Will Adland Go The Way Of The Music Business?

In a recent opinion piece in Forbes Magazine, CEO of US branding agency THINKTOPIA, Patrick Hanlon, argues that the internet – much like it had done to the global music business – is and will continue to have serious repercussions on ad agencies.

Hanlon’s argument revoles around the role of social media and the power of consumer. If brands want to know what its customers think of them they no longer need an expensive TVC to engage the customer – they simply go online.

“Through a sense of righteous vocal transparency the consumers rate, rank, sort, measure, hashtag, Pin, Yelp, read, review, test and troll. And, as Huffington Post, YouTube, TEDx and others have proven, such ‘non-professional’ content can be amazingly good,” Hanlon wrote.

Hanlon argues the whole thing looks very similar to what Napster did to the music business back in 1999 when everybody started downloading music for free. It may have been eventually outlawed but the music industry never really recovered.

“In turn, traditional agencies have become job shops that churn out 30-second television shops and auxiliary project work such as print ads, outdoor, co-op ads, stunts, and occasional websites. In contrast to 30 years ago, when advertising agencies owned the whole enchilada, client companies now wonder just how relevant this service is,” he argues.

Hanlon’s evidence is that – globally speaking – 28 per cent of advertisers have reduced ad spends to fund digital marketing programs. Social media network ad spending increased almost 46 per cent from 2013-2014 and by 2018 internet advertising will overtake TV for spend.

Not that Adland has simply sat there on its hands. Hanlon agrees many have attempted to transform themselves digitally in recent times, re-inventing themselves as digital agencies or social experience companies. However, many are still dependent on the 30-second TV spot that wins them awards and allows them to charge big dollars back to clients.

“This top-down content has lost relevance in the face of the consumer’s bottom-up postings on Facebook, YouTube, Instagram and Twitter, which are either come free of charge, or at much lower cost,” Hanlon argues.

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