of
their importance and lost a lot of market share in advertising. So, if you think back
to a couple decades ago, consumers were really limited in their choice, in terms of radio,
TV stations they might watch, things they could do with their leisure time where we
might target ads at them. The Internet changed everything, and then
smartphones changed it even more. The good news is the digital revolution has
made it possible for advertisers to reach their ultimate goal, and that is to actually
be able to track the results of their ads. So, if you think about it, just running an
ad on traditional television, it can be very difficult to really know in a definite manner
how many people saw your ad–of course, we survey, we run tests to try to see how many
people are watching an ad at a given time–but really how many people watched that ad, who
are they, what was their response, most importantly did they take any action based on viewing
your ad? Now, think about highly targeted digital ads. Look at the most obvious one: you run a search
ad on Google, somebody searches for “new car,” they see your ad for a Honda dealership, they
click on it, you know that your ad drove one click to your website. You’ve gotten an immediate response, you know
what the result is, you know what your cost per response is, you can eventually formulate
that to determine what your cost per eventual sale is–it’s really just a phenomenal improvement
for the advertisers themselves and the agencies that work for those advertisers. There are also a lot of ways to further refine
that niche targeting. So, let’s say we run an ad on a food network
channel, and we’re targeting people who might be interested in buying high-end appliances,
like maybe really fine refrigerators and ranges. We can also reinforce those ads on a channel
with ads on cooking interest magazine sites, maybe in the print edition and the digital
edition. We can also follow that up with targeting
mailing lists and maybe send some snail mail to people. So, there are lots of ways we can really refine
those interest groups and get our special message to people who are most likely to respond
to what we’re trying to sell them. Now, that’s a lot better than simply broadcasting
an ad to everyone and hoping it sticks somewhere. What’s developed is a system called “programmatic
ad buying” to enable advertisers to bid in real time for the attention of someone who
has very specific behavior. Advertisers can use their digital buying agencies
to say, “I’m willing to pay so much money, maybe $4, maybe $10, maybe $0.40, for someone
whose behavior pattern, and their location, meet certain criteria.” And as soon as that
person is online, if that bid is the highest amount, then that company’s ad will show up
in front of that person. That’s how it works. Now, to learn everything you need to know
about the advertising and media market, see Plunkett’s annual Advertising Industry Almanac,
which is a standard item in agencies, big corporations, universities, and libraries around the world, which we rewrite and republish every year, and see the related Advertising Industry Research Center at Plunkett Research Online. Thanks.

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