The Future of Monetized Media
We’re creeping ever closer to the 100th anniversary of the first television ad. Released during a baseball game in 1941, a watchmaker paid between $4–8 for a shaky, 10-second image. Fast forward 80 years to 2021, when linear TV ad spending reached $68.35 billion in the US alone and $196 billion globally, a peak it may never rise above as competing mediums continue to chisel away at its grandeur. While digital ads, Connected-TV, and social media have forever changed marketing across the globe, one thing is for certain: advertising is as agile as ever.
A QUICK HISTORY OF ADVERTISING
In the last 100 years, marketers have proven their adaptability, creativity, and ingenuity. Television ads weathered recessions, wars, and cable conglomerates. When our attention spans wavered, they became more quippy. When we got bored with jingles, they partnered with our favorite artists’ latest, greatest hit. They became shorter, funnier, and more storied than ever before. They capitalized on society’s most significant events — the Olympics, the Superbowl, and the election cycles. Despite our best efforts to fast-forward our TiVo or zone out during commercial breaks, we all still know that Mikey loves Life cereal, Coca-Cola wants to “buy the world a coke,” and McDonald’s has us sayin’ “I’m lovin’ it.” When advertisements make magic, we can’t avoid loving (but still hating) them.
At best, however, the linear television strategy is “spray and pray.” While advertisers could attempt to align commercials with the demographics of each program, it wasn’t a perfect science (admit it, Golden Girls was just too funny to be only watched by 60-year-old women…). There was no measurable line from a 30-second commercial to a direct sale; there was only hope. Advertisers did their best to test, measure, anticipate, and pivot to meet the ever-changing desires of consumers. Still, analytics on particular ads were time-consuming to gather, imperfect, and based on a lot of assumptions.
ENTER: THE INTERNET
The internet ushered in an unimaginable era for advertisers: behavior metrics, engagement data, and traceable ROI. It became a marketers’ playground, with customizable ads based on user preferences, retargeting abilities, and endless possible configurations (banners, pop-ups, sidebars, footers, scrolling ads, sponsored posts… are you dizzy yet?). For the first time, marketers could segment, target, and track their ads. In the mid-1990s, digital ads reached around $300 million, and a mere 30 years later, it has crossed $125 billion, representing nearly 62% of all advertising spend globally.
But while internet advertising was having its heyday, policy-makers and regulatory bodies caught on to Pandora’s box of data privacy. The European Union’s General Data Protection Regulation (GDPR) took the first step in giving control back to the users by mandating consent and data acquisition. This step caused a domino effect across other countries, with Apple following suit, requiring consent for in-app tracking and immediately slashing Facebook’s revenue over $13 billion.
Despite the crackdown on data privacy, digital ads will remain central to any company’s marketing strategy. Thankfully, it’s not just the big players who have found success online; small businesses, non-profits, and community organizations can deploy digital ads across social media platforms and search engines for a fraction of the cost of linear TV ads. The internet didn’t just make ads smarter; it made them more accessible. Lowering the bar for entry has democratized advertising, allowing for budget-friendly alternatives with measurable returns.
ENTER: CONNECTED-TV
In tandem with digital marketing, linear television advertising rose through the 1990s and 2000s — until Connected-TV (CTV). Netflix began as a DVD pay-per-rental model in the 90’s but launched its streaming service in 2007, with Hulu on its heels in 2008. Viewers loved the ability to watch on-demand, binge whole series in one weekend, and — for the most part — avoid commercials altogether. It was the beginning of the end for linear TV, with viewership in a steady decline for the next decade until 2017, when spending on TV ads declined for the first time since 1941, and digital ads passed TV ads by 41% to 35%.
CTV created a happy medium for advertisers; they received the data insights of internet users with the attention spans of television viewers. From 2020 to 2022, CTV ad spending globally doubled, reaching $21.2 billion. While Netflix, Amazon, Disney+, and Hulu remain the biggest players in the streaming industry, there are now over 200 different streaming platforms for advertisers.
ENTER: INFLUENCER ADVERTISING
In 2023, we’re still caught in the cross-hairs of an advertising identity crisis. Linear television persists, bolstered every two-to-four years by election cycles or Olympic series, holding white-knuckled to professional sports. Digital ads continue to climb, despite stumbling over larger and larger regulatory hurdles, and CTV has anchored itself as the long-form media of choice. White those three mediums were duking it out for king of the hill, a smaller, more subtle form of monetized media has emerged: Influencer Advertising.
A sneaky loophole in the data-privacy debate, influencer marketing allows popular content creators not to sell a product but sell their audience. It’s the best of all worlds — advertisers get a captivated audience, content creators, digital analytics, and fewer data regulations because viewers opt-in to receive this content. With a “brought to you by our sponsors” vibe, influencers endorse products or services in a seemingly authentic way, bringing companies closer to their consumers than ever before. A study found that millennials trust influencers 12% more than traditional product recommendations.
The benefits are reciprocated by influencers as well. Individuals with a strong social media following are compensated by brands to represent their products. There is no shortage of talent, either, with 54% of Gen Zs saying they would take the opportunity to rep a brand if offered. Influencer marketing is valued at $16.8 billion dollars this year and yields nothing but positive results for companies and content creators, alike.
THE QUICK TAKEAWAY
From 10-second static ads on shaky airwaves to million-dollar minutes during the Super Bowl to your neighbor endorsing a new water bottle brand from their living room — advertising has run the gamut in the past 100 years. While we may not even fathom the full trajectory, we can trust it will remain even more agile, data-driven, authentic, and closer to consumers than ever.
Whether you’re a billion-dollar company or a mom-and-pop shop, we recommend building a diverse portfolio of advertising strategies that meet your target demographic right where they are and not to be afraid of unconventional opportunities to market your business. The future is bright and boundless for advertisers, and even if you don’t want to make a hilarious reel on TikTok, there are plenty of folks excited to do it for you.
