Transcript What Academics Miss When Studying the Emerging Media World

The New Advertising System:
Innovations and Issues
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JOSEPH TUROW
ANNENBERG SCHOOL FOR COMMUNICATION
UNIVERSITY OF PENNSYLVANIA AT
RIA NOVOSTI
Summary
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 Marketers and many academics are fond of saying
that in the early twenty-first century consumers rule
the media.
 But if you look "under the hood" of the emerging
media world, you see that advertisers and their
agencies are establishing a new kind of influence
over media firms and consumers.
Summary
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 In fact, at the start of the twenty-first century, the
advertising system is guiding history’s largest project
to label people and act on those labels.
 It is doing it through a new mini-industry centered
on media planning and buying.
Summary
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 Media agencies, data companies and marketers are
working with media firms (publishers) toward the
goal of labeling individual consumers (often
anonymously) with demographic, lifestyle, social,
and other characteristics as a result of tracking their
behavior across digital media.
Summary
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 The new institutional arrangements are profoundly
influencing publishing norms and activities.
 And they are encouraging a trajectory toward
increasing social discrimination via the media.
The Theme of Consumer Power
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Among academics:
 Nicholas Negroponte
 Yochai Benkler
 Henry Jenkins
 Clay Shirkey
 Cass Sunstein
The Theme of Consumer Power
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 Among marketers:
 1994: Rust and Oliver predict “the death of advertising” in the
Journal of Advertising. They related it to the simultaneous
increase in media fragmentation and audience power:
In advertising’s prime, producers held virtually all of the
power in the marketplace. This was true in part because
their agents, the advertising agencies, controlled the then
very powerful mass media. Producers controlled the
products, terms and conditions of sale, and the
communications environment. Power has been steadily
shifting toward the consumer. (p. 74)
The Theme of Consumer Power
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 2008: Rishad Tobaccowala (CEO Denuo)
From an iMedia.com profile:
When it comes to connecting and communicating,
people want three things, Tobaccowala says. First, they
want access -- access to content and to people, at any
time, in any place, on any device. Second, they want
participation. And third, they want empowerment. And
not just any old empowerment, Tobaccowala notes.
They want to be like gods, limited by neither time nor
space. Thus, he says, marketers must learn to live in the
world of the omniscient consumer.
The Theme of Consumer Power
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 2009: OgilvyOne report on mobile advertising in
2020:
Pushing messages out to unwilling consumers is
replaced with producing ideas and content that
individuals will seek out and incorporate into their
own world…
Academic Counter-Arguments Certainly Exist
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 Mark Andrejevic notes that we must be aware of
“the ongoing attempt to equate new media
technologies with the promise of empowerment,
individuation, and creative control.”
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 Zwick, Bonsu, and Darmody:
“[Managers are] always on the lookout for new ideas,
products, and services to market, managers are
seeking ways to appropriate, control, and valorize
the creativity of the common.”
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 Jose Van Dijk
 “…user agency as a complex concept involving . . . his
economic meaning as a producer, consumer, and
data provider . . .”
 But where is the most important location of power?
In the “user” or elsewhere?
The Importance of Media Buying
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 My previous writings suggested that marketers and
ad agencies have pivotal roles in shaping a new
media world.
 Part of shaping that world involves the “construction
of audiences.”
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 In my new book The Daily You (Yale University
Press, in November) I go further to show how the
media planning & buying system within the
advertising industry
is most responsible for a transformation that is taking
place in audience-media relationships,
and for the effects that is having on publishers.
The Rise of the Media-Buying Industry
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Media buying before the 1980s-part of full-service ad
agencies.
Rise of “agency holding companies”
Big Four: WPP, Omnicom, Interpublic, Publicis
The creation of media buying subsidiaries
 Today media planning and buying stands as the central
force in the ad system.
Monetary Power of the media buying industry
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RECMA measured media global buying billing
estimate:
$400 billion (2007)
RECMA measured media US buying billing estimate:
$127 billion (2007)
David Verklin (who helped launch US Carat office in 1998)
said in 2006: “'Six companies will buy 80 per cent of all
network TV in the US this year,' he says. 'Ten years ago, many
people in advertising would barely have heard of those six
companies. That's how amazing the revolution has been.'
