Cart (0)
business newsYesterday's TV, Today's Economy: "Bewitched"
Today's advertising industry could use some magic intervention.
PRINT
 |
|
Throughout the show’s run, from 1964 to 1972, Stephens worked for the fictional Manhattan advertising agency, McMann & Tate, traveling to the city every day from a comfortable home in what appeared to be Westport, Connecticut.
Had the show continued into the 1980s, Stephens would have had little more to worry about than his busybody mother-in-law and occasionally flighty, but always well-meaning, wife.
For the first half of the decade, the advertising industry in the US continued to grow, maintaining its historic share of almost 3% of GDP. Consolidation within the sector also accelerated, the most notable shake-up happening when Needham Harper Worldwide, BBDO International, and Doyle Dane Bernbach merged to form Omnicom (OMC), still the largest advertising group in the world, in 1986.
But from that point on, with brand loyalty in decline and traditional media less paramount, the industry entered a gradual downturn that has continued, largely unabated, until today. The two-year-old global recession has only made things worse.
When Omnicom released its year-on-year results in September, its numbers showed a 22.5% fall in profit to $165.6 million. WPP Group (WPPGY), the second-largest advertising group in the world, and the international agencies Intergroup (IPG) and Publicis, also showed slumps in their stock price and earnings. Many firms responded to the losses by cutting jobs.
That’s not to say that actual advertisements have been any less ubiquitous. Quite the opposite. Even while the industry has suffered, the number of instruments used to create and distribute ads has exploded.
By necessity, today’s campaigns include multi-platform high-tech strategies that no one, not even Samantha, could have imagined back in the simpler days of Bewitched. Think software that connects ads to searches on Google (GOOG) and other sites, mobile phone ads, text message ads, and social networking fan pages.
To stay in the game, and hang on to their Westport home, where the average house price is 1.4 million, a Darrin Stephens of today would no doubt be forced to become digitally savvy, which is still a challenge for many old school ad agencies, as a columnist at Seeking Alpha has observed.
-
Photo by Silver Screen Collection/Hulton Archive/Getty Images
Some experts predict that the online ad business will become a $65 billion market in 2010, representing 15% of all advertising dollars.
For now, the largest slice of that online pie belongs to search and display ads, which attracts $16 billion in annual revenue, according to the New York Times. But video is catching up quickly.
“The research firm eMarketer projects 35% to 45% growth for the [video] segment for each of the next five years, topping out at $5.2 billion in 2014,” according to the Times.
In the meantime, Google has announced plans to beef up its display ads, giving them the same eerie ability to respond to user information -- like location, age, gender, and interests -- as today's text-only search ads.
To underscore this effort, in late November, the Internet giant purchased Teracent, a San Mateo, California, company that creates sophisticated, tailored display ads for the Web and mobile phones.
With Teracent’s technology, says Forbes.com, “Ford (F) or GM would be able to use the technology to send out a promo for a snow-covered sport utility vehicle to Montana viewers, while those in Southern California might see an ad featuring a convertible.”
Now, that’s beginning to sound a lot like magic.
 |
 |
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
