Skeptics who forecast the demise of advertising ignore the fact that business and other enterprises have an innate need to communicate with their publics. Hence, the real question is not will advertising continue to be an important tool of business communication (the answer to that question is yes!) but simply,

What Forms Will Advertising Take in the Future?

Granted, there are a host of sub-issues such as the relative importance of the various types of advertising over time, who will pay for what, what controls might be appropriate in light of the changed media alternatives open to advertisers, and so on. It is inevitable that certain advertising media decline over time (e.g., network television) and others flourish (e.g., data base marketing communication). Such ebb and flow in terms of the media available to advertisers is predictable and healthy just as the evolution of a species is in the natural world. As the means or media through which advertising messages are conveyed evolve, it is important to stress that the fundamentals of effective communication simply need to be adapted and expanded to fit these new forms. For example, the fundamental principles of effective persuasion articulated by Aristotle 2,350 years ago can be applied just as directly to selling high tech gadgetry via interactive advertising on the Internet as they can to a public debate in ancient Athens. The principles first codified using Starch readership scores in 1923 regarding effective layout and design have relevance to developing an effective home page on the world wide web. Rather than dreary, the future of advertising is bright and unlimited. As unlimited as the imaginations of the marketing communication professionals who are constantly seeking more effective and efficient means to promote the brands and companies they represent. Advances in computer and communication technologies are opening up an unprecedented opportunities for advertising people. Now is a time of great excitement and opportunity for the advertising industry.

Law and Regulation

Regulation of Deceptive or Unfair Advertising

In the past 30 years we have seen the Federal Trade Commission (FTC)criticized for being too lax in the 1960s, too aggressive in the 1970s, and again too lax in the 1980s. To some extent, the Commission has experienced these cycles throughout its 80-year history. But times have changed. Fundamental changes occurred in the 1980s, including state involvement in national advertising regulation, downsizing of the FTC, and the introduction of Chicago School economists into the FTC. These factors seem to have had some stabilizing influence on the agency's cyclic swings. Regulation by state Attorney's General has effectively limited the extent to which the FTC can de-regulate advertising. States have shown a willingness to assume the Commission's role in regulation, when the agency appears too permissive. This has also served to put political pressure on the FTC to be more active as a consumer protection body. At the same time the reduced size of the FTC staff, along with the newly-emphasized consideration of Chicago School economics, has placed effective limits on the agency's ability to become overly paternalistic. Both of those forces seek to minimize unnecessary restraints on advertising. In addition, the recent codification of a definition of "unfairness" into the agency's enabling act has both re-established a power that the FTC effectively lost 15 years ago, and at the same time placed a definitive limit on that power that had not existed in the past. The net effect is that all these new forces should act as counterweights, diminishing the radical swings in regulatory vigor that characterized the Commission in years past. However, new technologies and the ever-expanding number of media vehicles threaten to alter this balance. They represent more potential work for the Commission, combined with added complexities of monitoring, investigating, and proving illegalities in this high-technology environment. As regulation becomes more demanding and problematic, the amount of time and expense dedicated to many case will, naturally, increase. Given the agency's finite resources, and the current reluctance of Congress to expand those resources, this presents a fair probability that the FTC may again find itself criticized for offering inadequate consumer protection.

Other Legal Implications

Constitutional protection for advertising reached its zenith in 1976, when the Supreme Court declared "commercial speech" to be within the protections of the First Amendment. But during the past 15 years the Court's commitment to that principle has wavered. In some opinions the Court seemed to retreat from that 1976 decision, while in others it appeared to fully embrace that decision. The only certainty to emerge from these cases was that commercial speech is less protected than most other forms of speech. This vacillation largely results from a failure of the Court to adequately define commercial speech or to explain why it holds second-class status. But the Court, like the public at large, is suspicious of advertising's effects on our society. And the profit motive is inherently suspect. New media, and the accompanying new advertising techniques, are rife with potential for widespread distrust and acrimony. Their effects are unknown, and we tend to fear the unknown. This undoubtedly will lead to numerous cries for regulation. As we continue to de-massify (or interpersonalize) advertising, a primary concern will be infringement on consumer privacy, in terms of both the information collected via interactive technologies and the ever-more-intrusive nature of advertising. Among other issues, privacy concerns can be expected to foster regulatory proposals targeted at those new technologies. In other words, new opportunities for advertising are not cost-free. As public animosity and fears increase, a concomitant growth of regulatory proposals is inevitable. The courts, having similar concerns about advertising effects and advertiser motives, can be expected to give many of these proposals serious consideration. This regulatory attention, however, should focus primarily on new media because, by comparison, more traditional mass advertising methods are far less of an "unknown," and are well entrenched in our social system.

