Consumers like to complain about advertising. It interrupts television shows, delays the start of movies, clutters the landscape, and overwhelms social and online media. In response, various options have emerged to limit the ways and places marketers can reach consumers, from do not call lists, to paid subscriptions for services like Pandora that eliminate ads, to Apple’s decision to support apps designed to block advertising in its latest operating system. All of these initiatives have been met with praise, but what would happen if we took them to the extreme? What would the world look like if marketing and advertising just, poof, went away?
According to a hypothetical thought experiment by writers at Advertising Age, the first effect would be a massive hit to the economy. Marketers and advertisers spend about $189 billion in the United States and $592 billion worldwide. Without such spending, and the marketing jobs associated with it, the global economy would plummet.
In these dire straits, consumers would suffer too, in the form of higher prices for, well, everything. But Advertising Age focused its analysis specifically on digital offerings. Want to get the news? At the moment, because it earns advertising revenues too, The New York Times charges $195 annually for an online subscription. Assuming all ad revenue disappeared, that price would jump to about $335 per year, just for the online version.
Similarly, access to televised entertainment would cost more, but the offerings likely would diminish. In a setting without any advertising, each channel would charge a fee. Using the existing fees charged by services such as HBO and Hulu for ad-free viewing, the estimates suggest that consumers would wind up paying around $1200 per year to access about a dozen channels each. Some currently available channels that appeal to relatively small, niche audiences likely would not be able to survive though, so the options would shrink overall.
For online fun, Advertising Age predicts a shrinking offering too. Because Facebook is so widespread and popular, it likely could make up for any lost advertising revenues by charging users just about $12 per year, and most users likely would be willing to pay that rate. However, the charges would severely limit Facebook’s spread into less developed nations, where $12 is more than many people earn in a fortnight. Other sites, such as Buzzfeed, would likely disappear altogether. Although it can be a fun distraction to click on the stories, people are unlikely to spend much for the ability to see a list of the latest celebrity makeup disasters.
What are some other outcomes you could imagine for a world without marketing and advertising?
Source: Simon Dumenco, “Ad Age Imagines a World Without Ads—And It’s Not Cheap,” Advertising Age, September 28, 2015