EkaLore has written previously about the Alien Invasion of the advertising and marketing marketplaces with the changes from traditional print (magazines, newspapers, flyers) and broadcast (radio, TV, cable) media.
In 2022, the traditional broadcast media (TV and cable) changed from a majority of viewers to a minority. The estimates of the drop vary with drops in the 5-6m viewers changing their habits. Over roughly 10 years, cable-TV revenue subscribers dropped from 95-100M to about 70M.
The shift in advertising markets is as profound and widespread as the move from linear viewing to streaming (see Background). Global colossal tech enterprises (Baidu, Jio, Amazon, Netflix, Alphabet/Google, Microsoft, Vodafone, Liberty, and Bertelsmann) now report on their rise and falls in advertising revenue—the 'horse race' results lever global equities markets (Snap, Meta, Roku) quarter-by-quarter.
The results aren't uniform, and equity marketplaces are not forgiving. Financial results were mixed in a USA media advertising market with 7.4% year-on-year lower spending. Examples:
· Alphabet Google/YouTube announced YouTube advertising revenue was down 2.6% while overall revenue growth was only 3%.
· In 1Q 2023, Amazon reported a 21% increase in advertising – down from 23% last year.
· Apple saw foreign exchange and macroeconomics affecting their media and advertising results.
· Microsoft saw only a 3.4% year-on-year after an acquisition (Xandr).
· Meta/Facebook saw ad impressions increase 26% year-on-year with the average price per ad down 17% year-on-year.
· SNAP revenue fell 7% in its first public losing quarter.
· Much traditional media saw drops. Fox saw a drop of 6%. Sinclair saw core advertising drop 14%, with local stations revenue drop 6%.
Streaming providers also saw subscription growth with margin challenges.
The Alien Invaders have landed. They have:
· Destroyed the margins of old market participants
· Disrupted relationship business models at all levels, from creation to final viewing
· Use technology enabled change (like mobile) to accelerate competition, and
· Realized gains even as even more competitors and competitive products/services entered.
The Alien Invaders have attacked traditional incumbents in their margins and 'cool.' The trends in technologies and investments are against the incumbent's traditional strengths. Business models encouraged by equity investors, regulators, and long-time partners must be highly revised.
The apparent success of Alien Invaders still casts dangers for traditional incumbents. The disruptions are barely started, and societal ripple effects are still to be seen.
To be continued…
You’ll find part 2 of the series at www.ekalore.com/alien-invaders
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