Is Advertising Dead?

This is a video of a Churchill Club panel (9/20/06) that I moderated called Next Generation Insights. It featured six Silicon Valley young adults whose ages ranged from fifteen to twenty four.

These are some factoids that I found interesting:

• They send as many as 4,000 text messages per month from their phones.

• They watch one to two hours of TV per week. And they use Tivo or a recording device to fast-forward through commercials during that short timeframe!

• They all have iPods, and they are very loyal to Apple.

• They buy approximately forty songs a month on iTunes.

• Helio is the hot phone (though none of them had one). I had never heard of it before!

Here’s a good analysis of the panel. The bottom line message is that before you waste your marketing dollars, you should watch what the panelists had to say about these topics:

• Their fascination with MySpace and FaceBook.

• How they use their cell phones—and seldom use a landline.

• How they use computers—and Microsoft Office!

• The surprisingly high degree to which they resent being “marketed to.”

• The even more surprising degree to which “old media’ like magazines (specifically Wired for the males and US for the females) are effective.

• Their dislike of online advertising whether banner, pop-up, or an ad running before or after a free video clip.

When I asked how advertisers can get to them, there wasn’t a lot of good news. Product placement may work if it’s subtle (specifically in The OC, Tivo be damned), but it sure appears that most forms of digital/online advertising are dead in the water for reaching young people. This is a whole new world...

---

One panelist’s mom followed up with me and gave me this list of the sites that her daughter visits:

• Perez Hilton

• The Superficial

• Defamer

To put it mildly, I didn’t exactly have these bookmarked or in my RSS feeds. :-)

---

One more interesting point that has nothing to do with the panel. Note how useful it is to have tags in a video like this— that is, the difference between Veotag and GoogleVideo.

• Veotag version

• GoogleVideo version

---

Comments

[Andrew]

In my opinion anyway, I don't think there's a one-size-fits-all approach to marketing. A B2B business probably won't need advertising dollars if it generates its most profitable customers through word-of-mouth.

Yet, a more commoditized product for the masses probably needs advertising. Advertising builds brand awareness, which builds trust and credibility. Of course, that translates to more purchases.

[Innovation Zen]

Advertising will need to revise itselft, that is for sure. Companies will need to deliver more relevant content that customers will be willing to watch.

[Mike Johnston]

Just because advertisment spending grows does not mean that it works. Conversion tracking was not possible in "traditional" or "old school" ads. Ad spend will move to where the metrics are which will incidentally be more targeted, not broad.

[Ariel Ekgren]

Advertising is not dead and won't be for a long time. Guy, you if someone should know. You work as a venture capitalist. Advertising and branding will allways be a big part of the corporate world and it won't ever in my opininon go away or be superfluous.

[littlepurplecow]

No, but not evolving at the speed of youth.
Billboards and magazines, huh?

I think there is a big opportunity in sponsorship...companies/brands that can bring valuable/entertaining content, services and new experiences to online users. The Smirnoff Tea Partay music video on YouTube (viewed more than one million times) is a great example.

Love the VeoTag viewer. Very nice to jump within the video.

Great post, Guy.

[John C. Randolph]

Advertising dying?  

I WISH!

-jcr

[Darek S]

I love the veotag idea, it's great. Hopefully more of your speeches will be published with tags ;)

[noodle]

Too bad you didn't have any seventh-grade girls. To quote one ... "MySpace is so over. Too many pervs and freaks." How to make a perv-less myspace...that is the question. Myspace is increasingly way too hostile a place for teen girls who rule the social-networking space. There's an opening for a cool competitor who gets it. Which is why helio will be ho hum.

What's getting cool? Check out teen "second life" Except it runs slow. Second Life is really social networking, not a game.

[ann michael]

To support John Dodds (and provide my own limited sample of my three teens - 1 girl, 2 boys). My children constantly have the TV on AND are on the computer (or their cell phone - or ALL THREE). The issue with teens (as with many of us a bit older) is divided attention. None of us do one thing at a time anymore - which I suspect makes advertising a whole lot harder!

[John Dodds]

How many people noticed the panel undermining the way blogs are counted in many surveys? All of them actively used Facebook or MySpace and yet none claimed to have a blog.

[ZF]

Wow. I can't believe you could present this as something new, or your idea, as you appear to do in the video. John Battelle did the exact same thing at a Web 2.0 Conference, and it has been done several times since, including I believe at a News Corporation conference.

***************

Two questions:

- Where in the video do I present this as something new or my idea?

- Are you French?

Guy

[John]

It's funny, though, no matter how many times someone declares advertising dead, people keep paying attention to it and it keeps working.

