Mike Ewing, Head, Department of Marketing, Monash University
Today, media providers often see content as the ‘sugar’ that makes the ‘bitter pill’ of advertising more palatable to consumers. However, as the following examples from the world of sport suggest, this view emerged only slowly over time. Moreover, the relationship between content providers and media owners is changing as content providers leverage greater control over the advertising and commercial opportunities afforded by new media platforms.
In 1902, circulation figures for the French daily newspaper L’Auto were low relative to those of its chief rival, Le Vélo. The editorial team of L’Auto held a crisis meeting to identify a strategy to increase circulation. It was suggested that the newspaper organise a multi-stage bicycle race around France. The editor of L’Auto was originally unconvinced by the idea. Nevertheless, the paper’s financial backers supported the strategy, and in July 1903, the paper organised (and reported on) the inaugural Tour de France. Coverage of the race had an immediate impact on circulation figures; sales of L’Auto increased from 25,000 before the race to 65,000 immediately after. L’Auto would go on to out-sell Le Vélo, and the Tour de France would become the world’s premier cycling race – with phenomenal global media coverage, advertising and sponsorship.
By the 1970s, media proprietors were cognisant of the importance of securing exclusive media content. However, their efforts in this regard were not always successful. In 1976, for example, the Australian Cricket Board refused a bid by the late Australian media baron, Kerry Packer, for the exclusive broadcasting rights to Australian cricket. In response, Packer established his own cricket competition by secretly signing agreements with leading Australian, English, Pakistani, South African, and West Indian players. In a radical departure from hundreds of years of tradition, he also introduced coloured (as opposed to white) sporting clothing, white (as opposed to red) cricket balls, night (as opposed to day) matches, and better pay for players. In effect, he adapted cricket for television audiences so that his network could sell more television advertising. Cricket has never been the same.
Today, content providers understand the value of their ‘product’ and are seeking to leverage greater control over associated distribution and advertising opportunities. The Australian Football League (AFL), for example, recently took control of the production and distribution of the AFL Record, a match-day publication that includes paid advertising. Next on the control horizon is likely to be Internet broadcasting and social media. This, in turn, would mean that the AFL not only owns the game but also controls the programming and advertising for emerging media platforms, giving them almost total control over an entire distribution channel.
What do we need to do now for this future?
Keeping track of developments in local and global sporting events could provide a leading indicator of larger trends in advertising and promotion (Taylor, 2012). Indeed, the examples above illustrate two fundamental trends that will no doubt shape advertising in 2020: (1) the shift in power from media owners to national (or international) sporting, entertainment or ‘other’ organisations (including user-generated); and (2) the inevitable and total shift from traditional (broadcast, print, etc) media to personal digital/mobile devices.
Shift in power
Modern (post-war) advertising has existed in an era where a small group of traditional media owners, networks, and studios have controlled both content and distribution. They thrived by selling fundamentally intrusive advertising to marketers via agencies. Sporting organisations (and pro-athletes) thrived by selling broadcast rights to networks. By 2020, we can expect to see sporting organisations, tech companies, internet powerhouses (Amazon, eBay, Google), live casters (Justin.tv, blogtalkradio, ustreamTV), and video sharing sites (YouTube, vimeo, vidder, metacafe) create and distribute more of their own content. In many contexts, this will cut out the role of traditional media channels and allow content providers or new media channels to become involved in the selling of advertising. YouTube, for example, allows users to place advertising on their uploaded content. While viewers have some ability to avoid watching these intrusive ads (i.e. to ‘opt out’), how long they will be able to retain this ability remains an open question. Indeed, the two fundamental business models for distributing content to date have been paid subscription for access to content and bundling content with intrusive advertising. However, when they have a choice, consumers would seem to prefer evading these attempts to monetise the provision of content. What business models will therefore exist in 2020? One option is that Internet service provision may become ‘free’ for those users prepared to consume (endure) advertising, with the alternative being that (more affluent?) consumers pay a premium for advertising-free ISP.
Personal digital/mobile devices
TV dinners were created for nuclear families that spent their evening in front of ‘the box’. The act of watching television was widely perceived to be communal. Advertising was intrusive and effectively priced, sold and measured on the basis of audience size (the more popular the show, the more advertising would cost). Four pairs of eyes were considered better than one pair (or so we thought until Ritson and Elliot’s (1999) study). Control of the remote became the subject of numerous jokes and stereotypes (masking the fact that everyone had to agree on and watch the same show). By 2020, family members will probably all be watching their own show on their own handheld digital device. The challenge, as Taylor (2009) has already pointed out, will be to get consumers to actually watch ads on mobile devices. As with the examples highlighted earlier, this challenge may well be resolved by developing new forms of content that audiences are so desirous of consuming that they are willing to endure advertising.
Ritson, M. and Elliott, R. (1999), ‘The Social Uses of Advertising’, Journal of Consumer Research, 26(3) (1999): 260-277.
Taylor, C.R. (2009), ‘The six principles of digital advertising’, International Journal of Advertising, 28(3), 411-418.
Taylor, C.R. (2012), ‘The London Olympics 2012: what advertisers should watch’, International Journal of Advertising, 31(3), 459-464.