July 11, 2010

Is TV advertising obsolete?

TECHNOLOGY - In 2005 Sony Canada decided to drop all of its TV ads in an effort to focus on internet marketing.

Even yesterday, with massive advertising campaigns centred around the World Cup final game between Spain and the Netherlands (Spain won 1-0) it becomes questionable whether any of that advertising money will encourage people to buy their product over someone elses.

And whats bizarre is that approx. half of the advertising we see on television now promotes not so much the product or service, but the WEBSITE belonging to that product or service.

And then there's just ads where the product has very little or nothing to do with the ad itself, beyond being a part of the celebration. Like the Coca-Cola ad below:

Does it encourage you to go buy Coca-Cola? Not really. Barely even trying to. Its more about product placement.

Adidas (which at least makes sporting equipment) meanwhile was promoting a computer game on Facebook (branded with their product logo of course). Their hope was to get people hooked on the Facebook game and then try to cash that into more people buying Adidas products.

Television advertising is increasingly becoming hit-and-miss. You can spend millions on an advertising campaign, but there's guarantee whatsoever that companies will recoup those losses. (Of course we're also talking about corporations with such huge profits and likewise large advertising budgets that they don't seem to care any more.)

The problem however is that the advertising landscape is changing. Internet advertising is (with rare exceptions) cheaper, more effective and more likely to result in people actually buying your product.

But the internet isn't the only adverising zone that is growing... specifically the internet on your SmartPhone is becoming a viable option for advertisers. Right now 25% of Canadians have SmartPhones and that number is expected to rise dramatically in the next 2-3 years, eventually all cellphones in Canada will be SmartPhones with the internet at your finger tips.

And then there's SEO (Search Engine Optimization) which is quickly becoming the most effective way to advertise and get customers, especially for small businesses because it places them on an even footing with corporations (which are more likely to waste their money and just write it off as a failed attempt).

Lets take a different sporting event as an example... The Tour de France. When you watch this you are far more likely to see cycling gear and bicycles being advertised... and the yet the sponsors still vary between Radio Shack (which is known as Circuit City in Canada because they went bankrupt and were sold), Quick Step, htc Columbia, Shimano, Cervelo, Vittel, Garmin-Transitions Optical, Skoda, Lampre-Farnese and others...

Seriously, if there's space left on their cycling jersey (including their butt or legs) they will sell it to a sponsor.

As the internet continues to grow more dominant eventually TV will dwindle and non-traditional advertising will replace it. In the coming years television bandwidth will be auctioned off to create more space for cellphones, and television via transmitters won't even exist anymore. Everything will be satellite, cable or internet.

If you're in the TV advertisement business your days are numbered and your competition is increasingly fierce.

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