Economic Issues

The function of the economic system is to supply products and services for the use and enjoyment of the consumer. A substantial portion of our economic system is devoted to the fulfillment of wants and desires which go well beyond the basic necessities of life. Advertising is an integral part of this activity and one of the most visible elements of the mass distribution system.

One of the primary roles of advertising is to provide information about products or services to potential buyers. The classified sections in newspapers represent advertising in this most basic form. This type of advertising effectively improves the operation of marketplace and can therefore be regarded as playing a useful role in the economy and to society.

Annual advertising expenditures total over 132 billion dollars. It is important to recognize, however, that most of this money does not go to the advertising industry. The majority of these funds are used to subsidize the communication's media, an industry which has become dependent upon these essential advertising revenues. For example, this is virtually the only source of income that commercial radio and television stations have, and it constitutes about two-thirds of the income for newspaper and magazine publishers. Without this financial support, the media communications industry would cease to operate in the manner in which it exists today. As companies attempt to reach their consumers more effectively, database marketing, home shopping channels, infomercials, and electronic couponing are emerging as the most cost effective way to deliver their message. These new channels of information distribution offer variety, convenience, flexibility, and customization. While traditional print and broadcast are becoming more customized too, they have not moved at the pace of these new technologies. The fastest growing new information channel today is the Internet. Unlike interactive cable television which seems to be getting more expensive and complicated all the time, the Internet offers two-way, graphical, worldwide communication with technology-oriented early adopters. These users are well-educated, upscale individuals who have chosen to access information from a worldwide web.

This is the first medium to deliver an almost instant global audience. It is the new form of mass communication and provides users with a new economy of information distribution and acquisition. Advertising on he Internet has become the most significant new development within the industry. Much of the interest is being fueled by small entrepreneurial companies who are able to take advantage of change much faster than the larger corporate competition. As this new information delivery system grows and is able to effectively and efficiently deliver information to a mass market, advertising will be a part of the future for two reasons. First, the fact is that for products and services directed to mass markets, advertising is the most cost effective means of promotion. Second, the financial subsidy that advertising will provide this new mass medium will be as important as it was for the traditional media that operate today. Advertising will provide the primary source of income for the future expansion of the Internet. Advertising will continue to be an economic fact of life in amass distribution economy because it has consistently worked better and cost less over the long run than other alternatives.

Cross-Cultural Issues and International Advertising

Five forces are re-shaping the American consumer market into one that is both more global and multicultural. Differential immigration and birth rates, as well as better census-taking, point to an increasingly diverse US population. Combined with new acculturation patterns and more disposable income, these demographic trends create truly multicultural markets at home.

At the same time, competition for the US consumer is no longer limited to domestic or large enterprises. The virtual firm as well as foreign-headquarted multinationals design marketing programs which will differentiate them from competitors, but which will attract global consumers. We now have a greater variety of organizations using "niche marketing" techniques that strengthen the loyalty of targeted consumers. Consumers make purchase decisions based on whatever company, service, or product attributes they perceive to be important. In response, we must broaden the tools with which we "market" and "communicate".

That leads to new production and marketing technologies, the third force of change. Robotics in the factory, standardization of service quality, new and interactive media, and direct marketing or selling, make it more cost-effective to target multiple segments with different marketing and communication programs. The ability to customize communication media and messages for ever smaller groups of consumers is the essence of "niche marketing". To do this effectively demands we learn more about how communication styles and responses to marketing techniques differ across subcultures in the United States. Creative media choices are a new priority for reaching consumers. The fourth and fifth forces of change are interrelated: consumer identity and the cultural impact of marketing and media. Situational ethnicity (which includes but is not limited to ethnic origin), is a growing influence over the attitudes, media habits, and marketplace behaviors of post-modern consumers living in fragmented societies. Diversity has become our social norm, and consumers align their own identities with those of socially-constructed groups. Institutions such as the family or church compete with media images and ethnic marketing activities to indicate appropriate attitudes and behaviors of different groups. Media stereotyping thus damages our appreciation of the within-group diversity of groups we cannot personally observe. Different age or lifestyle groups, as well as racial and ethnic ones, express some of their distinctiveness in 'how' and 'why' they make choices in the marketplace. We recognize the growing significance of marketing activities as socializing institutions in post-modern societies all over the globe.

