Bob Dylan once sang, “The times they are a-changin’.” And in the world of marketing and advertising truer words have never been spoken.
There was once a time when advertising creatives were the authority on idea generation. They were the best mass storytellers and the best attention-grabbers. Today, however, that position is currently under duress. Thanks in part to the proliferation of technology, anyone with a phone, tablet, or computer is now a content creator. The ubiquity of social networking platforms have democratized access for these content creator’s ideas to propagate from person to person. Meanwhile, new analytics capabilities have empowered anyone with an affinity for quants to direct creative placement and inform content development - all of which diminishes the sovereignty of traditional advertising creatives.
Indeed, the times they are a-changin’. But these changes aren’t just bruises to the ego of our beloved, modern day Dan Drapers. They have set the stage for the disruption that the advertising industry is currently facing and will fundamentally change the way our business operates in the short years to come - if not sooner. Sounds like apocalyptic rhetoric, right? I know! Like you, I roll my eyes every time I read one of those “TV is dead” headlines. The difference in this instance is not due to some big revelation of the future on my part, instead, it’s foreshadowing from the past. We’ve seen the dynamics that exist in advertising today play out in other industries and ultimately shake their business to its core. And as they say, history has a way of repeating itself. Case and point, the music industry.
Back in the late 90’s and early 2000’s, record labels invested a wealth of resources in the creation of content. Long session hours in big, expensive studios. Handpicked hitmakers were tapped to make tracks at a premium. Topnotch sound engineers were enlisted to guarantee pristine sonic quality. Top-rate video directors were hired to make the most lavish, over-the-top visual expression of the hitmaker-produced song. Millions and millions of dollars were allocated in an effort to make and sell content.
That was the music business and in those days, business was booming. In fact, 1999 - 2001 were the highest revenue generating years in the existence of the music business. To ensure a profit margin that benefited from this rise in music consumption, record labels discontinued the sale of “singles” and began padding albums with “fillers.” These “fillers” were less expensive to produce and often times considered throwaway songs. This meant that if a fan wanted the hitmaker-produced song, they’d have to buy the entire album to get it, “filler” songs and all. Yes, $17 for the one song we wanted. #Crazy. Of course, this created frustration with the buying public to which there was no viable alternative. That is, until there was. And once this alternative presented itself — the world wide wide — the implication therefore completely disrupted the music industry and irreversibly changed it from what we knew it to be today.
While the Napsters and Limewires of the world certainly ushered in the disruption in music, it was the implications of the networked world, facilitated by the proliferation of the internet, that ultimately did the music industry in. These implications are as follows:
- 1. Ubiquity In Technology - cable companies started offering broadband internet, which enabled more and more people to experience the free music access (peer-to-peer
exchange) that college students had been experiencing just a few years prior. Meanwhile,
computer companies started manufacturing CD burners as defaults on their machines so
people were able to make their own CD’s — from full albums to compilations mixes — with
their newly obtained, free music.
- 2. Medium Shift - the product that the music industry was selling (CD’s) was no longer the medium people wanted (music). The CD’s themselves were simply the secondary medium by which we enjoyed the music (the primary medium) we desired. Once compressed files were made available, whether ripped from CD’s or obtained through P2P sharing, it became the closest medium to what we actually valued, the music.
- 3. Access To Tools - music fans that once longed to be artists themselves now had the ability to create content themselves. Programs like Fruity Loops and Cakewalk reduced the financial barrier once presented by expensive recording studios and now these “amateur”
content creators had technology that allowed them to creatively express themselves.
- 4. Decreased Learning Curve - as access to the internet continued to grow, the growth of communities of people online ballooned as well. Out of this came the benefit of collective intelligence where people began to share their learnings of these new content creation tools across websites with the community via video channels, like Youtube. As a result, amateur music makers learned from each other, which reduced the perceived need to be an apprentice for years before ever creating anything.
- 5. Removal of Arbitrage - previously, content creators required access to radio to get their ideas heard broadly. However, radio airplay was strictly reserved for major record label products. Very few content creators could afford to make music videos, and even if they
could, the production quality and lack of access would keep them from getting their videos
played on MTV. The growing democratization of the internet removed the middleman (radio,
MTV, etc.) and allowed these new, non-major-record-label-affiliated content creators to
reach music fans directly.
