Food for Thought: The Perfect Digital Medium?

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As the old saying goes: “You can’t know where you’re going until you know where you’ve been”. This little slice of wisdom could not be more true for marketers, as we are on the verge of another advertising revolution. So, to start thinking about where we are going, let’s look at where we started.

In 1704, the first newspaper advertisement made its appearance in the Boston News Letter where it was seeking a buyer for the showcased estate on Oyster Bay, Long Island. Two centuries later, in 1941, we see the first television advertisement aired right before a Dodgers/Phillies showcasing Bulova Watches.

Since then, the television space has essentially become the standard for many companies to promote their product or brand to people, not only in one specific area, but as far as the other side of the globe. Sure, we have the web now and can line any given web page with banner ads if the user hasn’t installed an ad blocker. The story as we know it ends here, right?

Not necessarily. In 2007, one company made a change to their business that would revolutionize the entertainment industry to date. Netflix added a second prong to their business by implementing a streaming service in which users could consume an endless amount of media at a fixed rate. This saved them them the hassle of relying on the postal service.

The best part? No commercials, no word from their sponsors, and no contract to lock you into ridiculous monthly payments and packages – you could cancel at any time. Since then we have seen a tremendous migration to this form of entertainment whether it be via Netflix, Hulu, Amazon Prime, and the like. In fact, the new movement of “cord cutting” surfaced in response to outrageous cable prices and contracts in support of this new and more specifically cost effective option.

Last year, Nielsen released some numbers reflecting where consumer dollars are going for their entertainment. The survey found that streaming services had made their way into 36% of US households while 13% of US households have multiple subscriptions. This is a trend, it’s safe to say, that will continue as the younger (and even older, in some cases) generations become more technologically capable and the list of options expands.

In turn, this has had a detrimental effect on television’s ad revenue. Each year agencies dole out $65 billion on television advertisements that are reaching fewer and fewer consumers as time goes on. So where does all this money plan on going?

The most promising industry thus far appears to be music streaming services such as Spotify, Pandora, or Apple Music. With a free account you can listen to a set amount of music before you are subjected to a few advertisements.

However, going this route can be a gamble in itself. Advertisements are even now being used as a bargaining chip to persuade consumers to pay for a subscription. If you’ve ever listened to an ad for Spotify, they are weighing the benefits of paying for a premium subscription over using a free account. Sign up for a membership and you won’t have ads between songs or short commercials every 15 minutes. The medium you would be advertising on is running their own ads to remove yours from the consumer.

During the next few years there’s no doubt we will see some significant changes in the way marketers deliver their messages to the consumer. Projections by emarketer.com predict a continuous linear decline in ad spending for all mediums with the exception of digital. This begs the question, is there an ideal digital medium? With streaming services thriving on their adless appeal, it is clear some new technique is bound to surface soon.

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I'm an Ogilvy wannabe at The University of Akron studying Marketing Management and Integrated Marketing Communications. If I'm not at the parks, you can find me at your local library.

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