I remember when, as a boy, my family got its first large outdoor antenna for our home. My father pounded a piece of metal pipe into the ground outside our front door to put the antenna in, holding it upright. Then he ran some wiring in through the window and attached it to our television. When he wanted to change the channel, I would go outside and rotate the antenna within the pipe by hand until we got the best reception possible for the next channel he planned to watch. This was a major upgrade from indoor rabbit ears that barely received any signal.
After years of walking out into the snow, rain, or heat to adjust the antenna by hand, my father moved it to the roof and added a fancy rotor mechanism with which we could turn it from inside the house. What luxury! We still received the same four TV channels (ABC, NBC, CBS, and FOX), but at least I didn’t have to stand in the snow to watch a different network.
Access to music was about the same. Four FM stations that came in reasonably well, playing a mix of oldies, rock, pop/hip-hop, and country. This was the pipeline of information into my small town. Everyone was watching and listening to a fairly narrow selection of content. When you got to school on the bus, you were pretty sure your buddy had watched the same show the night before, and listened to the same radio station on the way in. “Did you see what happened?” “What did you think of that new song?” “Will that DJ ever shut up and just play some music?” “I know, right?” Not anymore.
Today, my children and their friends have access to a functionally infinite selection of content channels from around the world. Social media, streaming TV and radio, podcasts, torrents, group chats, online video games, forums, and on and on. No longer do you have to wait to hear your song on the radio station; you just tell your streaming service what you want to hear, and it happens. And radio and television stations don’t get to be the gatekeepers of your content any longer. There are no executives or A&R men choosing what makes it and what doesn’t. Anyone can publish anything, and everyone can choose to like it or not.
No longer is culture a shared phenomenon, at least not at the local level. Now you share culture with your fandom. That could be any random selection of people from all over the world who enjoy the same narrow band of content as you. Can you share these things with your friends at school? Sure. But the kids at school aren’t necessarily coming into class having watched the same shows and listened to the same songs as you.
Under the Influence
Aside from the constellation of video and music streaming services giving them access to any movie, show, or song at any time, kids can watch and potentially even interact with an estimated 150 million social media influencers across the major platforms (Instagram, TikTok, YouTube, X, and others, according to reelmind.ai). That’s a lot of options.
“Is that bad?” you’re probably asking. No, a unique culture geared toward our own specific taste isn’t an inherently bad thing. But much like the church has fallen by the wayside as a societal cornerstone, now mass media has also fallen from its perch as a piece of our cohesive culture.
Society and culture aren’t just collections of people who pay taxes to the same government. They are a shared experience. But despite everyone sharing their entire life online, real sharing seems to happen less.
How can society have a shared cultural identity when everyone can pick their own culture a la carte from millions of choices? Does it even need a shared identity?
Get Down to Business
Society may not need a shared culture, but it makes things easier for businesses when it has one. How are consumer products companies supposed to budget their advertising across a constellation of ever-changing advertising platforms and influencers? Yes, data companies enable micro-targeting of individuals with ads tailored to their interests and demographics, but can that really compete with the effectiveness of advertising to a population held captive to four major TV networks and a small collection of radio affiliates? The answer is no, and yes.
In 2016, researchers from Bain & Company found that “Digital media is great for reaching a specific set of consumers with targeted messages quickly, efficiently and at a lower cost. But new Bain & Company research has determined that it is far less effective than traditional media in getting consumers to recall, that is, bring back to mind, an advertisement for a well-established fast-moving consumer goods product and may not be enough to increase their interest in purchasing the product.”
More recent research published in the International Journal of Research in Marketing in 2021 by Dutch and Belgian researchers also came away with skepticism about how well consumer product goods (CPG) companies could utilize online banner ads. The researchers concluded, “We find that for the average CPG brand, unlike TV (and, to some extent, print) advertising, display ads by themselves do not exert a significant impact on brand sales, in the short nor the long run. Moreover, we find that interdependencies between display ads on the one hand, and offline media on the other, are negative in as many instances as they are positive. It follows that even within a multi-media setting, display ads are not guaranteed to enhance sales for the typical CPG brand. This appears to confirm recent managerial concerns that investments in online ads for CPG are largely ineffective.”
Another method used to determine the effectiveness of advertising is by measuring the amount paid for brands during mergers and acquisitions. According to Aaron Sanborne in UNH Today, Scarlett Xiaotong Song of the University of New Hampshire published research explaining that, “businesses that spend more on traditional and online display advertising had greater brand asset recognition and valuation in mergers and acquisitions, while paid search had more of an impact on immediate sales.”
Now, big branded consumer goods companies could be forced to choose to spend their ad dollars on defending their brand recognition via mass media or on generating sales via online advertising. Alternatively, they could try to do both by increasing the amount of money they spend on ads, harming profitability.
For startup companies in the consumer goods space, the breakdown in the traditional media pipeline is an opportunity to disrupt. Agile companies have the chance to break into markets long dominated by behemoths.
Whether upstarts break in and force a new balance in consumer goods, or the giants of consumer goods spend and acquire their way to maintain dominance, there’s no doubt that the paradigm has changed in advertising. People aren’t watching the same four channels or listening to the same Top 40 radio. The number of channels has gone from four to infinite in a few decades. The successful consumer products companies will be those that can keep up with that pace.