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IBM Global Business Services
IBM Institute for Business Value quick read 
The end of advertising as we know it
Imagine an advertising world where…spending on interactive, one-to-oneadvertising ormats surpasses traditional,one-to-many advertising vehicles,and a signicant share o ad space issold through auctions and exchanges.Advertisers
know 
who viewed and actedon an ad, and pay based on
real 
impactrather than estimated “impressions.”Consumers sel-select which ads theywatch and share preerred ads with peers.User-generated advertising is as prevalent(and appealing) as agency-created spots.Based on IBM global surveys o morethan 2,400 consumers and 80 advertisingexperts, we see our change driversshiting control within the industry:
Attention – 
Consumers are increasingly incontrol o how they view, interact with andlter advertising in a multichannel world,as they continue to shit their attentionaway rom linear TV and adopt ad-skipping,sharing and rating tools. Our surveysuggests personal PC time now rivals TVtime, with 71 percent o respondents usingthe Internet more than two hours per day,versus just 48 percent spending equivalenttime watching TV.
Creativity – 
Thanks to technology, therising popularity o user-generated andpeer-delivered content, and new adrevenue-sharing models (e.g., YouTube,Crackle, Current TV), amateurs and semi-proessionals are now creating lower-costadvertising content. Our survey suggeststhis trend will continue – user-generatedcontent sites were the top destination orviewing online video content, attracting 39percent o respondents. Further, establishedplayers, like publishers and broadcasters,are taking on traditional agency unctionsand broadening creative roles.
Measurement – 
Advertisers are demandingmore individual-specic and involvement-based measurements, putting pressure onthe traditional mass-market model. Two-thirds o the advertising experts IBM polledexpect 20 percent o advertising revenueto shit rom impression-based to impact-based ormats within three years.
Advertising inventories – 
New entrantsare making ad space that once wasproprietary available through open, ecientexchanges. As a result, more than hal othe ad proessionals polled expect thatopen platorms will, within the next veyears, take 30 percent o the revenuecurrently fowing to proprietary incumbentssuch as broadcasters.To envision our possible scenarios orthe industry in 2012, we juxtaposed twoo the most uncertain change drivers– the propensity or consumers tocontrol marketing; and the opennesso advertising inventories (see Figure).Because industry players will progress atdiering rates, these scenarios will likelycoexist or the oreseeable uture.
Continued evolution:
In this scenario,the one-to-many model still dominates,but the industry evolves in response toDVR penetration, the popularity o user-generated content and new measurement
The next 5 years will hold more change or the advertising industry than the previous 50 did. Increasingly empowered consumers, more sel-reliant advertisers and ever-evolving technologies are redefning how advertising is sold, created, consumed and tracked. Our research points to our evolving uture scenarios – and the catalysts that will be driving them. Traditional advertising players – broadcasters, distributors and advertising agencies – may get squeezed unless they can successully implement consumer,business model and business design innovation.
Media andEntertainment
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