Media Buying Before 1985
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Agency
Planners
and Buyers
Ratings
Companies
Client
“Publisher
”
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http://www.lumapartners.com/res
ource-center/lumascapes-2
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The key players today
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Media buying divisions of agency holding
companies
Independent media buyers
Advertisers
Media ratings firms
Publishers
Ad networks
Technology developers
Competition/cooperation among them—WPP
(Sorrell) & Google; Publicis (Levy) and Google
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Internet revenues of Big 4
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Company
Headquart
ers
Omnicom
New York,
USA
WPP Group
London, UK
Publicis
Interpublic
Total
Tot 2007
Revs
($ Bil.)
2007
Internet
Revs ($
Bil.)
US
Internet
Employees
12.65
.76
6,000
12.38
.75
6,000
Paris, France 6.38
.40
3,000
New York,
USA
6.55
.40
3,000
37.96
2.31
(6% of tot
)
Globally—over $250 billion
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“According to independent data from RECMA,
MediaCom was responsible for planning and
buying media worth $24.9 billion in 2010,
making it the third-largest agency network in the
world. As part of GroupM, MediaCom brings
global buying power of some $82.2billion
(RECMA) to the negotiating table.
GroupM is the largest media investment
management operation in the world, responsible
for 29% of global advertising spend.”
The media buying industry has developed a new
logic toward “publishers.”
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 It involves a redefinition of how to evaluate a
successful advertisement.
 The targeted “click” and the mantra of
accountability
 The click broadly understood as the indication of
direct human response to an advertisement
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 This need for increasingly detailed
audience constructions in the digital
environment has led to new metrics and
metric technologies.
 Development of cookie, flash cookie (and
respawning), and “super” cookies
 CPM, CPC, CPA, and time with medium
 “Engagement”
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 Retargeting
 Lookalikes
 Data providers and the merging of
cookies
 Social graph targeting
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 Arguments over “the final click”
 The ideal of “the long click
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ALL THESE ELEMENTS ARE PART
OF A BROAD RE -IMAGINING OF
MARKETING COMMUNICATION IN
A WAY THAT RE-ESTABLISHES ITS
DIRECT POWER OVER MEDIA
FIRMS.
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 What we discussed before the break increasingly
threaten the viable pricing of “legacy” publishers
 These requirements continually push publishers
down the food chain
 Example comparing print and digital CPMs by
USA news publishers.
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 One result: Advertisers tell publishers to push harder
to track, target, tailor.
 Publishers use yield optimization firms such as
Pubmatic and Rubicon.
 Rich media and video ads seen as possible saviors;
same with iPads.
Further competing with publishers: Owned media
and earned media
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 The meaning of “owned” and “earned” media
 Marketing communication as the new advertising
 The growing importance of product placement, product
integration (including video games), coupon promotions
(online, mobile, offline), in-store advertising, contests,
and cross-platform coordination
 Metrics: buzz online; offline traffic and ratings; word of
mouth; coupon redemptions, increase in sales.
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 Traditional journalistic norms do not allow for
earned media activities.
 But magazines are diving into it.
 And newspapers are considering it.
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 The demise of media context with the rise of real-
time targeting through ad-buying platforms and
ad exchanges.
 The rise of content farms – eg Demand Media
 The bundling of synergistic editorial and ad content
tailored to targets
Mobile and television: the web on steroids
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 Mobile: The personal target marketer
 Television: The household target marketer
 Visible World, Google TV, Simulmedia—just the
beginning of new approaches to news, entertainment
and advertising
 With and without traditional publishers
 Questions about distribution of revenue in food
chain
What About the Public?
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 The new world assumes the broad sharing of
audience data.
 The public knows it, but doesn’t understand it.
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Public doesn’t like it when it hears about it.
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The World in the Making
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 A world of reputation silos rooted in social
discrimination—targets and waste?
 Reinforcing and creating increased social
discrimination, tensions, distrust
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 Normative balance of segment-making and society-
making media
 The emerging world not totalizing but changing the
balance even beyond segment-making
 The process is just beginning.
 What can be done?
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 Publishers have an interest in taking the public’s
side.
 Rethinking “privacy” as discrimination
 Regime of information respect as goal
 Education in digital media
 Transparency of behind-screen activities
 Ground-level regulations
THANKS FOR COMING!
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KIITOS KUN TULIT!