Drugi jezik na kojem je dostupan ovaj članak: Bosnian
By: Ejub Kučuk, CEO Mita Group Sarajevo
Sometimes I miss the “good old days” of advertising. And I know for a fact I’m not the only one. Budgets grew year in and year out. Communication channels rarely changed because the share of the viewership / listenership / readership rarely changed. The media tried to produce quality program. Quality articles were made and quality editorials paid. Attitude towards what was said in public was responsible, there were no inflated and fictitious sensations. Headlines didn’t start with “you won’t believe…” Clients’ sales grew. Investments were made in people. The entire industry went to the festivals. Parties were organized. An entire generation of middle management was growing up together with mutual respect, while boards were slowly filled.
From today’s point of view, for us, better times for the advertising industry probably have never existed nor will ever exist again. However, even then there were a lot of dissatisfied people. As time passed the discontent escalated and long time ago broke the threshold of pain. And yet, every generation has its own “good old days.” So will the new generation of marketing experts talk how good it was in this time. Their enthusiasm will never be higher, and the expectations today are lower than they will be in 10-20 years. That’s why I think it is the right time to sum up the past and present in one place. Because the same mistakes are always repeated, and time and technology don’t play a big role in it.
FAVORABLE MARKET TRENDS AND GROWTH OF THE INDUSTRY IN THE 90’s and 2000’s
It often happened that the demand is higher than supply, so in many companies, media and agencies growth was caused by positive trends, and only in rare cases, it was caused by the real art of business, analytics, sales, proper budgeting … At even the smallest decline in budgets, the number of clients or sales, the main market players reacted violently, accusing the market, and given that they didn’t know how to return the lost turnover in different ways, in most cases they dropped their prices, hoping to increase revenue. Once the prices began to fall, they never stopped falling, so the revenues of the entire market became increasingly smaller. The reason – the number of purchased GRPs remains the same, so when you multiply it with lower price, you are left with lower revenues. Market once disturbed rarely goes back to the old standing. Conjuncture reflected itself as a “disservice” :) , and the situation spilled from TV houses and media agencies to other media and the market as a whole.
LOANS WERE TAKEN
New businesses quickly sprung up with the growth trend. New staff was hired overnight. Profits were made on all sides. Offices were changed often and grew in space on an annual basis. The quality grew relatively slowly because it took time to train the staff, to overcome the workload, but revenues were still much higher than the investment in development. Not knowing what to do with the surplus income, many burdened these surpluses with 10 times larger loans and began to invest in buildings, cars, watches, clothing, yachts … Before we knew it, the stars of our region looked far better than their counterparts from the Madison Avenue. Instead of long-term financial stability and resistance to stress, investments were made in short-term pleasures. Expensive habits had remained long after the fall of the market. Work can be changed somehow, but habits are much more difficult to change, so the anxiety began to gush from every conversation and from every business decision.
FINANCIAL EXPOSURE OF THE MEDIA
Media ratings were fitting for the Guinness Book of Records. Produce a domestic sitcom – RTG 30, air Ally McBeal – madness ensues, publish a smaller affair – circulation is through the roof. A couple of media and viewers, listeners and readers to spare. The market was growing, the money was coming from all sides, 2/3 of what we order the media return because all their promotional blocks are “packed like sardines”, a whole month in advance. Loans were taken on stable income, large buildings were bought at premium prices, studios were built, hundreds of people employed, equipment bought… Revenue plans were made based on the previous years instead of being based on projected growth / decline in production, GDP, consumption … And these indicators were clearly showing that revenues will be declining for various reasons. Needs were growing, incomes falling, and nervousness was compensated by the price, for which people started saying “there’s always lower”. Shortly after the real estate market fell and the recession ensued. Low resilience to financial shocks affected all. Desperate and loan-burdened media and some agencies were blackmailed by clients in negotiations, as the prices spiraled down into the abyss. A deep chasm whose depth has never been measured. Maybe we have touched it this year, after all, it’s been eight years since the financial crisis broke out.
DON’T ROCK THE BOAT
I don’t know if anything ever annoyed me in business more than this saying. For the uninformed, “don’t rock the boat” means don’t change anything that has been well oiled, because otherwise you disrupt the market, you disrupt order on all sides, the arrangements of the budget … You look for better quality content – don’t rock the boat man. You try to insert a new media in planning – don’t rock the boat because the prices will go up. Penalize price damping – don’t rock the boat because we need good relations for the xy client. Can we increase digital budgets – please don’t make me explain it to the management, or don’t do any foolishness because TVs might go crazy. You contact a client – half the industry comes crashing down on you because you are provoking a pitch … Now you can rock the boat, but waves are long gone, and everyone is left high and dry :) .
