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Hyper-local rising – Published by

By January 29, 2018 No Comments
hl rising

Historically, tech developments have tended to destroy local revenue sources, writes Roy Jeans – but now tech will help drive its revitalised growth

It currently seems that from a brand’s perspective whatever the media question, the answer is invariably Facebook and/or Google. The new generation of twenty-something planners and buyers has understandably grown up steeped in the solutions that the Big Tech companies offer. They consume their output on an hourly basis; are comfortable with them; and instinctively and immediately absorb any product developments.

Add in behavioural changes where the consumer is often reacting more quickly to events than the advertisers trying to sell to them, and we now have a generational schism between senior marketers and the consumer, as well as a technological one.

Historically, clients used advertising to shape and strengthen brand presence through what is now quaintly called MSM. The consumer was then expected to follow the advertiser’s lead, and to purchase the good or service. The current flood of monies into Facebook and Google has quickly upended this approach, with mixed results at best.

Factor in the increasing – and valid – concerns across a whole range of Big Tech issues, and it is no surprise why many major advertisers are publicly reconsidering their strategies. In the last year alone we have had the following: the ongoing debate about both fake news and “post-truth” news; extensive public discussion about how to combat Big Tech’s systemic tax avoidance; the consistent over-stating of audiences (strange how they are never under-reported); the continued posting of hundreds of videos concerning such diverse subjects as the promotion of ISIS, anorexia, serious addiction and suicide; the general loss of our privacy – without our permission; selling advertising to agents of foreign governments – with Russia the most visible; and alleged election interference on both sides of the Atlantic. Apple is currently being sued in New York for allegedly deliberately slowing down its older models to encourage the purchase of its upgraded products.

These ongoing issues have jumped from being merely the concerns of our relatively narrow media world of planning and buying, and are now firmly in the editorial columns of our national newspapers, as well as the corridors of government – hence, for example, the imminent arrival of GDPR.

The result is that this debate about the role and responsibility of Big Tech is now strongly in the public consciousness, and is gathering pace every day. Last week our own government raised the (almost certainly unworkable) possibility of using taxation to punish tech companies that consistently fail to control their content. There is also a growing call to simply tax the turnover of Big Tech, rather than their geographically re-routed, and frankly opaque, profitability.

In tandem with Big Tech’s revenue growth – and clearly driven by it – the media agencies are restructuring, and consolidating, as they try to solve the problem of this dominance. If you add in Amazon, who have reported yet another year of stunning ad revenue growth, there are now three globally dominant tech companies who are patently threatening the status quo.

From the advertiser perspective the fundamental question is a simple one – “If the answer is always Facebook, Google, and now Amazon, what value do the current banks of media planners and buyers add every day?” The rise of this troika, allied to the rapid automation of the planning/buying process, not only hollows out existing agency structures, but threatens to potentially disintermediate entire agencies.

There is also an understandable drive from clients to deal directly with Big Tech – despite all the concerns above. After all, in the balance of resources, Big Tech has more money, more profit, and ultimately more usable data than the global marketing services businesses currently acting as their intermediaries.

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