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November 13, 2007

The end of advertising as we know it

(Posted by francois to: advertising )

A new study by the IBM Institute for Business Value predicts that the next 5 years will hold more change for the advertising industry than the previous 50 did (here for executive summary, and here for full pdf report of the study).

Based on a survey of 2,400 consumers and feedback from 80 advertising execs, they see four change drivers that will shift control within the Industry:

Attention - consumers are increasingly in control of where they direct their attention. And not just by using Tivo-like products which enable them to skip ads and watch what they want when they want it, but because of a fundamental shift from TV usage to PC usage. 71% of the survey respondents use the Internet more than 2 hours a day, with only 48% spending equivalent time watching TV. 19% spend six hours or more on a PC with just 9% watching that much TV.

Creativity - consumers now have the tools to create their own user-generated and peer-delivered content. User generated content sites are already the top destinations for viewing online video, attracting 39% of the survey respondents.

Measurement - advertising executives predict that 20% of all advertising dollars will shift from impression-based models to impact-based models within 3 years.

Advertising inventories - ad space is increasingly available through open exchanges instead of proprietary channels that were controlled by broadcasters.

Based on these drivers, and considering that two of them have a high degree of uncertainty - the attention driver and the open inventory driver - the study envisions 4 possible scenarios for 2012:

Continued Evolution: One to many still dominates but thanks to DVR's, increased penetration of CGC and better measurement techniques, a greater portion of direct marketing dollars gets allocated to channels typically used for brand oriented advertising.

Open Exchange: Not much changes in this scenario other than most inventory gets bought through open exchanges.

Consumer Choice: In this scenario the user takes full control of the way ads get viewed and filtered.

Ad Marketplace: In this one the consumer choose preferred ad types as part of self-programming their media choices and are more involved with the creation and distribution of the ads.

Here is how the study predicts advertising spend allocation will evolve over the next 3 years:

ad%20spend%20IBM.png


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Posted by francois at November 13, 2007 7:40 AM | Bookmark This

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Comments

Very interesting! We can see in this predictions a lot of opportunities to develop advertising and communication.

L.T.

Posted by: Luca Taddei at November 13, 2007 1:02 PM

Based on that data the simple conclusion emerges: the more targeted the advertising, the faster the growth.

... not to mention more effective, interesting, lucrative, etc. etc.

Posted by: Tom Powell at November 21, 2007 11:16 AM

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