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As Advertising Dies, So Do Traditional Media

But author Bob Garfield predicts a golden age of online marketing is about to bloom.

Marc Edge 12 Nov 2010J-Source

Marc Edge is an Associate Professor in the Department of Mass Communication at Sam Houston State University in Huntsville, Texas and the author of Asper Nation: Canada's Most Dangerous Media Company. This article first appeared on J-Source and is reprinted with permission.

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Garfield: author of 'The Chaos Scenario'

Pity Sir Martin Sorrel, head of the world's largest advertising agency. Bob Garfield excoriates him not once but twice in The Chaos Scenario for making the common-sense observation that new media will not always be new. New media will "earn a well-deserved place in the media repertoire . . . but will almost certainly displace none," wrote the WPP Group chairman in a 2007 Times of London column.

That sets off Garfield, an Advertising Age columnist who began floating his Chaos Scenario theory in 2005. "Newspapers, magazines and especially TV as we currently know them are fundamentally doomed," he insists in The Chaos Scenario.

The internet is not just another new medium, Garfield claims, but a "revolutionary advance, along the lines of fire" that is bringing about a "historic re-ordering of media, marketing, and commerce."

Recession hastened unraveling

Garfield's theory appears prescient with the startling collapse of advertising revenues in the recent recession. It is basically this: As audiences fragment in the 500-channel universe and especially on the internet, advertisers are defecting from legacy media so fast that newspapers and broadcasters will soon be left without visible means of support. Garfield, who also co-hosts NPR's show On the Media, hastens to add that he's not talking about the death of marketing and media but instead about their dramatic rebirth. On the Internet, of course. Businesses will henceforth spend more of their marketing resources dealing with consumers directly, online. The dollars required to undertake this institutionalized dialogue, which Garfield calls "Listenomics" will come from advertising budgets, which will drop sharply.

Advertising agencies, which are ill-equipped anyway for this type of relationship building, are also likely doomed. In short, we are entering a post-advertising age.

Newspapers, of course, are the most endangered of all, with audiences abandoning them even faster than advertisers are. Radio is next, according to Garfield, because people just don't listen to it anymore in the age of the iPod. TV is in a "spiraling vortex of ruin" due not just to audience erosion, but also to ad avoidance enabled by DVRs. If their penetration reaches 40 per cent by 2012, as predicted, advertisers "will flee" and broadcast TV's revenue structure will collapse. Already the networks are preparing for this eventuality, Garfield claims, by posting their programs online. After its contracts with affiliates and sports leagues expire, he predicts that NBC could be the first network to exit broadcasting entirely for a cable-only future.

Era of video streams and downloads

The internet is inherently unsuitable for delivering the content of old media, according to Garfield, so absent direct payment they will be left without a sustainable business model. But consumers will pay, he predicts, as video streams and downloads overtake advertiser-supported video. With spam blockers, click-through rates below three per cent, and advertising prices dropping through the floor, however, the internet is also maddeningly ill-suited for advertising other than classifieds.

Instead, marketing in the future will be done with "unimaginable effectiveness" though things like widgets, social media, opt-in emails and promotional giveaways on websites like Craigslist. A new Golden Age of Marketing could result, according to Garfield, requiring vast IT resources that legacy advertising agencies simply do not have.

The introduction and first two chapters of The Chaos Scenario comprise the bulk of Garfield's argument, with subsequent chapters being devoted to chronicling harbingers of the revolution he foresees. His feud with Comcast, which arose from his experience with a cable guy from hell, takes up an entire chapter. Garfield devotes another to counseling Mark Zuckerberg on how to monetize Facebook. The curious economics of YouTube, which Garfield dubs "the world's most successful failure" for its inability to attract enough revenue to pay more than a fraction of its bandwidth bill, is the subject of another. Word of mouth, demographics, target marketing, online privacy and citizen journalism are also covered.

Garfield's writing is lively but his language is salty, including the occasional f-word. He takes the reader to such exotic locations as Montenegro, Denmark and Brazil to provide examples that bolster his theory. Whether he is correct or not, of course, will soon be shown by how much -- or how little -- advertising returns to legacy media once the recession eases.

Did it himself

As a new media fundamentalist, Garfield practiced much of what he preaches in bringing The Chaos Scenario to print. It was published by his friend Greg Stielstra, a social networking expert. Its cover was "crowdsourced," designed at a cost of $500 online through a website that allows designers to compete for the work. The book was edited by his daughter, who Garfield boasts caught more than 200 errors. Unfortunately many remain, mostly minor typos and missing or mistaken words. Perhaps his citizen editor was unaware of the rule that states only about 85 per cent of errors are caught in each read-through, requiring at least two thorough edits to reduce the number to an acceptable level.

Garfield also leaves readers dangling at book's end, forcing them to go online for his concluding chapter. The upside of this experiment in online publishing is that PDF copies of the introduction and first two chapters are also posted online. As they set out Garfield's theory, these make a handy summary of his argument.  [Tyee]

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