So, consumers are annoyed with marketers interrupting their content with ad messages. No surprise. But what may come as a surprise is what would happen in a “World Without Advertising?”
Marketers are projected to spend some $200 billion on advertising in the U.S. alone this year and some $579 billion worldwide, up 3.9 percent from last year. Television is the biggest advertising medium in the U.S. and revenue is expected to grow from $71 billion to around $75 billion in 2016.
So, back to our initial premise, if all these ad dollars suddenly disappeared what would happen to all that free and relatively inexpensive media we consume and enjoy all year round?
Let’s take television. Looks like viewers will face 50 percent bigger bills and a big reduction in the number of channels. With the unbundling of cable, the era of the 500-channel universe is presumed to be doomed. But if ad revenue evaporates, networks will rely on viewers for income, either directly via streaming or indirectly through a pay-TV provider. Currently, the monthly spend for pay-TV is almost $100, up 39 percent. If we add the theoretical no-ad premium, the bill is $1,800 a year and a-la-carte cable that gives you access to maybe a dozen ad-free channels, including C-SPAN and C-SPAN2 is $1,200.
Okay, how about America’s favorite pastime—Facebook? Second quarter ad revenue for 2016 is $6.44 billion, up $2 billion from 2015. As of June 30, Facebook had some 1.49 billion active users so each user kicks in $2.69/quarter or $10.75 a year for an ad-free, user-supported experience. One problem here, most of their active users, more than 450 million, reside in the rest of the world, and that includes the developing world. It would be difficult, to say the least, to collect modest subscription fees from them.
And then there’s Buzzfeed, standing at number 26 of ComScore’s top 50 multiplatform media properties, with 76.7 million unique visitors. This year Buzzfeed is projected to take in some $250 million in advertising revenues. Despite their claims of legitimate journalism, it’s no secret that the majority of the Site’s page views originate from entertainment and lifestyle coverage. So, the $64,000 question, “Just how much would you be willing to pay in annual subscription fees?” The answer is probably a big, fat $0. So a World Without Advertising is a World Without Buzzfeed.
So, there you have it. Advertising supports and brings us a tremendous amount of content hourly, daily, and annually. And a lot of that advertising can be informative, entertaining, and, in some cases, memorable. So, the next time you see an ad, remember, it’s providing you with informative, entertaining, and memorable content.
(This article is an excerpt from “Ad Age,” Sept. 28, 2015 edition, adage.com/)
Posted on Fri, December 16, 2016
by Monty Wyne