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Starving at the feast: Why big media are failing to capture the shift in big advertising

Nevo Hadas. Starving at the feast: Why big media are failing to capture the shift in big advertising. Context. Age of media boom From scarcity of media to plenty Traditional media struggling Need to change course

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Starving at the feast: Why big media are failing to capture the shift in big advertising

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  1. Nevo Hadas Starving at the feast: Why big media are failing to capture the shift in big advertising

  2. Context Age of media boom • From scarcity of media to plenty • Traditional media struggling • Need to change course • Adopt business models to fit the new paradigm of high media production and consumption • Big media—conglomerates

  3. Advertising supported business model Big media use advertising supported business model based on 3 critical tools: • Distribution power: few players • Scarcity: Limited advertising space • Imperfect information: estimates

  4. Impact of Internet Changes media marketing power/ price structures • Distribution: Monopoly to anarchy Anybody can provide media • Limited to unlimited ads space/content Advertising cost declines • Imperfect to perfect information Easy to monitor reach & interaction Advertisers interested in paying more per customer interaction than bulk of audience

  5. Relevance over reach • Big media advertising sold based on reach instead of targeting relevant consumers • Adverts reach target as well as segments not in the target market • High levels of wastage • Advertiser pays for them all

  6. Relevance over reach

  7. Search advertising model • New advertising model allowing advertisers to get to the target • Driven by consumer demand not media supply • No wastage thus increases audience value for advertiser & media owner

  8. Demand vs supply based pricing Big media encouraged to adopt demand-based pricing e.ggoogle pricing model • Keyword auction: set a price for a keyword whose value increases when typed into google • Advertisers pay for results/ cost per click

  9. Demographic/ behavioral targeting • Demographic information key for advertisers to target specific market • Behavioral targeting: searching customers with actions, interests aligned with target market • Viewing individual browsing patterns to discern potential buying patterns • Behavioral targeting favors platforms that reveal insights into personal preferences & behaviors e.gfacebook

  10. Way forward • Best winning formula: Data • Challenge for media houses: provide infor about & access to specific markets • Small, targeted media platforms with advertising messages tailored to fit are best

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