The Traditional Marketing Model is broken

"Letting go of the past and looking towards the future."  This last line from the "Nightmare on Madison Avenue" article essentially sums up the current state of the advertising industry.  Mainstream ad firms in New York are having a difficult time keeping up with the rapid change going on in the media world today.  Despite the fact that the article was written four years ago, many of the same challenges still exist for media buyers in the industry today as well as some new challenges.  One of these new challenges is the proliferation of the social networking site Facebook.

Facebook was founded in February 2004 about four months before this article was written.   The growth of the site has been substantial growing from approximately 2 million users at the end of 2004 to more than 80 million active users today.  The company is estimated to be worth around $15 billion and many consider this company to be the next Google.  However, the company only brought in around $150 million in revenues last year, which seems like a lot, but for being one of the most trafficked websites in the world, its quite paltry.  These numbers show that the opportunity to capitalize on the Facebook phenomenon is still out there.  Until Madison Avenue firms realize that the mode of advertising is changing and other mediums like Facebook are the new avenues for advertising, only then will main street ad firms enjoy the success they once had in reaching their target market.

To further support the need to shift, the "Madison Avenue" article states that internet ad spending grew 20% in 2003 to $7.2 billion.  Furthermore, according to ZenithOptimedia, Internet ad spending is expected to exceed radio ad spending in 2008 as well as magazine ad spending in 2010.  This shift will be the most significant shift the ad industry has had since the introduction of the television.  I'm sure there are firms that have figured out the new Internet advertising medium already, however the ones that haven't must learn to adapt or will be the victim of consolidation or a buyout within the industry.