And if you think brands don't matter to young people, watch them buy clothes.

[Martial Development]

One or two hours of TV per week? I've always wondered where I could find the "4 hours of TV per day" people that Nielsen says fill this country; I don't think I've ever met any.

[Kempton]

I will read the materials and watch the video and come back with more.

In the mean time, here are some of my postings (currently 10) on Advertising if people are initerested to read up on some cutting edge stuff. And based on these stuff, I suspect Advertising is very alive and well. It is just that people outside of the Ad world is looking at those all so last decade definitions of Ads.

Cheers,
Kempton

[Brian]

Helio was written up in WIRED a couple of months ago: http://www.wired.com/wired/archive/14.03/helio.html

[nichampagne]

I'm 26 and from Iowa, the middle of nowhere, and I agreed with most of what the panel said.
I don't text nearly 4000 a month, more like 50. I rarely use IM.
I don't use MySpace but I do use Facebook, its the new and improved telephone book.
I don't watch much tv (local news), I only have basic cable (15 channels) because it came with the cable internet.
I despise advertising as well. 95% of ads online are for nothing. The remaing 5% are only glanced at if I already know what it is, but I never click on an ad. I'd just go to google and look up its website. You can never trust click-on ads anymore.
I think to reach young people you need to put out a quality product and get it in the hands of the people your target market watch. Be it celebrities, tech magazines, quality blogs. I am much more responsive to word of mouth than ads.
Oh, and the media (mainly cable news shows) are going down hill fast. They are the modern day Chicken Little. They take everything to the extreme and its annoying. Which is why the Daily Show is so popular, cable news is so easy to make fun of.
I just want the facts, not what you think the facts are, or what you want the facts to be.
You need to put out a survey like this. I would love to see the results from 18 - 25 year olds.

[Christopher]

Guy, how can you possibly be surprised by the marketing results? When was the last time you clicked on an ad and then bought something?

Think about it from a young person's perspective: We're all poor. I myself am finishing up my PhD, so I've only had enough money for food rent my entire adult life. The Helio comment is especially telling; what's the use in having a product everyone admires but no one can afford?

Advertising is, for the most part, useless. Advertising to young people is especially counterproductive. I, the technologically-savvy pauper that I am, only buy stuff rarely, and then base my decisions on either (1) expert comments, or (2) my own research into the topic.

It seems that companies would do well to enhance word-of-mouth marketing by selling the "wow" products and providing reasonable customer service. Beyond that, they can try to educate the consumer by providing the facts on their and competing products.

As for product placement, that can work though it has to be subtle. Steven Spielberg's recent movies are great examples of how NOT to include advertising.

[Jason Brown]

I'm the co-founder of www.itokhelp.com, a computer support company that fixes computers right through the internet. Originally, we thought the baby boomers would be our primary market, but we have been overwhelmed by support requests from college kids. As tech savvy as this generation is, many of them don't know or care about the basics of maintaining proper computer security.

It seems many are less interested in the technology itself, and more obsessed with function. This is why I think more simplistic, stylish and function oriented products like the iPOD have done so well with this market. I believe many tech companies in the past few years have missed the boat by assuming that the 14-18 crowd is a bunch of nerds who want crazy gadgets. They don't want crazy gadgets, they want amazing functionality that blends seamlessly into their lives.

One last thought, VeoTag beats the pants of Google video. Thanks for letting me know about it Guy.

[Doug Karr]

I can verify all but the text messaging. Instant Messaging is my son's choice. I replied to a similar post with info on my son's habits and they supported many of the conclusions that you reiterate.

[John Dodds]

Interesting viewing but Silicon Valley is not the real world and six people do not a sample make. While I agree that advertising is dying, the TV viewing figure is at odds with the much larger LA Times survey of teenagers and young people that I referenced in my blog in August. Here's one finding from it:

Myth: Time on the computer has replaced all those hours spent watching TV.

Truth: Almost half of teens said they spent up to two hours on the Internet each day, 29% said they spent up to four hours and 15% said they spent more than four hours. Twenty-three percent said they spent more than four hours watching TV. Many do both simultaneously.

[Ed Lee]

Perez has been filed away in my "guilty pleasures" feedreader file for some time now...

[Steve P]

Agree with the majority but my personal survey talking to my two sons and thier friends came up with the following.

Refusal to buy songs from iTunes
Complete lack of brand loyalty
They'll ditch any technology (iPod, Xbox360, PS2 etc) as soon as something comes along thats better and that they can afford

A huge preference to text rather than phone

Other than the above the list was pretty similiar.