December 19, 2016
The Obligatory End-Of-Year 5-Point Click-Bait List
With 2016 about to come to an end, and me late to the market with the obligatory 5-point click-bait list, let's take a step back from the mundane and horrifying details of day-to-day life in ad land and take a look at the big picture.
Here are the five major advertising industry realities of 2016.
1. Agency Business In Trouble
Several years ago the agency business as a whole stopped investing in creativity and placed its bets on data, analytics, and other disciplines which seemed more promising. Having abandoned their raison d'etre for these apparently fertile and trendy pastures, agencies are now paying the price. They are finding that clients are even more dissatisfied than usual. The momentum for large clients to move their business in-house, or to consultancies-cum-agencies, or to non-AOR arrangements is growing and is a serious threat to the health of the agency business.
2. Online Advertising Equals Google and Facebook
Outside of China, Google and Facebook account for 72% of online ad revenue. Of all the new revenue that came into the online ad industry in 2016, about 90% went to Google and Facebook. The millions of other ad-supported web publishers are fighting over the scraps. The market is speaking loud and clear. It is telling us that with the exception of the duopolists they think online advertising is worthless.
3. The Web Is Evolving Into Television
Gadgets change, people don't. Video viewing is at an all-time high and a lot of it is being done online. Not because "television is dead," but because television is the web's killer app. Over 70% of internet bandwidth is used for video. Every major online player is developing proprietary video content. Consumers couldn't care less about what pipe programming and content are delivered through as long as it is simple, cheap and entertaining. It is only a matter of time until Google, Facebook, Amazon or Apple tries to buy a TV network.
4. Corruption Is Widespread
The ANA investigation into agency media buying concluded that kickbacks and other unsavory practices were "pervasive." The Department of Justice is now investigating agency bid-rigging. The World Federation of Advertisers reported that within 8 years online ad fraud may become the second largest criminal activity on the planet, after drug trafficking. The Wall Street cuties have taken over the ad industry and the culture of anything for money has come along for the ride.
5. Ad Tech Is A Fiasco
Advertisers, publishers, and consumers are all disgusted by the current state of online advertising. Ad tech middlemen are scraping 60-70% of online ad budgets from advertisers and publishers. Over half a billion consumers have ad blockers installed on their devices. 70% of marketers say they are dissatisfied with the current state of online advertising. So who likes ad tech? The people who are taking it to the bank -- Google, Facebook and holding companies.
It seems that every year I write that it has been a pretty shitty year for the ad industry. It's getting tiring.
In other news...
This is my favorite blog post every year. It's the one in which I say it's holiday time and this is going to be my last post of the year.
It's not that I don't enjoy writing this thing, it's just that I keep wondering when I'm going to hit empty.
On the other hand, when you write about advertising and marketing there's really no end to the silliness. So if you search hard enough, you can always find amusing material.
I sometimes think that the only reason for the existence of the marketing industry is to make the rest of humanity seem prudent and levelheaded.
In more other news...
The perfect gift for every business bozo on your holiday gift list is a book entitled "Marketers Are From Mars, Consumers Are From New Jersey." How do I know? Trust me, I'm a blogger. Don't believe me? Read the reviews here (and be sure to read the great Geraldine's review.)
It is available in both paper and pixels. Even though I don't make anything on the electronic version, I prefer you buy it. We need the trees more than I need the money.
In even more other news...
Before I pour myself a festive holiday beverage, let me take time to thank some people.
First I want to thank the people who hired me to speak or to advise or to appear on their shows or wrote about me this year. In no particular order: Comcast SportsNet; NBC; 1000watt; BeanCast; Marketing Book Podcast; Cox Media; Screenforce Austria, Switzerland and Germany; Business Insider; MadClarity; TVNZ; ASIcast; Discovery Networks; IAPA; Worthshop; Software Engineering Daily; Ireland AM; The Irish Times; WPP; National Business Review; Business Day; Media Post; StopPress; Agency Spy; Mumbrella; The Cog Blog; Tech Crunch; MarketingWeek; The Economic Times; The Age; and the organizations for whom I did confidential advising -- you know who you are. I'm sure I've left some groups out, so thank you, too.
Also, thanks to the people who write intelligently about marketing and advertising and whose thinking I steal from shamelessly. You also know who you are.
Most of all, thanks to the people who read this thing and keep it interesting with comments -- especially the brilliant ones that agree with me.
Happy holidays to all, even the bozos who don't agree with me, and I'll see you next year.