Eli5 What changed in advertising that killed or severely weakened the industries that rely on Ad revenue?


Magazines, newspapers, television and radio stations all rely on ad revenue and seem to be dying off. Are advertisers just spending less? If not, where are those ad dollars going?

In: 3

> where are those ad dollars going?

You’re on it right now – the internet.

The internet allows for cheaper, more scalable, and infinitely more targeted advertising compared with print, television, and radio.

Online advertising is incredibly targeted.

If you want to take out an ad in a newspaper that targets 35 year old white men who own a pickup truck and have searched for “mitre saw” and “how to install vinyl plank flooring” in the last month, you just have to take out an ad in a whole newspaper.

If you want to do the same thing online, you can target a very specific subset of people.

Online advertisers can deliver essentially the same number of new customers from an ad campaign but only show the ads to a small number of relevant potential customers. This means they can undercut traditional advertising on the rates, while essentially selling the same ad space thousands of times for every different viewer.

Thus, online advertising is the most cost effective way to advertise, which means traditional ad-based media gets hurt.

You can now target your demo in ways where spending like $1k a month on advertising can net you 50x that. Back before smartphones and internet access and understanding how to use it, advertisers had to cast a wide net and catch as many people in their target demo as they hopefully could. And the ads had to have as much mass appeal as possible.

With all that said, the new system is very flawed. The biggest being spying on a user then pushing an ad for a product they probably already have isn’t just shady, it pisses people off.

In addition to what everyone is pointing out, the fact that conversions (i.e. people actually buying stuff based on ads) are trackable now shows a lot of people just how INeffective most advertising is. If you spend time and money targeting your ad campaign and still get a negligible conversion rate, you may well take away the conclusion that advertising won’t work for your product, and look to other means of selling or making money. Traditionally, when tracking conversions was very hard and extremely inexact, you could easily keep up a failing ad campaign for years, supporting the newspaper or whatever even though it wasn’t really working for your business.

We stopped using those services. I get 100% of my information from the internet. All of it, including news, music, & tv. Magazine ads and radio ads are lost on me and the majority of people.

This is why the streaming services are now increasing prices, making ad-free options a premium, and sometimes still forcing unskippable ads into the service. They want to cash in on those advertising dollars.