Advertising Industry Faces Monumental Change
"The next 5 years will hold more change for the advertising industry than the previous 50 did."That, according to a new report from IBM (NYSE: IBM) Global Business Services.
In "The End of Advertising as We Know It," (all apologizes to Sergio Zyman who published a book in 2003 under that exact title), IBM surveyed more than 2,400 consumers and 80 advertising executives globally. The report shows, "increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked."
Report Highlights
- Broadcasters must change their mass audience mind-set to cater to niche consumer segments.
- Distributors need to deliver targeted, interactive advertising for a range of multimedia devices.
- Advertising agencies must experiment creatively, become brokers of consumer insights, and guide allocation of advertising dollars amid exploding choices.
- All players must adapt to a world where advertising inventory is increasingly bought and sold in open exchanges vs. traditional channels.
- U.S. users report more usage of social networking sites and user generated content than almost any other content services category:
- 45 percent use social networking sites
- 29 percent visit user generated content sites
- 24 percent use a music service such as iTunes
- 24 percent subscribe to premium television content
- In biggest DVR market, users report extensive replay of television programming. This is resulting in ad skipping and revenue shakeup unless producers and broadcasters reinvent marketing formats and messaging:
- 24 percent have a DVR in their home, and 48 percent have used video-on-demand from a cable company or other provider
- While 33 percent report watching more television content than before the DVR, 53 percent report watching at least fifty percent on replay
- Users feel extreme regarding new forms of advertising. Marketers have to work harder than ever to understand individuals and micro-segments:
- Nearly 50 percent reported that video spots online – during, pre-rolled or as sponsorships – were the least annoying form of advertisement. Other formats tested were banner ads, pop-ups, and contextual search ads
- However, nearly the same level of consumers responded the same forms of advertising were most annoying online
- Additionally, 11 percent said they’d be willing to pay a little for ad-free viewing of video online
Check out the full report from IBM.
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