A Third of Broadcast Ad Spend to Shift Online by 2012
The coming five years will bring more change to the advertising industry than the prior 50 have. That’s the finding of a new study of 2,400 consumers and 80 advertising industry executives, conducted by IBM. The study projects four major trends impacting the industry:
- Attention: Consumers are more in control of what they view and how they interact with and filter advertising, through online activities and tools like Tivo and other DVRs.
- Creativity: user-generated and peer-delivered content are growing rapidly, squeezing the traditional creative and agency roles.
- Measurement: advertisers are demanding more detailed analytics, not supported by traditional broadcast media.
- Advertising inventories: new advertising exchanges take ad space that was once proprietary and make it widely available through open, efficient exchanges.
More than half the advertising executives surveyed expect that open platforms will, within the next five years, take 30 percent of the revenue currently flowing to proprietary incumbents such as broadcasters.
The survey shows that consumer behavior is changing rapidly, particularly among younger audiences. Survey participants age 18-24 report spending significantly more time on daily personal internet usage than watching television. TV is increasingly becoming a background medium for users whose primary focus is elsewhere.
This new environment will bring significant change to the industry. Among the questions raised by the survey:
- What role, if any, will be played by traditional agencies in this model?
- Might consumers completely reject the “interruption marketing” model that has been the basis for radio and television ads?
- Will consumers embrace the idea of advertising as a trade off for content access?
- How much revenue will traditional programmers lose to the Internet, mobile devices and interactive home portals?
The complete study, The End of Advertising as We Know It, is available for free download at the IBM website.
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