Indrani Sen: The Missing Elephant

29 May,2017

By Indrani Sen

Yesterday, Gowthaman Ragothaman or GMan (as we all call him) posted on the Facebook: “Digital Platforms still requiring advertising revenues to invest in technology that eventually disintermediates advertising. This is the biggest paradox in marketing today. Very soon these two forces will be at cross-purposes and from it will emerge the “subscription” model from the current “subsidy” model”. The post generated some thoughtful comments to which GMan replied that in the futuristic “subscription model”, we will subscribe for advertising –as in – willing to know more about a brand or a category. Ranjan Kapur applauded GMan saying that “We will have arrived the day people subscribe for brand communication. It is a distinct possibility and you are going to be in a position to make it happen.”

 

Ashish Karnad added to the discussion by saying: “My take is that the subscription and advertising models will co-exist just like it does in television today”.  I responded to Ashish: “In traditional media, consumers do not have to pay for reading or viewing advertisements, the cover price of newspapers, subscription of cable or dish TV includes the cost of all types of content apart from the consumers’ time cost… Agree that as long as the consumers do not have to pay for the internet access cost, digital advertising will not have any handicap”.  I simply loved Gman’s reply to my comment:“This is the missing elephant everybody is playing around with!”

 

The above chat on Facebook based on Gman’s post summarises our concern about the future of advertising in the world of digital media.  Yesterday, I also read an interesting article by Lucy Handley on www.cnbc.com (courtesy etbrandequity.com) titled: “Is Advertising Over? What the chief marketers are saying about the future of marketing” suggesting that “there are clear signs of nervousness among big business and recognition that ads can be super annoying.”  (http://www.cnbc.com/2017/05/26/is-advertising-over-what-chief-marketers-are-saying-about-the-future.html).

 

The article referred to a report published earlier this month byForrester Research: “The end of advertising as we know it.”Forrester’s research suggests that 38 percent of U.S. adults who use the internet have installed an adblocker, and 50 percent claim to actively avoid ads on websites.Co-author James McQuivey has suggested that in future,digital assistants will replace Google search, and bots will become digital slaves who at their masters’ commands will scrape and remove stuff people don’t care about, including advertising before presenting people’s social media and other internet feeds back to them.

 

The same article quotes Keith Weed, Chief Marketing Officer at Unilever saying: “Adblocking is a hugely hot topic… There has always been adblocking. Adblocking was the 30-second TV ad coming on air and you got up to make a cup of tea. That was real physical ad avoidance and what did we try to stop that happening is to create more engaging advertising…There is a huge fragmentation and clutter out there in advertising absolutely, and so people have more choice and I totally agree [that] this idea of the attention economy, of course people have choice, they can switch around more, and hence if we as advertisers don’t show great advertising, people switch around more.”

 

We need to find out if people are using adblockers because they do not like the quality of the advertisements or they want to save the cost they are paying for accessing advertisement on the internet. If the consumers have free access to internet, will they still be using adblockers? This is the “Missing Elephant” that we are playing around with without knowing who will bear the huge cost of installing the free internet network in public places and who will maintain them.

 

If advertising has to subsidise the system of free internet, then will the access of free internet in any public place be automatically denied to any platform with an ad blocking tool? The “subsidy” and “subscription” models of internet can co-exist in future with the first model based on free access to internet with an in-built mechanism of rejecting access to all mobiles, tablet, laptops etc. with adblocking devices and the second model based on subscription to the internet and digital content including selective information about a brand or a category.  We need to find the “Missing Elephant” before investing in creating great advertisements as once the consumers decide to block the ads, they will not be able to judge how good or bad the advertisements are.

 

Indrani Sen is a media services veteran, having worked with JWT, later Mindshare and then with Emami. In recent years, she is an independent consultant and academic. She is Adjunct Professor in charge of the Media Management programme at the Symbiosis Institute of Media & Communication, Pune. The views expressed here are her own.

 

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