Consumers are able to more easily avoid marketing messages than ever before because to the ongoing introduction of multitiered streaming services. These customers pay a premium to watch content without having to worry about any commercial breaks or interruptions. The clients who have the greatest discretionary money are also the ones who are in the best financial position to skip advertisements in their entirety. This presents a conundrum for marketers, who are just as eager as they have ever been to reach higher-income families.
As a result of this dilemma, marketers are reevaluating how they should use their advertising budgets in order to get the most return on investment. Analyst and research director at Gartner Eric Schmitt made the observation that the individuals advertising most want to attract are hiding from the ads.
People are “Buying Out” of being exposed to advertisements.
When it comes to television advertisements, companies that market their products to consumers with extremely high levels of wealth typically do not spend a significant amount of money; however, this is not the case for companies that market their goods to consumers with the intention of inspiring aspirational purchases. And yet, marketers and purchasers of media are well aware that advertisements are seldom appreciated, even in the best of circumstances; this is true regardless of the substance of the advertisements or the target demographic. Customers will go to whatever lengths that are within their capabilities to avoid being forced to watch advertisements while accessing the material that is important to them.
In addition to this, wealthy clients have a greater propensity to acquire iPhones, which, in comparison to other mobile devices, come pre-installed with a greater number and wider variety of digital privacy limitations. And although the manner in which we even define a “high-income” family in the first place is rather arbitrary, in the United States at least, it is often delineated as one whose yearly income is more than $125,000.
When we take a more global view while maintaining that categorization, we find that according to data from the Global Web Index from 2020, seventy percent of consumers with higher incomes choose to pay for a product’s premium edition if doing so allows them to bypass advertisements. In what ways will this pattern have advanced further in the three years that have passed since then? In addition, the GWI discovered that 32 percent of people in this income bracket use ad blockers, which is a higher percentage than any other income level. The families that marketers most want to sell to are, in effect, the same households who are “purchasing out” of advertising completely.
Attempts are Being Made by Advertisers to Stay One Step Ahead
However, this is by no means the end of the road for marketers who want to sell their wares to homes with greater incomes; rather the contrary. For instance, some businesses are rekindling their interest in direct mail while others are shifting their emphasis to include more material online in order to attract potential customers. To put it another way, they are moving their focus to areas where consumers do not have as much of an opportunity to “opt out.” And when it comes to streaming video, a trend toward people opting out of advertisements may very likely lead to more intense product placement in programmes, particularly those that centre upon lifestyles that seem to be idealised versions of others’ lives.
This Is Just the Beginning of a Major Shift in the Manner in Which Advertising Is Conducted
Because of this trend, historically ad-supported media channels, such as television, are expected to face even larger issues in the years to come. This is because advertisers will move elsewhere to target higher-income audiences, or they will spend more resources promoting to past clients. Why? Because the consumers who have the most discretionary cash are the ones who are going to be the hardest to reach via the many channels of media advertising, ad spend will gradually but inevitably decline.
There are, without a doubt, certain notable exception. Consider live sports, which continue to attract large audiences while also providing avenues for high-value sponsorships and athlete-driven brand endorsements. It’s important to note that even on streaming platforms, it’s not always possible to completely avoid commercial breaks during live sporting events. However, we will most likely see a continuous dispersion of media expenditure into other channels for targeting higher-income consumers. These other avenues include organic social postings and new formats such as the developing metaverse.
It’s not clear yet how this amazing change will affect the way advertising works in and of itself. As the CEO and cofounder of Pixated, a performance marketing and web design agency, there is one thing I can say for certain that marketers need to keep in mind: the onus is not on customers to watch or listen to advertisements. Regardless of what happens, this is something that marketers need to keep in mind. It is up to the marketers to choose how to make their advertisements interesting enough to warrant attention in the first place.
freedom