The next step in the evolution of advertising

There are three important changes that I have witnessed since I started my advertising career almost 12 years ago. First, we no longer use acetate sheets to make presentations. That task has now been taken over by application software such as PowerPoint and Keynote. Second, the Internet, which was till then mainly used to send mails to our clients, has now become central to engage with customers and prospects. Third, media folks used to sit in the same office as ours and work closely with us as one team. Today they flash business cards different from ours and, in most cases, are competing with us.

The changes above are rather simple and not as fancy as those happening in personal communication technologies. But the fundamental drivers beneath these changes are more revealing. The first and second change are driven by technology. The third change is driven by the realignment of a business model. Similarly, as we look ahead and try to predict the future of advertising, it is important to look at fundamental drivers that could bring about change.

But as an advertising professional and as someone who is interested in visualizing the future, the topic of the future of advertising got me thinking about what will drive change in the future. I foresee three drivers of change.

The first is technology. Miniaturization of processing power coupled with affordable interconnectivity between mobile devices has helped us create an "always-on" world. Social media, location based services, SoLoMo (social, local mobile) are just some of the, and relatively early, outcomes of the development in technology.

Such developments in technology have already impacted advertising in many ways. Advertisers today need to concentrate on delivering a minimum of one of the four things to their constituents: education, entertainment, engagement and the exchange of values. Today, more than ever before, advertising is problem solving. It isn't movie making.

The second driver of change is the role of marketing in the overall business organization. The future of advertising hinges on the relative strategic importance of the marketing function in an organization. Over the years, marketing has been losing its strategic importance in board level discussions. Many CEOs do not think their CMOs are credible.

A 2011 study of 600 CEOs and decision-makers by the London-based Fournaise Marketing Group has startling findings: 73 percent of CEOs think their CMOs lack business credibility and the ability to generate sufficient business growth;72 percent are tired of being asked for money without being explained how it will generate business; 77 percent done with all the talk about brand equity that cannot be linked to actual firm equity or any other recognized financial metric.

This is bad news not only for marketing, but also for advertising because the latter is helping marketing teams realize their plans. If marketing plans do not have board-level support, then advertising automatically is that much less significant in the overall business.

The third driver of change is the developments in emerging markets.

Imagine how the English language will change when 1.3 billion Chinese start using it. Similarly, imagine the future of advertising when big and growing economies of Asia such as China and India, among others, become the biggest advertising clusters in the world. The Asia-Pacific is poised to overtake North America as the largest advertising market by 2014, according to eMarketer. Because of the growth potential of emerging markets like those in Asia, the future of most global corporations depends on their own success in these markets.

Marketing professionals and advertising and marketing strategies adopted in emerging markets will influence the future of advertising. This brings us to the next question - what do the aforementioned three drivers point toward? How will they shape the advertising company of the future?

I believe these three drivers together will lead to the creation of a new type of advertising organization.

It will be a company with digital at its core. It would have a deep understanding of the digital world coupled with a solid capability to deliver marketing and communication solutions. This is a very likely scenario because the next generation of customers would have grown up with digital. These people would not see any difference between their real and virtual worlds. A friend for them could be someone on the same street or someone two continents away. For them, digital would not be a channel or medium, it would be a part of their life.

Secondly, it will be a new advertising company offering a new kind of full service.

There will be a return to full service, but different in the ways we have known about full services of the past.

The new full service would be made up of three basic elements: creative, creative media and creative technology. Creative departments will no longer be the preserve of the art director and copywriter team, but will consist of people who simply have great ideas, whatever their background. There would still be room for skill-specific arts, such as copywriting and scriptwriting, but they will not be the heart of the team.

Creatives of the future would need ever-broader range of skills.

Media will not be about mass media buys that could be left to large media buying companies.

Tech creative departments will build applications and widgets to provide value to people both in physical world and the digital world (digital utilities and services).

Entirely new opportunities could be opened with the rise of predictive genetics. Imagine future celebrities being identified at the time of birth and brands partnering with them from a very early stage. New regulations could be introduced to prevent such predictions from being made public; conversely, this could give privacy and ethics an entirely new meaning.

Thirdly, a new advertising company will be built on collaboration.

The way advertising companies work with their clients and constituents will change significantly. They will be more integrated. The same room will see opinion leaders sitting and discussing marketing plans and communication ideas with marketers, company leaders and advertising company professionals. Such collaboration will make advertising feedback loops shorter through real-time measurement and adaptation.

People don't connect to share; they share to connect. Shareability is now a common feature in most advertising briefs. Social seeders will become a new discipline in advertising agencies in much the same way as planners did in the 1970s. Planners were psychology students who abstracted the target audience into research, data and insight. Seeders will be sociology students who can network with and influence people who do connect with the target audience.

Fourth, the new advertising company will also have new streams of revenue.

The rise of digital has led to the growing importance of a "platform" over "proposition". This is a big opportunity for advertising companies. They can now make money not only on communication and engagement ideas, but more also on creating, owning and revitalizing sustainable platform and engagement assets in the digital domain. The platform opportunity will also lead to new forms of companies diversifying into advertising and the most obvious would be the digital and event marketing companies that can create intellectual properties and products for brands to use to ride via association, presence or plain utilization.

A constant need to improve the product and services for the end user will lead to the need for more hands than the product development teams. This will lead to advertising companies having their own product intellectual property disciplines.

Fifth, there will be a new advertising network in the Far East.

With the development of China's own global corporations, we might also see the birth of a global advertising agency coming out of China. It has not happened yet because global Chinese corporations are still not marketing driven and the Chinese government has not categorized media as a strategic sector. A global agency network would allow Chinese to have closer ties with China's global corporations, many of which are and could continue to be state-owned.

To sum up, I will quote John O'Toole, retired chairman of Foote, Cone & Belding, who once said: "When executing advertising, it's best to think of yourself as an uninvited guest in the living room of a prospect who has the magical power to make you disappear instantly."

As advertising evolves, it will have to look and feel a lot less like advertising. This is what will help it grow and add more value to businesses, brands and society.

The author is planning partner, Ogilvy & Mather, Beijing. The views do not necessarily reflect those of China Daily. This essay first appeared as a part of the Wharton Future of Advertising Project. Contact the writer at fromroots@gmail.com

(China Daily 01/18/2013 page11)