The increasing globalization of business activities places particular demands on communication businesses to evolve into either 'specialists' or 'generalists', on a number of dimensions: scope of service (Advertising or Integrated Marketing Communications); functional services (boutiquing or full service); market coverage (segment specialist or multiple target markets); extent of area served (regional or international); media expertise (one-way or interactive), creative competence (adaptation or creation).

We must prepare our students, the communication professionals of the future, with the skills for effective cross-cultural communication. Key elements of success in international marketing and advertising are being able to recognize cultural differences and to adapt to different environments. While cultural sensitivity is a cornerstone of marketing and advertising in a multicultural environment; fundamental principles of communication continue to serve as its foundation.

It no longer matters whether we expect to "go into" international advertising; we will either become specialists in reaching a group of consumers who we already know and understand; or, we must learn how to communicate with people of other cultures and sub-cultures. The skills required are: Personal experience with cultural differences; identification of the perceptual filters our own culture creates; and, understanding the link between culture and communication style, behavior, and perceptions. We suggest all communication professionals build multicultural experience through language study; foreign study, travel or residence; or, work in a multicultural setting. Last but not least, we must all be students of the multiple currents in our own culture and the carriers of that culture.

Advertising Creativity and Its Reinvention

Evolution Becomes Revolution

The revolution in advertising communication -- in essence fueled each time evolved technology touches the consumer at a personal level -- will mean the marrying of old and new artistic, cultural, and communicative forms. The advertising industry and its constituencies must be ready for continual creative reinvention of the craft. That reinvention -- in great part managed by the computer and its cultural milieu -- will be found in the design, language, and context of the advertising message.

The Computer as Revolutionary Tool

The computer is now the tool/medium of choice for artists, designers, and -- of particular interest to the advertising industry -- art directors. Because of this ongoing technological revolution, the computer is used in conceptualizing, developing, and producing materials for both the print and electronic mass communication media. With its ever-increasing capabilities, the computer changes forever the visual communication industry.

Consider the new systems employed by creative professionals. Writers craft and edit instantaneously. Yet it is the visual side of the industry that has experienced the most dramatic change. Art directors generate their own type and final high-resolution graphics, saving the time and expense of typesetters and photo houses. Finished "comps" are produced quickly and in final form using a variety of designs and colors for clients' review and approval. In-house agencies generate sophisticated business graphics including advertising, presentation slides, reports, transparencies, animated videos, newsletters, and a variety of other useful and cost efficient materials. Slides, color comps, and animatics have almost completely replaced traditional methods of presentation. Creative teams use computer produced "comps" to show clients more quickly resolved roughs and comprehensives.

At this level of higher functioning, computers actually become part of the creative process. The storage capacity of the machine allows the creative professional to make many changes in work, saving each change in color, scale, or texture separately, thereby offering a more relaxed and multi-perspectived approach to decision making. This new shift reinvents years of traditional advertising design constructs. Television ads move at the speed of light. Stories are told in a heart beat. Messages are delivered with a new language of iconography and visual deconstruction. Conceptually, messages must be even more applicable to the consumer rather than to the product. Audiences must learn new ways of reading, new ways of interpreting social icons and imagery to adapt to the new advertising. The long held rules of advertising design which include specific layouts and word counts for print advertising are relics. In this new era, images and type are layered, precariously balanced and sized, ghosted, running hither and yon around the page and generally deconstructed, sometimes beyond recognition but with full intent as to how the reinvented image reads. Type becomes image and image type. Product shots and logos and taglines dance around the page and the screen, no longer comfortable with predictable placement and scale. Increasingly, images operate purposefully in dissonant patterns. Typical, comfortable visual balance is more often than not absent. In essence, tradition is broken; a precedent is set for far-reaching innovation at every turn, forcing great leaps in perspectives rather than the gentler evolutionary changes of the past. The future focuses on this constant reinvention.

That is not to say there is no room for conventional design or any of its well-studied conditions. It is only to say that -- and this is the heart of the craft's new form -- one can no longer learn or teach formulaic solutions to advertising design. Truly creative solutions -- innovation requiring contextual bravery and an ability to wed medium to medium -- require art directors and creative professorial know traditional design principles, new technology, and rapidly evolving culturally-based images around them. Their task is to meld the old and the new in strategic and innovative ways, a job requiring them to reach further for creative visual solutions than their earlier counterparts.