- 6. Content Parity - compressed music files often ran the spectrum of sound quality. There was
no sonic standard among most music fans because there was a sort of “you get what you
paid for” apathy when it came to the degradation of sonic quality of their P2P sourced
MP3’s. As such, it didn’t matter so much that the high-end frequencies were EQ’d perfectly
or that the vocal spacing sat just right in the mix. As long as the song was recognizable and
close to terrestrial radio quality, “all good.” This meant that sonic quality was no longer a
discriminating factor between music created in big, expensive recording studios and music
created in someone’s basement using Fruity Loops. Investment in production would not be
the differentiator in how fans valued music, which leveled the playing field for amateur
- 7. Distributors As The Arbiters of Value - in 2001, Apple introduced the iPod and the
accompanying iTunes store. While this new technology and corresponding retail destination
has been written about as the deathblow to the music industry, the implication of their pricing
model is often overlooked. Not only did iTunes’ pricing approach decouple albums and
reinvigorate the sale of singles, but it also turbocharged the notion of content parity.
Essentially, Steve Jobs told the world — and particularly the buying public — that it didn’t
matter if the song was recorded in big, fancy studios with the most reverenced hitmakers
and the best sound engineers or if the song was recorded in someone’s bedroom with a free
music software and an engineering novice, it was all 99 cents. Period. No matter the
investment in the creation of content, it’s all valued the same.
- 8. Bypass The Traditional System - thanks to online retail outlets like iTunes, CD Baby,
TuneCore, amateur content creators were able to get their products sold to the buying
public. Often times, their music would sit in (online) retail, shoulder to shoulder, with some of
the biggest names music, which added perceived value to these amateur’s offerings and
further drove the notion of content parity.
- 9. Overwhelming Supply of Content - with the influx of so much content in the market, from
amateur content creators to superstars with reduced latency between album releases, music
fans found themselves in a state where, for the first time ever, there was more supply of
desired music than there was time to consume it. This created a dopamine cycle for music
fans that would lead to shorter time spent “experiencing” or listening to a particular album or
music releases so the half-life of songs were greatly reduced.
- 10. Access Over Ownership - since there was so much content in the market and not enough
to consume it all, music fans no longer felt the need to actually own music content —
especially if the lifespan of a release was so short. Ultimately, fans just wanted the ability to
hear the music they liked on-demand, which gave raise to platforms like YouTube to be a
music discovery and consumption destination.
These 10 implications led to new vehicles for discovery (YouTube, Facebook, Soundcloud), consumption (iTunes, Reverbnation, Spotify), and creation (Protools, Reason, Logic), which rocked the music industry by the mid-2000’s and forever changed its business. And the advertising industry is facing the fate.
While it’s easy to see the dynamics, and subsequent follies, of the music industry in hindsight, it would be nearly impossible to predict that an industry — in the hight of its success — would experience such unprecedented disruption just a few years later. Fortunately, history has a way of repeating itself so we can align historical data with causality-based theory to increase the likelihood of predictive outcomes. Unfortunately, for the advertising industry at least, the 10 implications that existed in music then are the exact same dynamics present in advertising today, especially in regards to both industries’ emphasis on content creation.
As such, one would expect similar outcomes from similar disruptions. Let’s unpack this further:
- 1. Ubiquity In Technology - technology is in our hands, in our pockets, in our bags, on our
wrists, on our desks, and on our laps. These devices provide the broader populous access
to the networked world and a pipeline to receive communications. Simultaneously, these
device-holders are not just content consumers, they are now content creators.
- 2. Medium Shift - advertising was once primarily dominated by TV, print, radio, and OOH. The
prevalence of the social web has since added new vehicles to the mix. This has become the
most significant way messages, information, products, and behaviors are propagated by
people within their communities. The content syndicated across the traditional mediums are
increasingly becoming the talking points (secondary medium) that we share between our
people (the primary medium) within our communities.
- 3. Access To Tools - at one time, an aspiring content creator would have to work for an
agency to get access to Photoshop or InDesign (the defacto creative software suite) if they
were to actually make something. Otherwise they’d have shove out a crap ton of money to
get a user-license. Today, that is not the case. Aspiring content creators are now accessing
these programs, and the corresponding license key, for free from Reddit or BitTorrent and
finding themselves up and running in no time.
- 4. Decreased Learning Curve - the traditional path for a creative in advertising is that you’d
produce a ton of ideas (that would likely never see the light of day) and get feedback from
the Creative Director until your work is ready. This is a typical right of passage for the
industry. Today, that is not the case. As access to content creation tools grow, people have
begun to share their learnings across blogs and social networking platforms. As such, there
is a ton of content across the web that amateur content creators are leveraging to learn
about the craft of “making things,” instead of being an apprentice for 4 years, waiting to one
day (hopefully) be “good enough.”
