There’s a whole new way for advertisers to reach consumersThe sea changes that are upending advertising
Marc Brodherson McKinsey Quarterly mckinsey.com 2-24
Advertising is an amazing industry. It’s worth about a trillion dollars globally, grows above GDP, and is either the primary business model or one of the fastest-growing ones for at least five of the top ten companies by global market cap. Advertising matters to traditional media companies and tech giants, big brands and small businesses, agencies and other ad services and tech providers, and now even to nonmedia consumer companies that are starting advertising businesses.
… seismic forces are reshaping advertising. By 2028, we believe that global retail and commerce media spending will be bigger than all of television and streaming advertising. This provides an unprecedented ability to do closed-loop advertising, where a company can say, “I know an ad appeared, and I know it did or did not lead to a purchase.” It’s super-targeted, highly performative media. It effectively collapses the marketing full funnel—from awareness to consideration to purchase—into a single step.
… We’re on the precipice of a huge shift, and companies are trying to make sense of it. The solution, obviously, is to try to get as much data as you can from willing customers to serve relevant ads. But that’s easy to say and hard to do, and there are major implications for consumer privacy in an environment where Big Tech companies are making changes to data collection, as well as more regulatory interest.