The most important role new and interactive media messages play in the life of the art director and writer is not so much the creation of forms, as it is the change in philosophical perspective. Creativity in a static environment might be challenging in its quest for new solutions to common problems, but real excitement and creative momentum come from creating in a constantly changing, constantly challenged environment. Creating advertising for the Internet, for new CD technologies, for new broadcast and narrowcast venues is rich with possibility. Theories of physical properties state that movement begets movement. And so it is with ideas: those created in the midst of innovation and change present unlimited opportunity for still greater invention, the creators searching for the limit and the newest idea. In the future, advertising will embody an ever-present quest for this edge.

Reconceptualizing Consumer Research

If advertising is to remain dynamic, innovative and effective as we approach the next century, we must reexamine four areas which we now take for granted about advertising and consumer research.

First, we must reexamine definitions and terminology used to ground the way we conceptualize and approach consumer research. Distinctions among traditional definitions of advertising and promotions, public relations, and other forms of marketing communications are superficial to consumers. There is blurring of traditional conceptualizations of how consumers view products with an increasing tendency concerned with the performance aspect of goods in lieu of their functional role. In tandem with this, the notion of "information" as hard facts about product attributes needs to be reconsidered to account for information delivered via visual or emotional appeals or sound and movement. And, as we continue to enter an age of "interactivity," the active (versus passive) role of the consumer in the communications process needs to be acknowledged.

Second, we must reexamine our models of marketing communication and how advertising works. The notion of two-way communication undertaken via interactive technology has serious implications for models of how communication is processed. What we think we know about "how advertising works" is based on information-processing models and models of heuristic processing, all of which have been tested exclusively in "one-way" communication situations. Consumer researchers have no insight into how these models might work or whether they are appropriate in situations of two-way communication typical with interactive media.

A third issue we must reexamine is how we conceptualize the consumer or rather, perhaps, how the consumer conceptualizes himself or herself. We must be more sensitive to the range of ways people simultaneously define themselves (or socially construct their reality) and the roles that advertising and consumer goods play in this process. Advertising must respond to peoples' similarities as well as their differences. Issues especially relevant to global advertising, like whether advertising should be customized versus standardized, mandate that consumer research continue to focus on both individually- motivated as well as group- or socially-motivated behaviors. Consumer research should also be sensitive to the "dark side" of consumer behavior, focusing on concerns of consumers living in poverty, suffering from poor health,. addicted to drugs, or residing in the streets.

Finally, we must reexamine how we come to know the consumer -- that is, how we do advertising and consumer research. We must continue to build upon a trend seen recently in consumer research of seeking ideas from other disciplines as well as seeking to use other methods of discovery. As we adopt a more consumer-oriented perspective, we need to adopt research methods which allow consumers to speak in their own words. Since these methods are likely to be more costly and more time consuming than many traditional methods of research, those of us in advertising must carefully weigh what it is we need to better understand about consumer behavior against such costs. To respond to the changes which face advertising, we must question the underlying principles guiding what we do if we wish to better understand how the consumer and advertising interact. Are common definitions used in the past still applicable? Are our assumptions about how advertising works still valid? Do we communicate with consumers in terms they understand? Can we refine the sensitivity of our research methods to better understand the consumer? The consumer is the key to how technological change will influence the future. For advertising to continue as a dynamic communication force, we must listen to consumers and respond to their needs and wants in conveying messages.

Media and the Changing Nature of Advertising

The recent changes in technology mandate examination of our definition of "media", as well as two important, related issues; the methods of audience measurement for new media and the dynamics of how consumers interface with the new media and with new permutations of traditional media.

Defining "Media"

The term "media" refers to the entire set of channels through which it is possible to deliver message to part or all of the public. Traditionally there were two types of channels; a "mass medium" type capable of distributing the same message to many people simultaneously[e.g. radio], and a "carrier" type capable of transmitting one message to one person at a time [e.g. telephone]. The critical difference between carriers and media has been the level of interaction permitted by each channel. Carriers permit fully interactive, real-time dialogue while mass media typically have permitted less [or zero] interaction between message senders and recipients. Today, most new media have blended these channel characteristics and are able to reach many people almost simultaneously and provide a high level of interaction [e.g. personalized grocery store checkout coupons, the internet and personal in-flight video screens] but the essence of the definition is the same.

