Mayank, my predictions are not about the end of marketing but a major abandonment of traditional advertising in sectors considered safe or safer. When a consumer goods company drives customers through Amazon it isn’t startling. But what Musk has done is violate all the rules about ‘considered’ purchases or high priced consumer items. His approach would be like buying a house without using a broker. It has never been done before and it may be the only way it’s done going forward. Think, if GM were to abandon advertising (not possible yet) they would double their annual profits. We used to believe the consumer had to be developed into a brand believer through advertising. No longer the case.
As to digital revenues, this is an indicator of the value of more efficient marketing. In fact, if you are an old school advertising careerist like myself (I was publisher of Forbes Magazine) you know digital isn’t really advertising at all, it’s customer metrics turned into algorithms. Because it relates so much better to ROI, which does not mean it’s actually more effective just more relatable, it will dominate and there is no turning back.
Advertising used to be about images that produced unconscious and conscious behaviors. We now make a straight line for the behaviors.
Alcohol and tobacco aren’t typical marketing segments. The first really markets through point of sale like bars and liquor stores, and isn’t a big budget factor in the way it was (the good old days of Absolut Vodka for instance). Now the battle is on for shelf space for an increasing number of artisanal brands, promoted by social media, events, and celebrities (at their parties, for which the brands pay). When you saw huge budgets in the past, they were often to satisfy the distributor networks, just as automotive advertising was done to keep dealers happy. Those are middle men now, the most vulnerable and their lack of clout is showing up in less advertising.
In B2B, advertising was always a reluctant expense. I started out in that area. Here it may be possible, since the media is quiet and less social media reliant, that traditional display ads take longer to decline (from a small base admittedly). It’s not a big advertising category however. Their real marketing muscle has moved into customer relations and forms of customer interaction that don’t look like advertising but take up the sizable proportion of their budgets.
None of this spells the end of marketing. Quite the opposite. I would say it is like medicine from the pre microscope era to after, when we discovered bacteria. It led scientists to look for germs, and hand washing became the single biggest factor in reducing mortality in hospitals over all the great thinking that had gone on before. With advertising, the future will see great strides in efficiency, and ad agencies will be at the forefront if they embrace it.