The World According to Borrell

A 2013 Delphi Panel of experienced management in the media industry, anticipating media’s future in a study by Borrell, contributes to a future knowledge base that will have value in planning for what’s coming for media in the next decade and beyond.

In short, and expanded some in the continuing text, an overview of the results according to the year the panel says they will take place, is summarized as follows:

  • In 2018 it is 52% likely that real-time bidding will be responsible for half of all digital ad placements, and 61% likely that consumers will spend more on apps than they do on PC software
  • In six years, 2019, it is 48% likely that the first broadcast network will convert to a cable or cable-like entity, says the report
  • Seven years from today 2020, the panelists predict that it is 50% likely that major electronics retailers no longer stock desktop PCs
  • In 2021, the Panel anticipates that it is 49% likely that 50 million U.S. households will drop cable in favor of online TV services; 49% likely that newspapers in the top 20 U.S. metros will publish four days or less, and 49% likely that the U.S. Postal Service will declare bankruptcy
  • In nine years 2022, the panelists say that it is 45% likely that online political ad spending exceeds that spent for television
  • Ten years from today, in 2023, it is thought that it is 42% likely that mobile video ad spending exceeds that spent for broadcast TV

According to Borrell, these initial predictions become the first plot points of a map of the future that is to be built during 2013 to create a future knowledge base that will have real value in planning for what’s coming for media. The “Probability Map” will show respondents’ media expectations ranging from highly probable to unlikely within this decade and beyond.

Analysis of the answers to each of the postulates is provided by the Borrell staff, describing conditions precipitating the attitudes expressed.

Postulate: Real-time bidding accounts for half of all digital ads placed in the U.S.

Real-time bidding continues to grow in popularity and volume. It has proven the critics who warned it would drive down the price of online advertising wrong. Borrell’s current forecast calls for RTB to make up 18% of all digital ad placements by 2017, a somewhat more conservative forecast than that given by the panel. The panel’s central forecast indicates that members are slightly more certain than Borrell or others that no legislation will block the rapid growth of RTB.

Postulate: Major electronics retailers no longer stock desktop PCs.

PC sales have dropped more than 30% this year, though IDC expects the decline to moderate as the year progresses. Other computing devices, more mobile and easy to use, have consistently outsold desktop PCs for more than a year. Borrell’s current forecast points to a more rapid decline in sales than IDC has published, indicated by the flow of digital ad spending away from desktops to mobile devices. By 2018, the report predicts that the majority of all digital ads will be directed to mobile devices.

Postulate: Consumers spend more on mobile apps than they do on PC software.

The certainty of the panel concerning this statement is obvious from its naysayers, says the summary; only 5% don’t think it will occur. A strong majority thinks it will happen within the next five years. A growing corps of developers keeps the app population fresh and growing, just like the software industry of the ‘80’s, when the PC and PC-DOS first hit the streets. Previous statements have defined the flow of device purchase, away from desktop computers toward mobile devices like tablets and smart phones. As this flow continues, demand for more prosaic, work-related apps will grow.

Postulate: Mobile video ad spending exceeds that spent for broadcast TV.

According to the panel, there’s less than average probability that upfronts will be largely digital affairs by the next decade. However, younger people have shifted some of their attention away from TV toward their mobile devices. Proctor and Gamble and Budweiser have begun shifting their marketing away from TV toward mobile and social venues. Detroit looks to be following suit, cutting offline new car ad budgets in favor of those same arenas.

Now, potential car buyers come to the showroom already certain of the car and accessories they want as well as the price they need. More often than not, the salesperson has little to do but fill out forms and hand over the keys. Similar trends are changing purchase patterns in real estate, home goods, apparel, and travel.

Postulate: 50 million U.S. households drop cable in favor of AppleTV, Hulu, and other online TV services, up from the current level of five million.

Only 4% separates those panelists who think the statement is impossible from those who believe it is certain to occur. If it were to happen, by the beginning of the next decade the broadcast TV network structure, and the cable network structure as well, would become history. The viewing trends of younger people is important here, says the report. Will binge viewing behavior patterns persist, or will these viewers settle down to more scheduled routines as they age? The panel’s view is that they will.

Postulate: All metro newspapers in the 20 largest markets reduce public distribution to four days a week or less.

The number of panelists who think the statement is likely to occur is almost exactly matched by those who do not. Next to people, says the analysis, a newspaper’s biggest expense is paper. The big dailies have already cut staff drastically during the last decade, and reducing paper consumption produces big savings almost immediately. In an age where daily readership continues to dwindle and younger people look to the Web or their smart phones instead of news stands for their information, stopping the presses on historically low readership days seems like a reasonable concept.  

Postulate: The U.S. Postal Service declares bankruptcy.

Panelists are almost evenly split on the future fate of the Postal Service.  However, the panel’s majority thinks it will take at least five more years before the postman stops coming by, if it happens. Part of the Postal Service problem is simply disruptive technology. Email and the social sites have long since replaced “snail mail” as the nation’s preferred means of communication.

The only increase in mail during the past decade has come from advertisers, and yet the USPS continues to give the direct mailers deep discounts. This insures their business but does nothing to contain a hemorrhaging cash flow. The future for U.S. mail looks cloudy at best, says the report.

Postulate: Online political ad spending exceeds that spent on television.

Digital ad spending during the 2012 U.S. elections comprised less than one dollar out of every 25 spent in all 13,000 contests. In both election cycles, as in every cycle since 1960, says the report, the bulk of ad spending has gone to broadcast TV. According to the panel, the 2020 presidential race as well as the 2022 congressional runs will remain much like they are today in terms of media use.

For more information about this ongoing project by Kip Cassino, please contact Borrell here.




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