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?
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> 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.
Google is one of the most valuable companies in the world. The vast majority of their money comes from ad revenue. Advertising spending is higher than it’s ever been. It just isn’t spent much on magazines and newspapers anymore.
According to Statista, advertising budgets are going up pretty much every year. https://www.statista.com/statistics/429036/advertising-expenditure-in-north-america/
I think the biggest difference is the rise of influencers and that marketing and content are no longer two different things. The ads are embedded in the content. Some are obvious when the video takes a break and talks about Raid Shadow Legends. Others are more subtle when the ad is product placement or paid reviews.
Instead of giving $1,000,000 to NBC, there is $5000 going to 200 different influencers, each with a very targeted scope. So if you aren’t part of that world, you’ll never see the ad.
Coke, Pepsi, GM, etc still do the huge ads. But for everybody else, targeted in the way to go.
Many others have answered abiut where the money went, and they’re right. They’re spending the money online. The key thing that many of those businesses had was *distribution* in the pre-internet era. If you’re the only paper/radio station in a town of 10k people, people would buy/listen because there was no other option as well, so you were guaranteed an audience. Same thing if you’re the wall Street journal/local TV station etc.
Now journalism from all over the world is free on your phone, I can listen to podcasts by people from anywhere etc, so unless the local paper/radio/TV station can *really* differentiate itself, I’m just not gonna use it…are you? :p
Keep in mind – the purpose of advertising is to make money by people seeing your ads…
the consumption of the media you stated has plummeted, so who would want to pay for ads in something that nobody looks at
They think people buy more things when they see them more often. I avoid the products that are aggressively shoved in my face personally. I know im not the only one.
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