Digital & Legacy Media Integration in the Ad Industry

Are the digital and legacy media sides of the advertising industry heading toward greater integration?

Michael Miraflor, who works at the Zenith agency, gave a presentation at the IRTS Faculty Seminar recently. He claims that ad agencies specializing in “digital” only, that is online and other new media, peaked during 2006-2010. Now, he says, agencies that have been digital only should integrate into legacy media (print, television, etc.), and legacy media agencies should develop more digital expertise.

Miraflor observes several factors affecting this trend.

First, clients have begun to chafe at paying multiple agencies, one digital, one legacy media, for one campaign, not to mention coordinating the agencies’ efforts.

Second, digital-only agencies, while able to exploit an expertise that few had developed in the early aughts, are no longer the only ones developing this expertise.

Third, many digital agencies suffered from too rapid growth and undercapitalization. Without a parent or partner agency, these digital agencies could not sustain themselves and became victims of their own success.

Fourth, digital media placement is far more complex to execute than traditional media, raising costs, but advertisers pay lower rates and CPMs for digital advertising, leaving the agency in the crunch.

Miraflor also argues that ad agencies must not focus on digital media at the expense of legacy media. While the “spends” on digital are increasing, legacy media remains significant. Noting that he is now learning the magazine business in addition to his digital area, he suggests that all agencies should cross train their personnel. Cross platform campaigns will become more common, requiring agencies to coordinate among media.

Miraflor’s comments remind me of the 1930s when ad agencies discussed whether or not to enter the new medium of radio. Some agencies resisted, arguing that radio was a fad and worrying that radio work would undermine their relationships with print advertisers. Some agencies (Benton & Bowles, Blackett-Sample-Hummert) specialized in radio, selling themselves as experts in a medium few understood, developing new strategies for the new medium for adventurous advertisers. Other agencies (Batten Barton Durstine & Osborn, J. Walter Thompson) developed radio departments in order to keep their large, traditional clients who wanted to use radio in addition to print. All these agencies also debated how best to use the new medium of radio, some arguing they could simply extend their print strategies into radio; others arguing that radio, an aural rather than visual medium, required an entirely new set of strategies.

As we watch the digital transition unfold, I would guess that we are today at a similar moment that radio was in 1937, about a decade into the radio era: when radio was well established as an advertising medium yet advertisers were still unsure how best to value it and use it. Advertisers today do not doubt they should be using digital advertising. The main problems advertisers have with digital media are how to value and how to use digital media effectively. Stay tuned for about another decade or so to find out.

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4 thoughts on “Digital & Legacy Media Integration in the Ad Industry

  1. Pingback: Building Long-term Relationships | BK Strategic

  2. Cynthia, what did you make of Cliff’s argument to the effect that ad men of the 30s, striving mightily to attain the condition of the respected professional, felt they couldn’t afford to defile the medium with obvious advertising? I know it’s in their association rhetoric, but I have trouble imagining it went even skin-deep, given more believable works like Babbitt and the fact that my own grandpa, at the time, was busy standing up mannequins around his grocery pushcart to make it look like a hubbub (bub).

    As for defining effectiveness in cross-platform advertising..well, first of all, I felt quite legacy myself, reading the name of your speaker’s company; to me, _Zenith_ makes televisions that come with two dials and a clicker. (And we’re back to Babbitt again, aren’t we.) But I’m with the designers of the world of Minority Report, and I suspect that the watchwords will be ubiquity and seamlessness. A few campaigns already manage this: the same campaign, look, ad is in whatever medium you happen to be subject to at the time, and when you get to the point of actually buying, should things get brick-and-mortar, you feel as though you’ve stepped right into the world of the ad. It’s familiar before you get there. At that point the metrics for online, separated, won’t be so important, I think, though people will whack away at them — the point will be the strength and power of the integrated, ubiquitous, unobtrusive campaign, and firms will simply try to keep the costs down in each medium.

    Minority Report’s also very big on personalization, and I think we’re still far from that being a powerful thing. The best personalizer is still amazon, and I don’t know how their algorithms for recommendations work. But i suspect we’re simply not smart enough that way to make it work yet, and my years in retail leave me not altogether surprised. Handselling’s difficult, even if you deal with serious volume and are talented. People are endlessly surprising when you try to feed them specific recommendations from a large universe. So I think we just don’t know how to read cues well enough to have the sort of impromptu personalized-ad experience Tom Cruise gets — and besides, that environment’s clearly hostile to advertising, since all the ads show up as a sort of gantlet to run.

  3. Yes, there was a school of thought in the 1930s ad industry that opposed direct advertising on radio. Many reasons for this: fear of offending their print media business partners; concern that radio should be a cultural uplift medium (educational) and not a direct ad medium; fears that audience alienation caused by direct ads would spill over to purchasing decisions; the problems of applying hard sell strategies designed for print to an aural medium; and so on. Some of it was resistance to a new medium. Sponsorship began as an alternative to direct ads, which mollified some of these ad industry critics, but only temporarily. My article on ad industry critiques of sponsorship spells out that part of the story: http://bit.ly/w3a000

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