Think 2012 is a tough year to do business in? It is going to get tougher. One indicator of this is the latest report from the American National Association of Advertisers, which predicts two-thirds of advertisers are to change – a gentle euphemism for ‘reduce’ – agency compensation. For advertising agencies, this trend is not a new one, and it is easy to blame recessionary pressures for exacerbating it further. But I believe a more fundamental shift is taking place: the death of The Middle.
What is The Middle? It was the accidental, bastard offspring of Gutenberg and his printing press. With more books created in the fifty years after its inception than in the previous one thousand, the thump, thump, thump of his invention reverberated around Europe: and with it came unexpected consequences. All technologies, the printing press included, have a silent, transformative effect upon every aspect of our culture. As Winston Churchill recognized: “We shape our buildings; thereafter they shape us.”
Privacy, the nation state, individualism, even the industrial revolution: these are all seen strong-jawed, buff descendants of Gutenberg’s printing press. And then there’s The Middle: runtish, half-ignored, but deeply influential. It is the Keyser Söze of consequences.
The Middle was born because print – and the mass consumption, analog world that it spawned – is a medium of detachment. Prior to print, cultural attachment came at two levels, like an hourglass (see Fig. 1) – people were either deeply immersed in a small number of ‘one to all’ cultural totems (e.g. religion, or the Colosseum) or in ‘one to few’ localized, niche cultures or utilities (like a local blacksmith). The cultural norm was either the awesome (in the original sense of the word) or the personal.
Print culture introduced a new strata, the ‘one to most’ (like the diamond shape in Fig. 2), where the power lay with the creator. Quickly, this became the cultural norm; in only a few hundred years, tens of thousands of years of ‘hourglass culture’ were displaced.
The Middle became a role that people played: the term ‘middleman’ was first coined in 1795; it defined the media we consumed: newspapers, TV, radio, these are all filled mostly with middle; and it created the largest market of consumer products, that $1.5trillion middle market in America.
But in the new culture, The Middle cannot survive. Digital despises and destroys The Middle, returning culture to the hourglass shape of oral and manuscript traditions. And people readily return a familiar dichotomy that we have evolved with for tens of thousands of years: utility or immersion.
The evidence for this is already all around us. Whilst people spend 27 minutes per visit on YouTube; they are most likely to leave a video after 15 seconds: they seek utility or immersion. Most webpages are left in less than 10 seconds, yet games can draw in people for 100 hours or more. Utility or immersion. This force is even affecting academia. In a 2008 study published in Science, James A. Evans found that citations on academic documents are decreasing: behavioral algorithms provide a utility that delivers the point of view you want to find, immediately. Serendipitous interruptions, along with The Middle, are edited out.
The same Utility-Immersion pattern can be seen in product purchases. Michael J. Silverstein identified this in ‘Treasure Hunt’: even in pre-recessionary times, the bottom end of the market was growing by 6% year on year as people sought more utility from their purchases; at the same time, the top end grew by double that, 12%, as they sought immersive, luxury experiences. And The Middle? That’s been shrinking by 6% year on year.
For the product creators that move quickly enough (and quickly enough is damned quickly indeed), this cultural change is problematic but surmountable. Those businesses that suffer from commoditization, as they race to follow consumers out of middle and into utility, can diversify product portfolios, launch line extensions, even change categories. Consider that a brand like Red Bull, which should be a commodity, has protected itself by building a culture of immersive content. Or the Guardian, whose print product became a commodity, so reinvented itself through digital and physical immersion. Of course, for every story of successful reinvention within this new paradigm, there will be a raft of failures: the brand world of 2020 will look very different to that of 2000.
For the advertising agencies, the picture is bleaker. They are the middlemen, using middle media, to help sell middle products to an invented middle people. Digital culture could not care for them less. Reinvention here is needed immediately: if two-thirds of clients are looking to change compensation this year, the remaining third will be soon to follow. And when the CEO of Unilever says that “advertising means nothing to him” and that he wants to become “a solutions provider” (spot the utility there), you know that the brand owners are already well progressed in understanding the cultural shift taking place.
The new model of agency is yet to be defined – to the extent that the phrase ‘new model agency’ has become an over-used cliché. But, to return to Churchill’s adage about our buildings, the agencies that survive and thrive will need to mirror the form of the new culture we live in. Agencies need to begin their own journey out of the middle, and to find a new role in providing companies and consumers with either utility or immersion.
This post originates from @tompuukko’s personal blog