News

Wharton's Jerry Wind Predicts the Future of Advertising < Back

    True or false: Click-through rates are an important measure of the effectiveness of online advertising. Research carried out by Wharton in association with the Advertising Research Foundation says false. Even with no clicks, online display advertisements can generate a substantial lift in site visitation, search queries and boost both online and offline sales.

    This was just one of the surprising findings presented by Jerry Wind, who shared some early results of the Future of Advertising project he is involved with in his role as Lauder Professor of Marketing at Wharton, University of Pennsylvania.

    The FOA project is trying to identify which new business models will best serve the emerging media landscape. "Advertising as we know it is in crisis and its mental model has to be challenged," Wind told a roomful of advertising executives who gathered at IESE to hear his presentation.

    It's true that there is a raft of new media for an advertiser to consider besides the traditional TV, print and radio outlets. What's more, CRM (customer relationship management) has moved to CMR (customer-managed relationships), where consumers increasingly control, converse, collaborate and co-create via two new screens (computers and mobiles), and the third screen (television) has gone interactive.

    As there is no agreed theory anymore as to what is the optimal strategy, Wind urges advertisers to experiment with a variety of approaches: Try different mixes of messages and media to see what works best and then measure their impact.

    The view of the agency itself is also up for grabs. What's clear is that whoever ends up positioning themselves as the orchestrator of this portfolio of networks will gain the upper hand.

    The FOA project is based on research conferences, interviews with industry experts via aGoogle channel and experiments being carried out by forward-thinking firms. Though research is still ongoing, early results reveal that the future is now, as some innovations, such as user-generated content and empowered consumers, are no longer for tomorrow but a reality today that advertisers have no choice but to embrace and assimilate into their mix.

    Unfortunately, many firms are not ready: they still work in silos and they fear losing control of the message. Wind gave the example of Ford, which took a big gamble when it gave new Fiestas to 100 socially connected 20-somethings and left them free to blog and tweet about their experiences as much as they liked for six months. Risky? You bet. But this is exactly the kind of "adaptive experimentation" involving "multiple touch points" and "synergistic storylines and creative execution" that Wind and others are hailing as de rigueur for a company's marketing strategy.

    The word "advertising" itself, he said, is an outmoded term to describe this new paradigm, but adequate terminology does not yet exist.

< Back