A Significant Shift

by Richard Edelman, President and CEO
  • Statements
19. April 2017
A Significant Shift by Richard Edelman

A number of major consumer-goods companies indicated recently they would be shifting away from traditional TV advertising. The reason: it no longer reaches or appeals to their target audiences; TV viewership is down 27 percent for 18 to 35-year-olds compared to those over 35; millennial preference of digital video (35 percent) is nearly twice that of traditional television (19 percent); and two out of three millennials use ad blockers.

Adidas* declared that it would "step away from TV advertising as it targets $4 billion growth," according to CNBC. The CEO of Adidas, Kasper Rorsted, said in an interview in mid-March that "It is clear that younger consumers engage with us predominantly over the mobile device. Digital engagement is key for us; you don't see any TV advertising anymore. All of our engagement with the consumer is through digital media...we aim to create a much more direct engagement with consumers.

"Bacardi* stated that the "rise of the millennial customer is leading the company to focus more on events, social media and influencers." CEO Mike Dolan, formerly CEO of Y&R Advertising, said in an interview with Forbes, "We are less and less focused on traditional marketing and advertising because the millennial consumer won't tolerate it. They don't watch 30-second ads. They don't believe anything that is related to advertising." Instead he is spending money on promotions, such as the No Commission, a digital art and music show, hosted by Swizz Beatz, a top DJ whose favorite drink is Bacardi. "It's authenticity that is critical. If you don't have that, these kids sniff it out in a heartbeat... We have reallocated budgets into events, social media, people talking to their friends about their experience."

Our Earned Brand study shows that traditional advertising will only bring consumers so far in terms of relationship strength, and that a mix of paid, peer and owned media is necessary to turn involved consumers into committed consumers. The study also shows that peer-to-peer conversation drives purchase decisions. As a result, brands are employing communications that are more social, digital and mobile in nature.

The opportunity for those of us in public relations is to make the case that we can cultivate influencers, drive e-commerce, build strong social communities and enduring relationships with stakeholders through compelling events and create movements. We must use paid to amplify events or strong earned/owned content. If the primary channel is to be mobile, our content has to be short-form, visually compelling and community generated. And we must not cede story-telling to the ad agencies. We have better news judgment and fast twitch muscles. This allows for rapid response to opportunities and issues that arise more frequently in this era of populism, where consumers regularly communicate with one other and brand and corporate reputation are linked tighter than ever.

*Edelman client