IBM Study: The end of advertising as we know it

IBM released a really interesting study about the trends in the advertising and marketing fields and how the internet is going to change them. On a gut level we at Dreamgrow have predicted this change for some years now but it is nice to have such information supporting our views. This ties in nicely with the earlyer post Internet overtakes TV as the biggest advertising sector in the UK. From the study:

The next 5 years will hold more change for the advertising industry than the previous 50 did. Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked. Our research points to four evolving future scenarios – and the catalysts that will be driving them. Traditional advertising players – broadcasters, distributors and advertising agencies – may get squeezed unless they can successfully implement consumer, business model and business design innovation.

Based on an IBM global survey of more than 2,400 consumers and feedback from 80 advertising executives worldwide collected in conjunction with Bonn University’s Center for Evaluation and Methods, we see four change drivers shifting control within the industry:

Attention – Consumers are increasingly exercising control of how they view, interact with and filter advertising in a multichannel world, as they continue to shift their attention away from linear TV and adopt ad-skipping, ad-sharing and ad-rating tools.

Creativity – Thanks to technology, the rising popularity of user-generated and peerdelivered content, and new ad revenue-sharing models, amateurs and semi-professionals are now creating lower-cost advertising content that is arguably as appealing to consumers as versions created by agencies. Our survey suggests this trend will continue.

“Consumer-created advertising will have all the appeal of anything crafted by the agencies, and will be ‘coopted’ by the brands themselves.” – CEO, advertiser, Asia Pacific

Measurement – Advertisers are demanding more individual-specific and involvementbased measurements, putting pressure on the traditional mass-market model. Two-thirds of the advertising executives IBM polled expect 20 percent of advertising revenue to shift from impression-based to impact-based formats within three years.

Time horizon for shift from impression-based to impact-based advertising.

Advertising inventories – New entrants are making ad space that once was proprietary available through open, efficient exchanges. As a result, more than half of the ad executives interviewed expect that open platforms will, within the next five years, take 30 percent of the revenue currently flowing to proprietary incumbents such as broadcasters.

New platform players are offering advertisers the ability to purchase ads via aggregated networks. These capabilities provide key benefits such as: improved inventory management, improved pricing transparency, streamlined buying/selling processes, and improved analysis and reporting capabilities.

Four scenarios of the industry’s future

Get the full thing by IBM Institute for Business Value or a two page executive summary.

Priit Kallas

Priit is the founder and CEO of DreamGrow Digital, an internet marketing and social media company. With his 20+ years internet marketing experience he is Helping companies to understand and use the digital marketing to reach their target audiences. He has spoken at hundreds of seminars and conferences on different aspects of internet marketing. Priit is also the organizer of Digital Elite Camp, a leading traffic and conversion event.

6 Responses

  1. Priit Kallas says:

    Yes! The point is that information in this report is unbelievable for most even today and next year. But the message is slowly spreading.

  2. SKYNET says:

    Old news. Has no one noticed this report was published 2 years ago?

  3. Priit Kallas says:

    And some more from IBM “Navigating the media divide: Innovating and enabling new business models”

    This is way old but still has something to it (15 Feb 2007)

    A new media world has arrived. Pioneered by teens and gadget-savvy professionals, it has quickly spread into virtually every consumer segment, and started to encroach on traditional media. The number of unique visitors to has now surpassed the 50 million mark – something akin to the number of U.S. households that tune into the Super Bowl. Every day, consumers around the world watch about 100 million videos on YouTube – putting that number in context, the top 15 British primetime television shows combined attract about 100 million viewers, as do the top 4 U.S. shows.

  4. Priit Kallas says:

    Here’s another IBM piece “The end of television as we know it: A future industry perspective”

    * TV consumption is expected to rise, in part due to the appeal of new technologies which allow increased control over when, how and where content is viewed.

    * Networks will be extinct in fifteen years. – European Public Broadcaster

  1. October 2, 2009

    […] Leidsin eile huvitava uurimuse, mille on kokku pannud IBM Institute for Business Value. The end of advertising as we know it räägib sellest, et reklaamivaldkonnas on toimumas muutused, mis muudavad mänguvälja täiesti teistsuguseks. Üha rohke liigutakse mõõdetavuse poole, agentuuride roll loovlahenduste genereerimisel muutub, tarbija saab enda kätte üha jämedama otsa, muutub ka see, kuidas meediat ostetakse. Tegin sellest lühikese ülevaate. […]

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