Digital disruption dire for traditional advertising

Nov 08, 2007

The advertising industry is facing more upheaval in the next five years than in the previous half century, according to a new report. “The End of Advertising as We Know It" from IBM Global Business Services shows more-empowered consumers, more self-reliant advertisers and evolving technologies are redefining how advertising is sold, created, consumed and tracked.

Traditional advertising players risk declining revenue as budgets shift to new, interactive formats, which are expected to grow at nearly five times that of traditional advertising.

To survive in this new reality, broadcasters must change their mass audience mind-set to cater to niche consumer segments, and distributors need to deliver targeted, interactive advertising for a range of multimedia devices, the report recommends.

"Digital entertainment is experiencing faster adoption than anyone had previously anticipated. The advertising community needs to dramatically re-orient its business to serve consumers who increasingly access content in non-linear formats," said Bill Battino, Communications Sector managing partner, IBM Global Business Services

More than half of ad professionals polled by IBM expect that the next five years will see open advertising exchanges (currently led by companies like Google, Yahoo, AOL) taking 30 percent of current revenues now commanded by traditional broadcasters and media.

"Advertising remains integral to pop culture and continues to fund a significant portion of entertainment around the world. But it needs to morph into new formats and offer more intrinsic value to consumers, who will have more choices,” said Saul Berman, IBM Media & Entertainment Strategy and Change practice leader. “Young people in particular have grown accustomed to not paying for content. Despite greater consumer control over content and advertising, we envision a world where consumers will continue to prefer to view advertising rather than pay for content directly."

Source: IBM

Explore further: After a decade online, YouTube is redefining celebrity

Related Stories

Facebook seeks to get smarter with big data

Dec 14, 2013

Facebook is working to become your new best friend, getting to know you better by infusing the billion-member social network's software with artificial intelligence.

Cisco grabs for 'No. 1 IT company' crown

Dec 07, 2012

(AP)—Cisco Systems Inc. isn't content to be the world's largest maker of computer networking gear. It says it wants to become the "No. 1" supplier of information technology to big businesses by broadening its offerings ...

Yahoo turns to former nemesis to be its CEO savior

Jul 17, 2012

(AP) — As a top executive at Google for the past 13 years, Marissa Mayer played an instrumental role in developing many of the services that have tormented Yahoo as its appeal waned among Web surfers, ...

Recommended for you

ICANN chief stepping down in early 2016

May 21, 2015

The head of the group that oversees all Internet addresses will step down early next year, after a plan to end US oversight of the key nonprofit organization.

How alternative currencies could catch on and cash in

May 21, 2015

Alternatives to cash, like Bitcoin and Uber, may never replace the coins in our pockets or paper bills in our wallets, but they are creating significant social and economic impacts, and with some design adjustments, ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.