Conclusion: Advertising is Dead - Long Live Advertising
Advertising has reached a critical turning point in its history. While some assume that factors such as the decline of traditional media and the rise of the interactive and communicative customer will result in the death of advertising, it would be more accurate to suggest that advertising will merely need to evolve to account for the challenges and opportunities these changes propose.
In this conclusion, the author wishes to consider five topics that address ways in which advertising can be reasonably expected to evolve.
Reach out to consumers
Traditionally, it was assumed that customers approached each purchasing decision with a blank slate, knowing only what the manufacturer communicated to them through advertising, and trusting manufacturers' claims over anything else they might hear from the mass media. This has never been true, and has become all the more misguided in recent years.
Perhaps more than ever before, customers seek to have relationships with brands to reduce the amount of time they must spend in buying decisions. There is strong grounds for the increase in customer loyalty, and claims that it is decreasing may reflect that brands were mistaken in their assumption of loyalty of the customers who purchased for them out of other reasons (such as lock of knowledge of other options).
It will remain true that a large part of the customer base will be irregular buyers, and the author suggests that they will continue to constitute about half of a brand's market, though the other half which includes regular and frequent purchasers will account for most of its revenue (a regular customer who buys four times a month provides four times as much revenue as the irregular who purchases once), but at the same time these infrequent purchasers constitute the greatest potential for growth, in converting them into regular customers.
It should also be considered that the burden of knowledge has shifted to the producer. That is to say that they cannot count on customers to undertake the effort to learn about their brand, but must themselves undertake the effort to learn about their customers. Rather than count on customers to discover them, they must be aggressive in communication that their brand offers a good price/quality ratio, inspire confidence, make brands reliable and exude quality.
The notion that word-of-mouth will do the task for brands is an interesting notion, but is not supported in practice. Consider that Apple, which receives great word-of-mouth from legions of rabid fans, spends about $1.1 billion per year in advertising. It's also been shown that most "opinion makers" merely pass along information they have received from the mass media, and the few (1%) who create "original" content are often heavily inspired by information they receive from traditional advertising.
Understand the ecosystem
It has been a general principle that advertising done in a sporadic and inconsistent manner is less consistent than advertising that is carefully planned and managed to send consistent information to the market - and this is all the more important in an era of customer-driven communications, in which neither the advertiser nor the channel is effective in controlling which prospects see which advertising, and in which anyone can see everything you publish in all channels whether they are the intended audience or not.
The "interaction and cross-fertilization" of media is not merely a liability, but also a considerable opportunity for the firm which manages its advertising well, to send complementary and reinforcing messages to a broad audience via all channels.
In addition, consumers add their own voices to the mix, though recall that only 1% of the audience creates original content and 9% interact with content created by others (the advertiser or the 1% of other users).
All things considered, the public image of a brand is an "ecosystem" into which advertising is only one input, and the lines between the sources of information become blurred. Monitoring and managing the total information about a brand is of tantamount importance.
Consider the whole human
Considering people as merely "customers" draws a distinction that does not exist in nature: they do not separate their purchasing habits from the rest of their life, and in fact purchasing is merely an activity in the context of a more complex system of behaviors.
In seeking to purchase products, people consider not only the need a the product is intended to fulfill, but a number of issues that touch upon their self-identity: whether they purchase brands that reflect their political agenda, how others will perceive them for using a brand, whether they approve of the behavior of the firm behind the brand. Increasingly, traditional concerns of cost and quality are pushed aside as a customer's purchases are guided by these "secondary" concerns.
This can also be a benefit or a detriment to the brand managers: customers will be attracted to brands that align with their agenda, be repelled by brands that conflict with it, and be neutral where little is known. Aligning the brand to the whole human, not just the human in the act of consumption, is increasingly critical to success in gaining preference and loyalty.
However, it must be conceded that customers do not act with complete integrity in their purchasing decisions, but instead balance conflicting desires or objectives. An individual may speak of the importance of the environment, and may publicly praise one brand and castigate another for their support of this cause. But at the register, their decision may be driven by different factors entirely - such that many castigate the brands they purchase, and praise those they do not.
Choose your consumers
In the present marketplace, it is in most instances impossible to be a brand that will be beloved (and purchased) by everyone. Instead, a brand must choose its consumers, and present itself in a manner they will find appealing. In other words, the brand must determine its own personality, one that is distinct from others, and recognize that some customers will choose it while others will not. Much as in social interactions, a brand that tries to be "everything to everyone" will end up meaning nothing to anyone.
There's also a brief mention of providing genuine value. People do not by a thing-in-a-box but are seeking to solve a need or accomplish a goal, and give their loyalty to brands that are actually useful in their doing so. This should be obvious, but many brands become so distracted by intangibles and secondary concerns that they lose sight of their unique selling proposition, and compromise their own integrity.
The selling proposition of a brand must be a combination of emotional and informative messages. Information without emotion gets little attention. Emotion without information gets attention, but does not direct the audience to take action (to purchase the brand).
Advertising that sticks
In the present age of information overload, it's not enough simply to ensure that an audience is exposed to an advertisement or has an "opportunity to view" but to actually get attention in a way that the brand "sticks" in the mind of the prospect so that it is recalled when buying decisions are made. Ultimately, getting people to see an ad or claim to like a brand - your goal is getting them to buy the brand.
Creativity in advertising takes attention and stimulates brand recall, but has not been shown to lead to increase in actual purchasing behavior. It must communicate a unique selling proposition that is relevant to prospects who are likely to purchase, both directly and indirectly (influencing opinion makers who will influence others). Unless there is a clear and compelling reason to buy, people won't - though they may recall the brand and say the commercials are "cool."
Is Advertising Dead?
So the final conclusion is that twentieth-century advertising is certainly dead, or at least dying, and it's only a matter of time before brands that continue to use its archaic techniques come to recognize that their advertising dollars are being wasted.
But a new form of advertising has arise to take its place. Twenty-first-century advertising that reaches a specific audience, serves their specific needs, and speaks to them in specific ways is shown to be effective, particularly in environments in which the promotional practices of most firms have become commoditized.
So the question is not whether you advertise, nor how much you advertise, but how well you advertise that will be a determining factor in the future of your brand.