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 / Summer 2006 / Issue 43(originally published by Booz & Company)


The Future of Advertising Is Now

For media companies, the changes in the advertising sales function will be no less profound. Leaders are already investing in making their ad inventory more interactive, offering new forms of ad tailoring and targeting, organizing their sales forces around customers instead of platforms, and developing integrated solutions that incorporate more elements that were traditionally below the line.

Underlying all these new practices is one fundamental skill: the ability to deal with unprecedented complexity and make choices accordingly. The “million-channel” universe isn’t here yet, but it’s no exaggeration to say that the average U.S. or European consumer has 10,000 entertainment channels to choose from. It was difficult enough for marketers to move from three broadcast networks to 20 cable networks, and then to 45. The fragmentation of audiences and the different ways that different audiences engage further complicate the picture. Each major marketer must learn to develop its own approach to reaching dozens, if not hundreds, of differentiated audiences.

We anticipate that leading media companies will in-source much stronger relationship marketing and experiential marketing capabilities to enable the targeted consumer dialogue and lead generation that marketers crave. Media companies will also need new go-to-market structures with clearer points of contact and differentiated sales and marketing services functions. As the distinction between above-the-line and below-the-line marketing blurs, media companies and agencies have to rethink their planning frameworks and redefine what constitutes advertising effectiveness. In the words of one CMO we interviewed: “The media supplier or agency that knows us maybe even a bit better than we do and can deliver results…that’s the one we want to do business with.”

As in any period of discontinuity, major opportunities for growth and market leadership are being created. At no other time has the potential been so great for smart players, whatever their size, to invent new rules for the game. At no other time have marketers and media companies possessed so many compelling platforms to entertain and engage the consumer. At no other time has marketing been so measurable, accountable, and interactive. Together, these factors are sure to ignite a new era of creativity and innovation in marketing, as well as in media and entertainment. The strategies pursued now by senior management at media and consumer goods companies will play a defining role in who wins and who loses relevance with today’s generation of consumers.

Reprint No. 06204

Author Profiles:

Christopher Vollmer ([email protected]) is a vice president of Booz Allen Hamilton based in New York. He focuses on strategy development, consumer marketing, and advertising sales in media, entertainment, and consumer products.

John Frelinghuysen ([email protected]) is a vice president of Booz Allen Hamilton based in New York. He specializes in strategy development and implementation for clients in media, entertainment, and consumer products.

Randall Rothenberg ([email protected]) is the senior director of intellectual capital at Booz Allen Hamilton, a media and marketing columnist for Advertising Age magazine, and the author of Where the Suckers Moon: An Advertising Story (Alfred A. Knopf, 1994). 
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  1. Des Dearlove, editor, Results-Driven Marketing: A Guide to Growth and Profits (strategy+business Books, 2005): On creating an ROI-savvy marketing department. Click here.
  2. Evan Hirsh and Mark Schweizer, “The Advertising Saturation Point,” s+b, Fall 2005: Discerning the overspend in conventional advertising budgets. Click here.
  3. Paul Hyde, Edward Landry, and Andrew Tipping, “Making the Perfect Marketer,” s+b, Winter 2004: Study from the Association of National Advertisers and Booz Allen Hamilton explores the challenges and opportunities that the media shift creates for marketing departments. Click here. 
  4. Maarten Jager and Steven Wheeler, “Building a Better Matchmaker,” s+b, Winter 2005: The future of automotive advertising starts with the dealer’s interactive “customer-sensing capability.” Click here.
  5. Paul Keegan, “The Man Who Can Save Advertising,” Business 2.0, November 1, 2004: Profiles Seth Haberman, inventor of the Visible World technology for targeting TV neighborhood by neighborhood. Click here.
  6. Nielsen//Net Ratings, “Working Women Online: Media Usage and Purchasing Habits of Online Working Women,” Washington Post/ Newsweek Interactive, 2004: The Internet as the window to the world for busy working women. Click here.
  7. Yuki Noguchi, “TV When — and Where — You Want It: New Video Technologies Free Viewers from the Couch,” Washington Post, February 12, 2006: Mark Burnett and other pundits on the “new prime times” of video-on-demand. Click here.
  8. Randall Rothenberg, “Bye-Bye,” Wired, January 1998: Looks ahead to the death of “big media.” Click here.
  9. Veronis Suhler Stevenson, “Communications Industry Forecast 2005–2009,”: Predicts growth in home video, Internet media, wireless content, and interactive TV. Click here.
  10. Mark Wallace, “The Game Is Virtual. The Profit Is Real,” New York Times, May 29, 2005: Unveils the remarkable global growth of World of Warcraft and other role-playing games.
  11. Nick Wreden, ProfitBrand: How to Increase the Profitability, Accountability, and Sustainability of Brands (Kogan Page, 2005): Cogent guide to sustaining brands in the new-media-driven “demand economy,” where customers expect their desires to be satisfied instantly.
  12. Yankelovich Partners, “2005 Marketing Receptivity Survey,”: Finds that consumers hate advertising, except the personalized kind. Click here.
  13. The Apprentice Web site, Season 2, Episode 4: Recap of the Unilever tie-in episode, in which contestants created a Dove TV commercial, after which Dove Web site traffic increased 1,500 percent. Click here.
  14. Jack Myers Media Village, Former CBS-TV sales executive’s Web site reports on declining TV ad sales (in May 23, 2005, archive) and other new media harbingers.
  15. For more articles on marketing, sign up for s+b’s RSS feed. Click here.
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