NEW MEDIA AND NEW TECHNOLOGIES
We used to talk about new media (interent, YouTube, Google, social networks), which have appeared, then we talked about new media that are here to stay. iPhone is over a decade old, Facebook, Linkedin, Yahoo, Google, SEO and SEM even more. I don’t know why we still call them new media when these are traditional media for my children, and our traditional media seem as if they are nonexistent for them. Digital media have forever changed the shopping process for a number of products. They have democratized the media, sales and distribution, and have enabled everyone to become a competitor in any area. Some failed to recognize this in time, and today they blame everyone, still not getting that the comet has struck long ago :) .
INCREASING DISPERSION OF THE TARGET GROUPS
The democratization of media through social networks, aggregators and blogging communities has enabled audiences around the world to become even more dispersed. It’s never been easier to find people with the same interests, to produce and share with them the content that is elsewhere impossible to find. It’s quite possible that today you can’t find a buyer in the local channels because their life is tied to the communities far beyond our continent. Therefore, microtargeting and finding your way to the target groups, as well as seeking the right moment to serve a message, has become really difficult. In order to reach today the 90% of the target group of 25-45 years of age is much more difficult than it has ever been, and it will be more difficult with each passing year. Some could not get used to that so they are no longer here today.
DIGITIZATION AND CABLE
Man did this have an impact on traditional TV stations that relied on terrestrial coverage. Through cable and IPTV platforms you can watch everything produced in the world the same day when it premiers in the US, instead of waiting for a decade for it to appear on your national TV. Even the much stronger stations than the media from our region don’t have an answer to Netflix, HBO, Fox … How can you produce even remotely good program? How do you respond to niche specialization that allows far better audience impressions with far less investment? Cable and IPTV broadcasters are far better suited to dispersing audiences that are increasingly turning to specialized channels / portals / social networks … The ratings are measured in real time, while the compromised peoplemeters with an unknown pattern we have to wait for 24 hours. The money is slowly moving to these media and is leaving the traditional broadcasters.
INSUFFICIENT DEVELOPMENT OF STAFF
The fall in revenue has reflected in the number of employees on all sides. Investments in education are much lower because the new generations are changing workplaces much faster than before. There are fewer people who can and want to transfer knowledge, and even when you find those who want to share their knowledge, the new generations are unwilling to listen … Schools and colleges haven’t changed since the Stone Age. Not only are they spewing out kids unprepared for any kind of job, but also kids used to “cramming” instead of being agile in the digital world. 99% of those who enter into our contests don’t meet any of the requirements that we state in our competition (a designed CV and a creatively written letter of intent). 95% of those who qualify for the second round don’t know how to properly analyze the target group or a client’s competition. The market is becoming increasingly difficult, target groups more elusive, quantity and positioning of the channels you use to “capture” customers more and more complicated. The ball increasingly thickens :)
NEW BUYERS, NEW CLIENTS, NEW COMMUNICOLOGISTS
This is where the real chaos arises :) . New customers are not interested in anything that had interested their parents. TV spot that they like will never conform to the standards and values which the big brands advocate (unless you’re from the gaming or internet industry). They use media when they need to, without a pattern, and only to connect, get informed, figure out how to do something or to entertain themselves. News and events in the world are of no interest to them. They are not interested in history. Mozart is the founder of betting shops… :) . They can find on YouTube everything they need in life. Lifestyle articles are wasted time as far as they are concerned, because they have bloggers who explain it all much better. They use their phone only when they need to and pay as much as is necessary to prevent their number from being turned off, or enough to use the internet that solves all their needs. They don’t even dream of making a commitment and signing prepaid contracts for anything. They party via Skype – all in their own homes, with juices and snacks in front of them, sharing music and videos, or playing a guitar… They have no respect for the past or us from the “old guard” since we are “clueless” :) .
New customers and new communicologists come from this same target group, and it will be interesting when all come together. :)
CONCLUSION: All this will be repeated to the next generation of professionals, agencies, media… Because new generations will come, and new agency will arise, not wanting to learn from the past. Advertising will always answer the same questions (what, to whom, where, when and how), and in the process, only the answer to how is becoming more complex. May our marketing future be merry and happy. I plan to keep pedaling as long as the bike serves me. I’ve learned a long time ago to pedal uphill with my eyes tied shut and with tires deflated, enduring anything they throw at me :) . Sometimes it’s not pleasant, but it’s really interesting when you get used to it.