James L. McQuivey, Vice President, Principal Analyst and Keith Johnston, Vice President, Research Director
The shift away from interruptive advertising brings customer engagement — human engagement — to its natural state, where conversations are anchored on knowledge of who the customer is and the intent of the conversation. But this requires a fundamental rethinking and rebuilding of how brands engage customers, how advertising works, how publishers make money, and how digital platforms evolve.
The shift away from the interruption-based advertising model will have a severe impact on agencies and adtech vendors that cannot adapt to a new way of doing business. This risk appears in stark contrast as the economic and brand impact of bad ads, ad safety, and poor ROI become clearer to CMOs. Whereas a 2% growth rate in advertising used to seem like a bad year, the advertising market may now need to withstand double-digit negative growth as CMOs re-allocate advertising funds to digital experiences.
Publishers are already under the gun. A large-scale reduction in advertising will starve those publishers that are overly dependent on the ad-supported model and unable to win subscription-based customers due to undifferentiated content.
If the “from” in this equation is old-school advertising, the “to” is digital platforms. Over time, they will be the underlying environment that facilitates personalized conversations based on an individual’s preferences at that moment and in that context. These platforms may have an over-sized impact on shaping those preferences that may favor one brand over another.
In this episode, James and Keith look beyond the end of the interruption-based advertising model to a model centered on natural conversations and discuss the fallout: the winners, the losers, and the different priorities that emerge for brands, agencies, adtech vendors, publishers, and digital platforms.