Advertiser have lost a generation

Advertisers have lost the attention of a generation

By John Gapper

Millennials are as likely to tweet angrily about a brand as notice its ads

They tell you not to fix a meeting before 11am at the Lions advertising festival in Cannes because the guests will either have been up so late toasting their own creativity, or are so jet-lagged after flying in from Los Angeles, that they will not show up. I should have listened. There were other signs at Cannes this week that the advertising industry operates in its own time zone. Seven years after the launch of the iPhone, the smartphone is reaching saturation in developed markets, as IDC, the research group, reported this week. Yet advertisers still treat it as a newfangled invention yet to prove its worth.

In theory, the smartphone is the new television – a consumer technology device through which everyone absorbs information and entertainment. As an advertising medium, however, it is useless by comparison. Not only is there no equivalent in value to the 30-second advertisement but the industry is struggling even to imagine one.

In a generation, we have shifted from parents trying to stop teenagers slumping in front of the TV to young people losing all interest in the box. US teens are so occupied with social networks and mobile video that they watch only about 21 hours of broadcast TV a week.

The ad industry is suffering from attention deficit disorder – the audience that once sat obediently in front of TV spots lovingly devised by its creatives is hard to pin down. Millennials are out there, on their phones and tablets, but they are as likely to be tweeting angrily about a brand as noticing its ads in the content stream.“I am nervous about us all being out of a job a year from now if Reed Hastings [chief executive of Netflix] takes over the world,” Laura Desmond, chief executive of Starcom MediaVest, one of the largest advertising buying agencies, told a Cannes gathering. Netflix, the video streaming service, and cable TV network HBO rely on subscription fees alone and do not carry ads.

A person using a phone to buy products and post on social networks is producing all sorts of data useful to an advertiser

When TV came into its own in the 1960s, it brought mass and efficiency to an industry that had relied on local radio and newspapers. “Advertising was the classified ad to sell your truck or your cow,” Keith Reinhard, the industry veteran from the “Mad Men” era of the 1950s and 1960s, recalled of his childhood in rural Indiana in the 1940s.

Mass served the industry well, along with customers such as Procter & Gamble and Unilever, but is in short supply. More than 100m Americans watched the finale of Mash on CBS in 1983, compared with 10m for AMC’s Breaking Bad last year. Even hits are often streamed by the episode, without ads, on mobile devices.

Technology has once more broken the audience into smaller pieces. TV fragmentation is hard for advertisers but publishing is even trickier, with blogs and outlets such as BuzzFeed and The Huffington Post producing a flood of information and entertainment (the latter publishes 1,600 news items daily). Publishers complain that the rates they can charge advertisers are falling steadily, especially in mobile, but this is a problem equally for advertisers and agencies. If digital and mobile ads are not worth buying, despite the migration of the audience from traditional media, something is wrong.

This being the advertising industry, Cannes was awash with imaginative visions of how to fix it. The surprise, given the maturity of digital and mobile technology, is how vague these visions remain. They would require a revolution both in the product itself, and its placement. So far, technology has not helped advertisers. It has given viewers a tool to fight back and made them harder to find. But it need not be all troublesome; it could be used to pull the fragmented audience together again, perhaps in more precise ways than “adults aged 25 to 44”. One example is linking the “second screen” to the first by publishing tweets and Facebook ads at the same time as TV ads to bombard viewers who are watching TV while checking their phones or tablet. There would be no hiding place.

There are other, more sophisticated (and intrusive) tactics. A person using a phone to buy products and post on social networks is producing all sorts of data useful to an advertiser; who she is, where she is and what she likes. It could, for example, be used to transmit an ad if she passed a boutique. Such techniques are in their infancy, and advertisers do not know if they will work at scale, which is what they need. Nor do they know how consumers will react. TV viewers are used to ads; it is less clear what they will accept on a mobile device that they carry around and regard as personal.

Even if they can be found, and are receptive, there is another difficulty – traditional ads do not work on mobiles. Tiny banners, shrunk down from the desktop (where they are already less effective) are cheap to buy for a reason. They pass by rapidly, unliked and unclicked.

It is all anathema for the Mad Men of Cannes, used to painting a 30-second canvas for a captive audience. Their creations are being replaced by native ads – snappy headlines that look more like journalism than advertising. Instead of planned and crafted campaigns, they are instant responses to the Facebook zeitgeist.“The creatives will fight it to the last,” said one consultant. But the act that worked on TV is not pulling the same audience as before. Advertisers must find a new one and give it something it wants. To judge by Cannes, they are still dreaming.