The Golden Goose is Dying: How the Shift Away from Traditional Media Is Undermining Long-Term Business Success

The Current Landscape: A Shift Toward Digital and Programmatic

Advertising dollars are increasingly flowing toward data-driven digital platforms, walled gardens like Meta (Facebook, Instagram), Google, and TikTok, and emerging retail media networks such as those operated by Amazon, Walmart, and other major retailers. According to eMarketer, U.S. retail media ad spending is projected to reach almost $60 billion in 2024. Meanwhile, linear television, which once dominated media spending, is experiencing a continuing decline in ad revenue.

This shift is driven by several factors, including the allure of "so-called" precision targeting and the promise of measurable outcomes that digital and programmatic media offer. Marketers are drawn to the promise of reaching the right audience at the right time with the right message, all while optimizing cost efficiency. However, this focus on data and "cheap reach" overlooks the value of brand building and the role of high-quality content in creating lasting consumer relationships.

The Cost of Chasing Cheap Reach

The growing dependence on programmatic buying and data-driven media is a double-edged sword. While it offers the promise of efficiency, it also carries significant risks. Programmatic media is notorious for issues related to ad fraud, brand safety, and lack of transparency. According to a report by the Association of National Advertisers (ANA), ad fraud cost advertisers as much as $100 billion in 2023.

The relentless pursuit of cheap reach through programmatic and open-net spending often results in ads being placed in low-quality environments, which can dilute brand equity. As Bob Hoffman, author of BadMen: How Advertising Went from A Minor Annoyance to A Major Menace, argues, "The obsession with efficiency has led us to place ads in some of the least trustworthy, least engaging, and most fraudulent environments imaginable."

Retail Media: The New Kid on the Block

The rapid escalation of retail media spending is a case in point. Retail media networks, while traditionally offering proximity to the point of sale and access to valuable shopper data, remain largely unproven as a performance-based vehicle for media investments beyond traditional below-the-line sales promotion. These networks have expanded their business models by selling data to third parties and integrating shopper data into programmatic packages that have little if any measurable value. According to a study by McKinsey, while 70% of marketers plan to increase their retail media spending, only 23% believe that these investments currently drive significant business outcomes.

This over-reliance on untested and unproven media channels at the expense of established ones could be a costly mistake. As marketers continue to chase the latest trends, they risk neglecting the foundational elements of brand building and long-term growth.

The Decline of Broadcast and Cable Television: A Loss of Value

The shift away from traditional media is having a profound impact on the broadcast and cable television industry. Networks that once commanded premium ad rates due to their ability to deliver large, engaged audiences are now struggling to compete with digital platforms for ad dollars. According to the Video Advertising Bureau (VAB), ad spending on linear TV in the U.S. fell by 15% in 2023, with continuing declines in 2024 and expected in the coming years.

While networks have launched streaming platforms, they along with Netflix, Amazon, Apple and others have expanded the production of long-form video programming, the decline in overall linear video ad revenue will lead to an inevitable reduction in the production of high-quality entertainment branded content that have value for building marketing equity, which has historically been funded by broadcast and cable networks. As these networks lose financial resources, with sports the notable exception, the quality and diversity of content available to viewers are likely to diminish. This, in turn, will lead to a decline in viewership and further erosion of the value of traditional media. The recent decision by the NBA to shift rights from Warner Bros. Discovery's TNT to Amazon reflects this reality.

Expert Opinions: The Case for Investing in Quality Content

Many experts argue that the current trend of shifting budgets away from traditional media is short-sighted and ultimately detrimental to long-term business success. Byron Sharp, professor of marketing science and author of How Brands Grow, emphasizes the importance of reach and the role of mass media in brand building. "Brands grow by reaching all buyers of the category, and they do that best by advertising on mass media," says Sharp. "By shifting budgets away from television, marketers risk losing the broad reach and brand-building power that TV provides."

Similarly, Karen Nelson-Field, founder of Amplified Intelligence, highlights the importance of attention in advertising effectiveness. Her research shows that ads placed in high-quality content environments, such as network television, generate significantly higher levels of attention than those placed in digital and social media environments.

The Tao of Leadership: Insights from Jack Myers

In my upcoming book, The Tao of Leadership, I offer a compelling critique of the current state of the advertising industry. Drawing on Taoist principles, I argue that the relentless pursuit of short-term gains at the expense of long-term value creation is unsustainable. "In the age of AI and machine intelligence, we must balance innovation with stability, ensuring that we do not sacrifice the foundational elements of our industry in the pursuit of the next big thing," I write.

I also emphasize the importance of investing in high-quality content and the role of traditional media in fostering creativity and cultural engagement. "Television, both broadcast and cable, has been the bedrock of our shared cultural experience. By undermining its value, we risk losing not just an industry, but a vital part of our society."

A Call for Balance

The shift away from traditional media toward digital and programmatic channels is understandable, given the allure of data-driven decision-making and cost efficiency. However, as the saying goes, "you get what you pay for." By prioritizing cheap reach and unproven media channels, marketers risk undermining the long-term health of their brands and the broader media ecosystem.

It's time for advertisers to reconsider their strategies and recognize the value of investing in high-quality content and mass media. The path to sustainable success lies in balancing innovation with stability, ensuring that we do not sacrifice the golden goose in the pursuit of short-term gains.

Investing in the future of media means investing in the content, platforms, and channels that have proven their value over time. Only by doing so can we ensure that the advertising industry continues to thrive in the years to come.