- 5. Removal of Arbitrage - previously, if a content creator in advertising wanted to get their
ideas seen, they needed access to media - TV, print, radio, OOH. Otherwise, their ideas
would go largely unseen and their marketing efforts would go unrealized. Today, that is not
the case. Social network platforms, search, email, and other vehicles have democratized
access to people. These information and communication technologies have removed the
middleman (agencies, traditional media, etc.) and allowed these new, non-agency-affiliated
content creators to reach the public directly.
- 6. Content Parity - while advertising agencies tap big directors to shoot over the top ideas that
play out during big (read: expensive) media moments in hopes of getting people to talk, the
content that gets shared the most among people — essentially, the things that people talk
about most — is the content produced by the amateur makers. Grainy photos with
uninspiring font choices. Vertical videos shot with an iPhone. The general public doesn’t
care if the content was shot by David Fincher or a regular Jane Doe. Investment in
production is no longer the differentiator in how consumers value content, which has leveled
the playing field for amateur content creators.
- 7. Distributors As The Arbiters of Value - more and more, publishers like Buzzfeed,
Complex, and Vice are entering the market and offering content creation services for
brands. This is a service that agencies would exclusively provide for brands. When a client
would asks for 5 TV spots, some banners, and a handful of social posts over a period of
time, agencies would bill them for the time it takes to make said deliverables. All the while,
the Buzzfeeds of the world are telling clients that “content costs ‘x’ amount per piece.” So if
you want 5 pieces of content, it will cost you ‘5x.’ As such, since publishers are actually
ascribing costs for content creation, not the cost of time to make it, the publisher’s
determined value of content becomes the closest proxy to the actual product clients want
and, therefore, become the new cost of content creation. No matter the investment in the
creation of content, it’s all valued the same.
- 8. Bypass The Traditional System - if brands wanted content made (TV, print, OOH, radio),
they’d have to enlist an agency to do the work for them. Today, that is not the case.
Companies like Maker Studio (who was acquired by Disney a few years back) have not only
amassed a network of 10’s of thousands of content creators across the world, they have
also developed technologies that (1) make it easy for brands to task, review, and select
creative assignment submission, (2) curate the maker to brand alignment, (3) publish across
a myriad of mediums, and (4) measure the impact of the creative. All of which is being done
without any agency from the agency. See what I did there?
- 9. Overwhelming Supply of Content - with the influx of so much content in the market, from
amateur content creators to publishers, brands have found themselves in a state where
there is more supply of desired content than they actually need.
- 10. Access Over Ownership - since there is so much content in the market and consumers are
seemingly attention-deficient, brands have begun to wonder why they’d need to retain
content creators as opposed to just accessing what they do. As a result, we see a trend
where brands “jump ball” briefs to access the best ideas from a selection of partners — be it
agencies, YouTube stars, aggregators, or even platforms.
These 10 implications have led to new vehicles for discovery (Facebook, YouTube, Snapchat), consumption (Vice, Complex, Buzzfeed), and creation (Maker Studios, Social Native, Vine Stars), which is setting the stage to disrupt the status quo of the advertising industry. I don’t fancy myself an economist but if there’s one thing I learned from my 200 level Econ class it’s this; when the supply is greater than demand the cost of goods will go down. As the aforementioned implications have illustrated, content is in great supply. That is, there’s more content being developed and published than there is a demand for brands to make content. Ergo, if the supply of content continues to exponentially increase (and all signs point to “yes”) then the cost of said content has to decrease. That’s just basic economics. And this will ultimately drive the commoditization of content and reduce margins for agencies that focuses on “making” things.
With content in such an overabundant supply, it won’t be long before more brands start to wonder, “with so much content being produced in the world, why would I reduce my access to it by having just one agency responsible for making it?” And perhaps more importantly, brands will soon say “with such a high amount of content available to me, why am I paying so much for it?”
Indeed, the times they are a-changin’.
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About the Author
This article was written by Marcus Collins, Professor of Marketing at the Stephen M. Ross School of Business, University of Michigan.
He's a culturally curious thinker with an affinity for understanding the cognitive drivers and environmental factors that impact our behavior and socially connect us all. Recognized as Ad Age's 2016 40 Under 40 bright young minds who are reinventing and reshaping marketing's future. He's currently leading the Social Engagement practice at Doner Advertising.
In his own words: "If the core function of marketing is meant to drive behavior adoption then the messages, content, and experiences we create should be designed to catalyzed action. To do this, marketers must leverage the psychological motivators that impact what people do, say, and share in an effort to engineer culturally contagious ideas that extend across both the online world and the offline world. Therefore, my practice is myopically focused on people over platforms."