What if we remove advertisements?

As always this is something I observe nowadays in every single business – Advertising is the new source of revenue.  To simplify, let’s divide businesses in different categories such as Retail, Online Media, Startups, TV Channels, Movies, Sports leagues, Blogs, Apps etc.

We will start with startups. Take Zomato, What is the revenue model of Zomato? Don’t be surprised, Zomato does free listing on their website or app. You must be thinking then how would they earn money? There it come ‘advertisement’. Zomato charges restaurants for listing them on their home page. Now, as they have started home delivery and table booking facility, they have started charging thousands to restaurant owners. Let’s move to another category ‘online media’, this includes all the social media sites, online news channels, YouTube, video sites etc. They all have one thing in common and i.e. advertisements. All of these platforms are earning just by putting ads on their platform and charging per second or per view to the advertisers. I recently did a certification course with Google partners where I learnt about Google Adwords . Google adwords is biggest revenue source of google from where they make different users to create ads which can be seen on google search pages, google sites, google partnered web sites, youtube etc. Facebook is also working on the same line where they charge you for every single advertisement and gives insights, reach and sales in return.

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Take Television industry, it is very complex to explain how it actually works but in nutshell, there are 4 main components, producer who produces show, channel who shows that show, cable or d2h provider delivers that channel to your home and last but not least is ‘us’ who watch these shows on TV. This whole industry works on advertisements. Producers pay for the time of the show to channel owners. Channel owners charge different advertisers or agencies to display their ads on in between breaks of TV series. Nowadays, d2h or cable service provider has started their own channels where they do local advertisements or display company’s sponsored shows on those channels. Movie industry is also doing the same since ‘Dreamgirl’ where Coke used in film advertising for the first time in Indian cinema. From then it has started and nowadays every movie has brand associations with movies. This has continued with recently boosted web series, you will find every single web series is associated with one or the other brand. This whole entertainment industry has boosted the overall spending on advertisements, promotions, brand building etc. recently.

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Move to the retail space now. You visit a small mom n pop shop or any super market, do you find new product launching boards? Special location for new product? Shelf decorations or promotion posters? Everything of that sort comes under advertisements or promotions where a company who is advertising its products pays to the retailer for shelf space or poster location etc. This continues with festivals as well. If you have read my earlier blog about ‘Ganpati Festival & Marketing platform’ you would understand the scale of it. Nowadays, these all sports premium leagues are all advertisement platforms only though they promote it under sports encouragement.

There are so many things where you will find advertisement is the only income source. What if we remove advertisements from the daily life? Will all the above mentioned business work? Start finding answer; it will be interesting for sure.

 

Happy Observations!

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