Digital Media Buzz > Private-Label Media: A New Kind of Marketing

Private-Label Media: A New Kind of Marketing

By Channon Cary

Are marketing and advertising agencies, as they are known today, soon to be extinct? This month, TNS Media Intelligence, leading provider of strategic advertising and marketing information, reported first quarter industry advertising spending dropped a sharp 14.2 percent, a steady decline following a Q4 2008 decrease of 9.2 percent. Many believe this is a signal that the advertising and marketing world is changing — this was even a key message and warning from Al Gore at Digitas’ Digital Content NewFront event this month in New York.

Certainly, it’s argued that the economic downturn is causing some of the financial decline being seen in the industry, but more than that, speculation exists around whether traditional marketing and media agencies will be needed in this new era of consumer-driven and highly interactive social media.

Booz & Co, leading global consulting firm, has suggested a new potential face of marketing — more transition to “private-label” media. They cite the impressive success of the Lego group, and others, in diversifying their internal media strategies, and setting themselves apart as leading digital brands.

What is the appeal of private-label media strategies? Or, in other words, why would companies begin to shift their marketing and advertising functions more and more in-house?

The answer may lie in technology. Forrester Research, Inc., shows significant company adoption and integration of more interactive marketing strategies across all areas of the media spectrum. Additionally, as companies become more skilled in connecting with their customer directly via tools like Facebook, MySpace, Twitter, blogs, visible customer reviews and ratings, even user-generated product videos and advertising, they are gaining an entirely new insight and expertise into their customers.

The answer could also lie in the continued struggles of agencies and clients both to integrate traditional and digital media into their marketing and advertising strategies. The Association of National Advertisers, in a recent study of close to 300 marketers, found this to be a top, continued challenge.

Uncertainty in how to handle information, combined with the new influx of information and customer integration tools does have the potential to place more power in the hands of the company. This would allow more opportunity to leverage customer feedback into specific strategy – not only in terms of product or service innovation, but also potentially in terms of marketing and advertising functions.

However, despite some compelling changes in the marketing industry overall, an opposite case could be constructed against private-label marketing evolution. For one, advertisers are showing optimism for an industry turnaround, even if this enthusiasm may not be mirrored by their clients.

Additionally, while some companies may be getting a wealth of new customer information, they may not be ready or able to truly capitalize on that data, translating it into creative, diversified, yet integrated, marketing strategies. In fact, since the widespread popularity of Timothy Ferriss’ book, The 4-hour Workweek, and its championing of outsourced virtual assistants, many businesses already outsource social media work like responding to blog comments, e-mail, twitters, etc., potentially suggesting that companies may not be as close to the social media customer connection after all.

Advertising and marketing agencies have been evaluating restructuring to better align to the changing needs of clients and the marketplace – becoming integrated experts in what is still an evolving field. Shiv Singh, VP of Social Media for top media agency Razorfish, presented ideas this spring for reorganizing marketing groups to better align and meet the needs of a new, social influence-driven market. This presentation complemented other industry voices, suggesting changes in traditional agencies.

Regardless of each perspective in the future of marketing, the question still remains – in the midst of the many changes occurring today across all media channels, in almost every market and with the maturity of digital media sources, will traditional marketing and advertising change and evolve, or will existing models continue to prevail?