Ad-supported television faces an existential threat as more consumers avoid commercials by subscribing to streaming video services that offer an ad-free experience. That ongoing shift will challenge marketers to adopt new ways of doing things.
“There’s one over-arching thing we all need to recognize, which is that the old model doesn’t work,” Adam Gerber, global chief investment officer at Essence, a unit of WPP’s GroupM, said in this interview with Beet.TV. “We’ve got a polluted environment — the tremendous amounts of advertising that just isn’t relevant or useful to viewers anymore.”
Making advertising work better for people is at the heart of an effort by GroupM to promote a media-buying framework it calls “Responsible Investment.” The idea is to create a healthier advertising ecosystem that advances brand safety, data ethics, responsible journalism, sustainability and diversity, equity and inclusion.
As higher-income households subscribe to paid services that don’t carry ads and lower-income consumers stick with free, ad-supported channels, the media marketplace will reflect a growing divide. That’s worrisome.
“We’re moving to a world of have’s and have-not’s,” Gerber said. “Increasingly, we’re going to have a population that can afford to avoid advertising, and to experience their video content à la carte and without interruption — which limits brands’ abilities to engage with them.”
That group also will have access to higher-quality news, information and entertainment, deepening the digital divide with others.
“We’re going to have an environment where large swathes of the population just don’t have access to some of the best premium content available because it’s all behind paywalls,” Gerber said. “That’s what really concerns me — whether it’s delivery of news, delivery of thought-provoking dramas, documentaries or just entertainment that helps people escape.”
Instead of loading up on advertising that becomes a nuisance and pushes audiences to pay for ad-free programming, media outlets will have to focus on improving the consumer experience.
“We need to make massive changes to ad load, and more importantly, we need to recognize that the old, legacy model of individual publishers selling their own inventory does not accommodate a world where we are mutually trying to reduce the ad load to the lowest degree possible,” Gerber said. “Advertisers need all of their partners on the sell side to work together to help us optimize campaigns — not within their own siloed portfolios, but across the entire ecosystem.”