IBM Global Business Services
IBM Institute for Business Value
The end of advertising as we know it
The next 5 years will hold more change for the advertising industry than Measurement – Advertisers are demanding
more individual-specific and involvement-
the previous 50 did. Increasingly empowered consumers, more self-reliant based measurements, putting pressure on
advertisers and ever-evolving technologies are redefining how advertising is the traditional mass-market model. Two-
thirds of the advertising experts IBM polled
sold, created, consumed and tracked. Our research points to four evolving
expect 20 percent of advertising revenue
future scenarios – and the catalysts that will be driving them. Traditional to shift from impression-based to impact-
advertising players – broadcasters, distributors and advertising agencies based formats within three years.
– may get squeezed unless they can successfully implement consumer, Advertising inventories – New entrants
business model and business design innovation. are making ad space that once was
proprietary available through open, efficient
Imagine an advertising world where… away from linear TV and adopt ad-skipping, exchanges. As a result, more than half of
spending on interactive, one-to-one sharing and rating tools. Our survey the ad professionals polled expect that
advertising formats surpasses traditional, suggests personal PC time now rivals TV open platforms will, within the next five
one-to-many advertising vehicles, time, with 71 percent of respondents using years, take 30 percent of the revenue
and a significant share of ad space is the Internet more than two hours per day, currently flowing to proprietary incumbents
sold through auctions and exchanges. versus just 48 percent spending equivalent such as broadcasters.
Advertisers know who viewed and acted time watching TV.
To envision four possible scenarios for
on an ad, and pay based on real impact
Creativity – Thanks to technology, the the industry in 2012, we juxtaposed two
rather than estimated “impressions.”
rising popularity of user-generated and of the most uncertain change drivers
Consumers self-select which ads they
peer-delivered content, and new ad – the propensity for consumers to
watch and share preferred ads with peers.
revenue-sharing models (e.g., YouTube, control marketing; and the openness
User-generated advertising is as prevalent
Crackle, Current TV), amateurs and semi- of advertising inventories (see Figure).
(and appealing) as agency-created spots.
professionals are now creating lower-cost Because industry players will progress at
Based on IBM global surveys of more advertising content. Our survey suggests differing rates, these scenarios will likely
than 2,400 consumers and 80 advertising this trend will continue – user-generated coexist for the foreseeable future.
experts, we see four change drivers content sites were the top destination for
Continued evolution: In this scenario,
shifting control within the industry: viewing online video content, attracting 39
the one-to-many model still dominates,
percent of respondents. Further, established
Attention – Consumers are increasingly in but the industry evolves in response to
players, like publishers and broadcasters,
control of how they view, interact with and DVR penetration, the popularity of user-
are taking on traditional agency functions
filter advertising in a multichannel world, generated content and new measurement
and broadening creative roles.
as they continue to shift their attention