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The media offers a service to consumers, such as entertainment or education. But it doesn’t do this for nothing; so-called “free” media often causes consumers to incur a cost in the form of advertising. By showing advertisements, media sources grab consumers’ attention for purposes such as increasing awareness about a product and/or providing producers access to consumers, while extracting fees from those product-makers and producers. The media industry is then unique in that it can act more as a broker than a supplier, bringing together advertisers and consumers.
For about the past 50 years, advertising has supported “free” media services, such as television and radio. Despite recent declines in advertising—US measured-media ad spending fell 4.1 percent in 2008 and plunged 14.3 percent in the first half of 2009.65 U.S. advertising expenditures are starting to improve, with a 5.1 increase in the first quarter of 2010.66 During this period of low advertising dollars, media sources with a diversity of revenue streams, such as subscriptions and fees, did better than those wholly or heavily reliant on advertising. The following graph shows U.S. measured-media spending for all advertisers in 2009.67
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If you were in charge of advertising for a food company and wanted to advertise on a cable news network, would you be willing to advertise on that network if it ran a news story that claimed your product was unsafe? |
Advertising products to consumers has taken new forms recently:
- Advertorials. News stories or editorials can sometimes be subtle product advertisements. Dan Brown appears on Good Morning America to discuss the “Da Vinci Code”
- Advertainment. Some forms of entertainment aim to advertise a product.Coca-Cola’s “Open Happiness” Music Video
- Product placement. Some forms of entertainment that do not aim to advertise a product can nevertheless contain advertisements for products. 2008-2009 UEFA Champions League Final Highlights
Furthermore, the audience itself can become a product. According to Noam Chomsky, corporations sell audiences to other companies in that they grab the attention of a specific demography. In this way, some forms of media allow consumers to “self-select” themselves for advertisers.
Learn More:
Mr. Sands, Director of McKinsey, and Mr. Phillips, Director of Search and Analytics for Google , discusses the importance of branding in the online arena. http://vimeo.com/30091515
Marc Frons, Chief Technology Officer of The New York Times, discusses different advertising models for the digital era: http://vimeo.com/30040552.
65 Johnson, Bradley. “U.S. Media Revenue Set for Historic 2009 Decline.” MediaWorks. October 5, 2009. http://adage.com/mediaworks/article?article_id=139445
66 http://www.kantarmediana.com/news/05262010.htm
67 http://printinthemix.com/fastfacts/show/350