Digital Technology Presents New Challenges for Advertising

For agencies and their service providers, competence in digital media is becoming an integral part of the effort to win and maintain customers.

This summarizes the unanimous finding of an expert round table discussion that was led by Andreas Weber of Columnum Büro Mainz in conjunction with the Gesamtverband Werbeagenturen e.V. GWA and Heidelberger Druckmaschinen AG (Heidelberg) and which considered the question: "How will advertising be influenced in the future?"

Facilitator Andreas Weber summarized: "Although traditional advertising will still feature in the future, new interactive forms of advertising will become an integral part of the communications mix. Traditional media such as printing will still be in demand provided that processes are accelerated and media integration is properly managed."

The creative sector is not afraid of facing the challenges of the Internet age. According to Thomas Kanofsky, Creative Director at Saatchi & Saatchi, traditional advertisers will in future have to understand as much about multimedia and on-line advertising as the pixel parks of this world. As representative of both a media technology developer and a global advertiser, Holger Reichardt, Marketing Director at Heidelberg commented: "Over 75 percent of money spent on advertising by dot.com companies is accounted for by traditional media. The Internet age has brought with it many new orders for the printing industry."

The efforts needed to drive advertising forward in the era of digital technology are enormous. According to Reichardt, it is not only important to consider marketing aspects here, but also the need to avoid sales channel conflicts in e-commerce by ensuring professional channel management. "At the same time, we must learn to synchronize and unify online advertising with traditional media more effectively", he explains.

In addition, Frank Beinhold, Production Manager at Serviceplan and spokesman of the GWA's Print Production Management Group, perceives a growing interest in print media production from the online experts at the agency. He believes there is no question that print, TV and interactive media will grow side by side in future.

Andreas Peter, General Manager of the media production service provider Datascan, emphasizes the strong growth in demand for cross-media use of data. As Peter explains: "We are fully committed to cross-media publishing and are establishing a totally new infrastructure for advertising production". His company, Datascan, and its partner Druckhaus Darmstadt are involved in a dedicated joint pilot project with Deutsche Telekom called "Printnet". Peter is convinced that on-line networking will revolutionize advertising media production. According to the experts participating in the round-table discussion, cross-media and interactive advertising strategies are having an effect that is generating profound changes in the culture and established structures within companies. The decision to move towards online advertising must therefore be optimally prepared in strategic terms. Agencies must guard themselves against underestimating the work involved, which usually requires consultants with extensive experience in channel and change management.

When asked about future demands on agencies and service providers, Anette Scholz, head of the interactive agency Scholz&Volkmer Intermediales Design is quite confident: In five years' time, we shall be doing exactly the same as we are today: acting as communicators for our customers. The channel that we use may well be a totally new one, or a symbiosis of those that we know today. The main thing is that we need to ensure we are better equipped to react more quickly and more efficiently".

Photo: Discussing the future of advertising (from left to right): Holger Reichardt, Marketing Director, Heidelberger Druckmaschinen AG; GWA spokesman Frank Beinhold, Agentur Serviceplan; Thomas Kanofski, Creative Director Saatchi & Saatchi; Anette Scholz, Managing Director Scholz & Volkmer Intermediales Design, Andreas Peter, General Manager, datascan, Darmstadt.

For further information:
Hilde Weisser
Heidelberger Druckmaschinen AG
Tel.: +49 (0)6221 92 50 66
E-mail: hilde.weisser@heidelberg.com

Key hypothesis: Technology is producing huge changes in advertising

The expert discussion was preceded by a survey to which 56 of the approximately 130 GWA agencies approached responded.

Main findings:

• Technology has had a huge penetrative effect on everyday communications and is changing the fundamental structures of agencies
• The organizational processes within agencies are still lagging behind. Although media integration is promulgated, it is not a reality. Almost two-thirds of the agencies still separate their areas of activity into media categories.
• Over 80 percent of those responding agreed with the statement "Brand leadership is becoming a question of digital competence among companies and agencies to develop a consistent communications umbrella".

Source: Columnum-Büro Mainz

Survey results in detail

Agencies must face up to the challenges of media technologies

1. Will print and broadcast media have different functions to online/digital media in future? Yes 77.5 percent No 22.5 percent
2. Within your agency, do you distinguish between different media categories (e.g. print or TV advertising from online advertising - and these from direct marketing)? Yes 60.7 percent No 29.3 percent
3. Have new digital technologies led to new workflows within the agency over the last 4 years? Yes 90.9 percent No 09.1 percent
4. Does your agency employ technology specialists who configure net-works and systems and who advise internally on new opportunities? Yes 74.9 percent No 25.1 percent
5. Have you recently experienced customers wanting to take over/develop parts of media production themselves? Yes 78.9 percent No 21.1 percent

Source: Columnum-Büro Mainz Status: October 2000