Want to Understand Advertising in 2017? Read This.

In the new year, brands and agencies must stop the blame game, and stop looking backwards.

by Todd Lombardo and Christian Jacobsen

2017, we’re happy you’re here, because now is the perfect time to take stock, and decide what we want to accomplish in the year ahead.

For us, it’s continuing to push our clients (and ourselves) to recognize that the world of advertising is in the process of changing forever. And it doesn’t take but a few headlines to get a sense of this:

Lowe’s Uses Facebook Live to Unveil Deals

Amazon Prime Video Expands to 200 Countries, Challenges Netflix

Snapchat Is Beginning To Use Machine Learning To Improve Ad Targeting

Many marketing folks are unsure of their footing today. Well, join the club; even Don Draper would probably feel the same. So brands blame agencies for not innovating fast enough, and agencies blame brands for an unwillingness to take risks. Good or bad, you’ll find what you’re looking for, and there’s more than enough blame to go around.

The real truth of the matter is, advertising is changing in spite of the blame game. Ad skipping is a real thing. So is ad blocking. And ad free environments account for billions of hours of media consumption (see Netflix’s 86 million subscribers). As ESPN’s TV viewership has declined, Facebook hit 1.8 billion monthly active users, so it’s no surprise that digital ad spend is — at long last — projected to eclipse TV spend this year.

These changes are happening whether we like it or not. And here’s what you have to know: there is one fundamental, strategic change that is driving a lot of this:

Control has shifted.

This isn’t rocket science, but it is oh-so-relevant: viewers have more control over what they watch — and what they DON’T watch, including ads. Or, using classic marketing vernacular, what used to be a push model is now evolving to a pull model. Cord cutters and mobile millennials get to pick a lot of the ads they are exposed to. Not all the time, but enough to make a difference. Think: 5-second skip on YouTube, or swiping on Snapchat.

If advertisers and agencies want to thrive in this modern media culture, they will need to understand four transformations, currently in progress.

Recognizing that people have more control over what they watch is the first step to embracing modern media culture.

Madison Avenue → Everybody’s A Creator. We used to celebrate the Creative Director. Legends walked the halls, spoke on panels, and created the next great TV spot for the Super Bowl, or NBC’s Must See TV. Shiny statues were placed on high shelves, and we all ran home to watch Seinfeld. Today, TV spots still matter, and we’ll always have the Super Bowl, but these days, the “Creative Directors” getting the headlines are folks like PewDiePie (who just passed 51 million subscribers, making him the biggest YouTube channel on earth). And Bethany Mota. Smosh. Grace Helbig. Jenna Marbles. Tyler Oakley. GloZell. The internet famous adorn the digital walls of Instagram, Snapchat and Musical.ly and get mobbed at Vidcon, taking in brand dollars to custom-create fresh videos for millions of viewers. Today, anybody can be a creator. Just ask James Corden.

Big Media → Active Media Platform. Oh, for the easy days of TV, print, outdoor and radio, with a little direct mail thrown in to make it spicy. GRPs, ad pods, and millions of Nielsen audiences made for incredible opportunities, giving rise to the media buying companies — and media conglomerates — we know today. But a funny thing happened on the way to the insertion order: little social media platforms like Facebook, derided as the stuff of millennials and interns, got millions of users, and billions of views (see also Snapchat, with 10 billion daily video views). Facebook has more potential reach than any TV show these days, which is why we should be treating Facebook like a grown-up. The new media world is made up of platforms — not broadcasts. Yet advertising still hasn’t really acknowledged this.

Big Brands → Any Brand. The bigger they are, the more they spend. This is why brands like Coca-Cola, McDonald’s and the P&G family are so dominant in our lives. They can outspend their rivals — not just on TV, but on shelf placement, product tie-ins, sponsorships, and more. So if you’re a start-up brand without a billion dollar marketing budget, what do you do? You forget the big TV show. Take Harry’s, the little razor company that took on Gillette and others, and built-up a direct-to-consumer business model instead. And instead of big media, they went with new media, engaging hundreds of thousands of Facebook fans to share their passion. Today, half of the razors sold at Target are Harry’s, and Unilever bought Harry’s competitor Dollar Shave Club. No billion dollar marketing budget required. (Only now, is Gillette fighting back).

Lean Back Viewers → Lean Forward Participants. Part and parcel with the trends above, show us a millennial, and we’ll show you a cord-cutter, cord-never-er, YouTube creator, or at the very least, a second-screener, whose number one media screen is in his or her pocket. The concept of consuming media has very much changed over the past 30 years. The VCR started us down the path, where we could pause while we peed and fast forward through the stuff we didn’t want to see (often, the commercials). DVR’s made it digital and YouTube made it mainstream on our desktops. Now, not watching is as easy as a swipe. Anyway, people don’t just watch, they fave. And comment. And tweet and snap and live stream. They are active in what they choose to watch, and active in what they choose to share. In this active, lean-forward space, the brands that thrive are the ones that give viewers a reason to engage.

Some have called these changes a decline, (decline in ratings, decline in TV revenue growth, etc.). We don’t think of it that way. We look at advertising as being in the middle of a very big and busy transition, a wild ride where we’re all looking to survive. We are too busy helping brands navigate today’s modern media culture to worry about anything else.

Todd Lombardo is a digital media strategist and editor at Mistress. Christian Jacobsen is a founder, partner and strategist at Mistress.