Ad strategy in a digital-first environment Rethinking acceptance, tolerance and effectiveness

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The 20,000 Foot View:  Digital-first behaviours and the proliferation of choice have caused underlying changes to how consumers perceive and respond to brands. Brand loyalty has been replaced by content fandom. Frictionless service-switching and overlapping subscription now clashes with high-value content moving between platforms in short time frames and across differing geographies. This has resulted in lower brand recognition, and less brand loyalty overall as the value proposition is subject to rapid change. Meanwhile, ad proliferation in a digital environment has saturated content feeds and consumer resistance has grown, particularly with the likes of Facebook showing competitor brands side-by-side – making it almost impossible for subliminal messaging to stick. New strategies are needed, focusing on understanding how consumers relate to brand-based advertising. Forward-thinking content providers must either more carefully cultivate their brand visibility, or embrace the prominence of content. 

Key insights

• While the shift to digital-first life has long been underway, the        pandemic has accelerated it.        of US consumers over the age of        were binge-viewers of TV shows in        2021, and        pay a monthly subscription for video – up from only        in        2019
• Mainstream digital-first entertainment creates a market dynamic defined by the proliferation of choice, ease of service-switching and ubiquity of access
• As consumers spend more time online growing accustomed to having control over what they consume and when, their tolerance for served ads deceases
• Skipping video ads online has increased since        2019 across all age groups, most strikingly for those age 20-24 (up        points) and        (up        points)
• Advertising has turned from brand recognition and loyalty to a click-through-to-purchase, instantaneous and one-off interaction – which is more of a roulette game to see which ad the user clicks on in their feed, rather than a long-term brand-consumer relationship
• Advertisers should think about their jobs the same way that content strategists do, taking into consideration not just what message ads should be getting across but what their format and message do for the consumers who see them
• Overall marketing spend and methods should therefore be considered when measuring total market ROI for advertising, to better account for the content advantages of the more flexible and creative outreach available to the broader strategic umbrella

Companies and brands mentioned in this report: Amazon Music, Apple Music, Clubhouse, Fortnite, Instagram, Lego, Netflix, SoundCloud, Spotify, Star Wars, TikTok, Twitter, YouTube, YouTube Music, Facebook, The Witcher