Audience Measurement Issues in New Media

Clearly, the issues of audience definition and measurement and who will provide them are of fundamental importance in shaping the nature of media planning in advertising agencies of the near-term future. An example of just one such new medium may point out the problems involved. A new company called ProductView Interactive (AD AGE, April 17, 1995) has been formed to provide the new medium of "electronic mail" to consumers. For those who do not have access to the internet through government-related agencies, email is not universally available free of cost or at minimal cost like the "old mail." One must pay a monthly fee to Prodigy or similar on-line service, as well as a per-minute fee in many cases, to get access to email privileges. ProductView plans to provide email to anyone who subscribes for free to the subscriber. This service will be subsidized entirely by advertisers, as is almost the case in old media of newspapers, magazines and the like. Each piece of email going through the system will be tagged with an advertiser's "stamp" or logo. Additionally, buttons will appear on the screen for access to ads and additional information about the product whose stamp appears. A different stamp will appear on each piece of email opened by the consumer. But advertisers are already complaining about some of the cost structure (especially for business referrals). Clearly, advertisers must have evidence of the rational relationship of cost structure of the medium to the potential audience of this medium.

How will "potential audience" be defined for this email medium? How will audience be measured? Who will do the measuring? Will this measuring company be audited? By whom? These questions need addressing now in order for the medium to survive if the thesis regarding the importance of "audience measurement" stated above is correct. Once the audience is defined and measured for this new medium, how will this information be used by media planners in advertising agencies? Reach and frequency have evolved since the 1950's, largely at the behest of media people in advertising agencies, into fundamental concepts which form the basis of most media planning schemes in use today (Leckenby and Kim 1994). It is clear advertisers will continue to want to know how much money to put into a new medium such as email. New media, as old media, will be evaluated based on "buys." Once the "rating" or average audience of email through ProductView is measured, this rating can be used in traditional reach/ frequency models to estimate the reach/frequency of any number of buys in that medium. If, for example, the definition and measurement for this medium are such that one could know the average number of people who "click" open at least one email message in a week for a given amount of "placements" of one advertisers' stamp on email going through ProductView's system, then the cost can be set rationally for this unit of measurement and placement as the basis for a unit of "buy." Further, this unit and resulting measurement can then serve as the basis for projection to any number of "buys" in this medium for the purpose of estimating the reach/frequency of that number of units of "buy." This would serve as the basis, as in all media, for the calculation of cost per thousand people reached one or three times, cost per rating point, gross rating points, reach, average frequency and the truncated frequency distribution of exposure. Notice that advertisers, at least in this medium, would still be faced with the enduring issue of estimating exposure to the medium as opposed to exposure to the advertising message. Apparently new media are not immune to problems of effective reach/frequency.

Changes in Audience Interface

Increased computing power has permitted the media to alter its very nature. With the advent and accelerated dispersion of technology through society, media has become less of a mass institution, evolving into a highly customized industry able to supply windows into very narrow areas of consumer interest. Small and large media firms alike can provide selective content to small audiences with reasonable efficiency. This ability has led to a fundamental change in the amount of effort consumers must expend in the search and acquisition of media content and personally relevant information. In the new media environment consumer must expend a great deal of effort to access very selective [and therefore interesting] media and vehicles, just as the level of effort they must expend to protect themselves from unwanted or intrusive media and vehicle has increased. Conversely and seemingly contradictorily, consumers are also able to access a wider variety of entertainment and information with even less effort [500channel CATV]. Examining how different media "score" on important dimensions such as 'effortfulness' and 'degree of interactivity' may provide a useful guide for understanding the more complicated interface between media and consumers which advertisers must now take into consideration.

The "new media" represent, then, the future for many professionals engaged in the industries involved in advertising, including publishers, programmers and clients, not merely for agency personnel. The "new media" also have implications for agency personnel. The future role of media planners will focus increasingly on identifying new media alternatives and examining the efficiencies inherent in each. This increases the need for emphasis on analytical skills and accountability. Students need to be involved in developing new ideas about definitions, concepts, measurements and implementations in advertising media. Media planning, once a clerical position, has become an executive position. The function of which increasingly revolves around identifying new media alternatives and examining the efficiencies of each by applying existing media concepts. Consequently educators are required to place additional emphasis on teaching analytical tools and personal accountability. From this analysis it is clear that the "new media" represent vast opportunities for advertising, as well as the need for continued advertising education.

DEPARTMENT OF ADVERTISING, THE UNIVERSITY OF TEXAS AT AUSTIN