Must Read for marketers : The Next 18 Months – “
“It’s official. Americans are “cutting the cord.” In the last few months alone, more than 600,000 subscribers quit their cable and satellite companies, saying they’re content to find another way to catch their favorite shows.” –Yahoo News
This is part one of a four part essay MA+A founder Bob McKay wrote to explain why everything about digital advertising is about to change in the next 18 months. Bob is a confirmed speaker at the Tampa Bay Business Journal’s Disruption Day on Oct. 1, but will lead MA+A’s FREE Digital Breakfast with Google on Sept. 17. Register for one of our limited seats.
One in ten people have “cut the cord” with their cable service, and this scenario parallels home phone decline during the adoption of cellular phones and PDA’s. Think about it: In 2005 everyone had a home phone, and there were a few young outliers that disconnected. More small defectors surfaced for a few more years before rapid defections started. Our agency handled Comcast cable’s business for most of the state of Florida from 05- ‘11. Once the consumer began to perceive the home phone as a vehicle for sales solicitation that only elderly valued (not the primary way to communicate) they began rapid home phone cord cutting. That was a poor value proposition for the majority began to conclude service.
Fast forward to 2015 and you see the exact momentum for cutting cable out of your life.
For years lobbyists and congress who would try to heavy hand cable companies into delivering more choices for the channels consumers preferred. Instead of getting the whole bundle for $99 the idea was to pick and choose for a lower price option. Cable giants never budged and held tight to bundle pricing, developing reputations as overvalued home services with poor pricing structures.
Not a very lucrative brand strategy in a competitive world, but at the time each cable company was pretty much the only choice for consumers in a particular geo. Now technology gives the consumer amazing opportunities to choose what they want to view.
Content providers have realized they can now deliver entertainment direct to the consumer, so cable companies no longer have a stranglehold on the distribution. This should be very reminiscent of their home phone business coming to an end. Overnight, the consumer has choices and similar to the phone, this consumer wants to consume the service not just at home, but away from home and in other environments. Convenience and choice become important and now cable companies are over priced and feel like a relic service.
I’m not just describing this scenario to make cable companies look bad, or suggest that they used their FCC exclusivity to bully the consumer (which they did), but to enlighten the advertising community on what this now means to them. The ability for consumers to be reached with broadcast TV and cable TV ads is losing scale every day. TV viewing isn’t going away — it is going everywhere. This means the online means of targeting consumers is developing more scale and the two trajectories should cross paths in the near future. If your marketing department or your agency is not engaging online video as part of your mix then you need to begin that conversation quickly. It is the same as a company who relied on phone marketing during the home phones disruption. Every day there are less people to reach and one day it is only the 70+ consumer. It is going to begin to happen rapidly.
Click Here to read part two of Bob’s four part essay explaining why everything about digital advertising is about to change in the next 18 months. Join MA+A’s FREE Digital Breakfast with Google on Sept. 17 by registering for one of our limited seats.