What are the challenges facing the advertising industry?

Answer 1

You can still catch up on business tips and expert advice with the OPEN Forum App - for iPhone or Android. Learn more

Be the first to comment on this article

If the predictions are right, 2012 will be a good year for the advertising industry. ZenithOptimedia is predicting a 3.6 percent increase in advertising revenue over 2011. The prediction was even slightly increased late in the year due to signs of an improving economy, such as growth in retail sales and record Black Friday sales of $11.4 billion. Additionally, the 2012 Olympics and the 2012 Presidential Election are expected to steadily increase the advertising dollars spent.

Most likely, the trend where dollars are spent will follow the same path as 2011, with increases in internet and cable TV advertising and decreases in newspapers, magazines, network TV and syndication. But even with the positive news, the significant changes in the advertising industry and the economic downturn in recent years has left the industry with many challenges.

Staff turnover

The recent recession has left a large impact on the staff of advertising agencies. Many agencies downsized or laid off employees while other employees moved to different industries because they were unsure about their jobs. These changes resulted in high turnover at many firms, which weakened client ties to the agency because many people that clients had developed relationships with were no longer at the firm-or may not be there tomorrow. The lack of consistent relationships makes it easier for a client to take their business down the street. (Get advice on how to hold on to your best employees.)

"Perhaps more significantly, it's difficult to maintain consistent creative approaches and media buying strategies when writers, art directors and media buyers don't remain agency employees beyond one airing of an ad campaign," says Bill McCabe, CEO at TV ad agency A. Eicoff & Company.

The role of print in advertising

For many years, advertising agencies focused primarily on traditional print advertising, along with television media. But the Internet and social media have dramatically changed the role that print advertising plays in a company's overall strategy, and advertising agencies must determine the new role for print, if any.

Sandra L. Brooks, with BrooksLacayo, an advertising, branding and PR firm in Jacksonville, Fla., says that she is not convinced that print will go away entirely, but that the use of e-readers and other devices will simply increase. "For agencies that have kept pace with technology advances over the past 20 years, this progression should be viewed as logical next steps and not be daunting. But if a young agency is trying to get in the game, building the internal knowledge and/or external resources takes time and patience," Brooks says.

Evaluating the effectiveness of content and brand marketing

Content and brand marketing have become a leading advertising strategy in recent years. But one of the challenges is evaluating the effectiveness of this type of advertising and selling the client on the ROI of brand marketing. Advertising agencies will need to master brand marketing and also be able to quantify the increased revenue to clients. The industry will also need to work to focus more on the customer than the client with this type of marketing. Those agencies that turn the art of brand marketing into more of a science will find themselves with an edge over others.

Effectively using social media to sell services to clients

Social media has dramatically changed the advertising game and presents many challenges for advertising agencies. Some of the hurdles include using social media to make money for clients, successfully integrating social media into overall campaigns and convincing clients that hiring experts in social media can be more effective than doing it themselves.

"The broad social media phenomena is a game changer for the advertising industry and must be integrated with traditional campaigns," Brooks says. "One of the challenges is that virtually every individual with a Facebook page believes themselves to be experts and hang out their shingle. Doing it right is hard work that requires a strategy for capturing followers, responders and a specific action beyond 'like.'"

The challenges might seem significant, but the changes and obstacles give agencies many new chances to stand out from the crowd. And although the technology seems new, it provides more opportunity for creative and innovative thinking in the industry.