IBM predicts paradigm shift in advertising

8 Nov 2007

The next five years will herald more change for the advertising industry then the last 50 combined, says IBM in its latest report, The End of Advertising as We Know It.

After interviewing over 2,400 consumers and 80 advertising executives from around the world, IBM found that while consumers increasingly have more power, rapidly changing technologies are also having a big impact on advertisers, changing their distribution channels, as well as how advertising is created and consumed.

The report suggested that traditional advertisers risk a major downturn in profit as they change over to new, more interactive models.

Mass marketing will no longer be how the audience is targeted as consumers expect personalised, niche advertising across all media platforms, especially on mobile devices.

Bill Battino, communications sector managing partner, IBM Global Business Services, said: “Digital entertainment is experiencing faster adoption than anyone had previously anticipated.

“The advertising community needs to dramatically re-orient its business to serve consumers who increasingly access content in non-linear formats.”

The report identified four areas that would drive the biggest changes in the advertising industry: control of attention, creativity, measurement, and advertising inventories.

With the increasing presence of digital video recorders (DVRs), the traditional television and video advertising models are no longer working: the survey showed that half of all DVR owners watch 50pc of their programming on replay, while 40pc of survey respondents found ads embedded in online video more irritating than any other advertising method.

By Marie Boran