By Dan Japhet
Think about it. What if there were no brand names tomorrow, anywhere?
Well, first of all, your personal coffee business would go to the most convenient location on your way to work. Five bucks for a latte, forget it. It all tastes the same anyway when you load on the syrup and whipped cream. It would just be called Coffee Store. Hamburgers for sale, $4. LOL.
Nordstrom would be gone. Neiman-Marcus often referred to as “needless mark-up,” would disappear, too. Mercedes would have to compete based solely on eye appeal. TV’s would have to compete based on price. In fact, everything would be sold based on price and appearance, to some degree.
Gasoline is sort of like a non-brand already. Try making a brand differentiation there sometime. The same can be said for products like doughnuts, but Top Pot is giving it a whirl. (I wonder how much of that business is driven by store locations.)
The point is, without branding, how would anything be advertised, except by store-location convenience, size of selection and/or price? Color might be used as a differentiator, but for food products, it still would say “green beans” on the label. And I suppose you could use type fonts creatively to try and make a difference. But then, all the bean producers would do it the same way. And you’d have no brand protection.
Let me think… how can I use digital advertising here to set my green beans apart from the competition??? I could run targeted display ads (directed to people most likely to buy beans), produce bean digital videos and do geo-targeting, geo-fencing (get your beans here, closest to you, lowest prices) and retargeting. But then every other bean producer could run the exact same ad, with just a different address and phone number.
Oh goodness, no brand images for Rolex, Apple and Windermere (“House Seller”—I love that one). Or take away the “Home Depot” name from those massive warehouses and what do you say in your digital advertising? “Hardware stuff.” I’m sure you get my point by now.
Between 2015 and 2020, traditional advertising revenues are projected to grow a total of $365 million, while digital or online will go up by a whopping $482 million. As the graph shows, digital advertising is sucking up all the ad-dollar growth and eating into baseline traditional-media sales.
Consider this. Digital or online advertising may never have existed to any significant degree without the brand names, brand positioning and brand imagery that came well before the digital medium was a gleam in Google’s eye! And guess what positioned those brands—traditional advertising.
It just might be that digital advertising needs traditional advertising much more than traditional needs digital.
Following are the current and projected Seattle ad-industry revenue figures for 2017, by medium. As you read them, think about how brand differentiation is going to take place in the future.
Cable will come in around $59 million this year and experience a steady decline in revenues through 2020. I’m estimating a drop of about 25% between last year and 2020. We should see local cable TV providers continuing to be extremely competitive moving forward.
Projected to be $182 million by the end of 2016 and $152 million in 2020. The only growth that local TV has shown has been due to political schedules and the 2016 Olympics. Market totals should remain in the $150 million range for the foreseeable future. (I know one major TV station that’s down was down 14% last year, compared with 2015.)
Radio revenues this year will come close to $152 million. If you don’t count ad spending on politics and the Olympics on television, total radio revenue would be about the same as local television. However, by 2020, radio revenues will have dipped about 4%.
Digital sales grew by 36% in Seattle in 2016, compared with 2015. Total revenues slightly exceeded $1 billion.
Between the end of 2016 and the end of 2020, digital will grow an estimated 44% to $1.6 billion. Digital advertising is projected to account for 75% of local advertising revenues at that point in time.
This medium will remain consistent at about $58 million through 2020. A number of national media experts have cited OOH as being one of the few traditional advertising channels to efficiently reach 18-34-year-old millennials. (Also see story on Page 22.)
This medium’s Run of Paper (ROP) revenues will be down another 33% between 2016 and 2020. In 2016, newspaper revenues were reported to be $205 million in the Seattle market.
It’s worth noting that The Seattle Times has made truly significant gains in its digital-product offerings, which cover virtually every potential audience.
In summation, I feel like Seattle’s advertising agencies and media outlets are together on a cliff, looking out over the ocean in search of the advertising parameters of tomorrow. And there’s just a glimpse of a message looming on the horizon…and it appears to say, “Eat Here. Get Gas.”
Pub Note: Be sure to read “What’s Your Brand-Love Rating?”
Dan Japhet is the principal of Strategic Media Alignment and a frequent contributor to MARKETING. You can reach him at SMA1@japhetmedia.com.