Are consumers deriving less value from offline than online media? And, if so, what does this mean for the future of marketing? Boston Consulting Group (BCG) recently considered this topic and concludes that the future of media is digital and belongs to media companies if they can figure out how to successfully monetize their business models.
These days, the typical U.S. consumer spends only $165 for online media but the perceived value of this media is $1,132, generating a surplus of $967. On the other hand, consumers pay an average of $696 for offline media, get a perceived value of $1,600 and a surplus of only $904.
Currently, about 44% of all media consumption takes place online and before long this number will reach 50%. As the shift to digital continues, analysts say that consumers will assign decreasing amounts of value to offline media.
This change will take place because higher quality content is now easier to find online. Because of that, consumers are giving up the mindset that everything online should be free. Already, people are showing their willingness to pay for online newspaper and magazine subscriptions. They are also asking and paying for on-demand TV viewing.
As the online media ecosystem grows and Big Data becomes a reality, consumers will be able to tap into customized content and advertisers should be able to deliver customized promotions. BCG analysts say that marketers and media companies shouldn’t be overly concerned about regulatory problems regarding privacy. They note that each media revolution has disrupted the marketplace. Today’s consumers are as eager to participate in the new forms of entertainment as they were back in 1690 when the first newspaper was published in Boston.[Source: Follow the Surplus. Boston Consulting Group. Bcg.com. Feb. 2013. Web. 18 Feb. 2013]