There’s an interesting article in the Globe and Mail citing data from a recent working paper from the U.S. National Bureau of Economic Research (but for which, using Google, I cannot yet verify the original source document, though it may be this one at the NBER.)
Writer Barry McKenna says the study sought to assess “how much money it would take to give up various services” and then came up with their estimated values:
- Search engines: $17,530
- E-mail: $8,414
- Maps: $3,648
- Social media (Facebook): $322
Now I’m not sure why anyone would even think of offering (or accepting) $17,530 to “give up” Google, but the concept here is based on the question of whether a free advertiser-supported service can successfully convert to a paid subscription model.
The story in the newspaper industry is revealing, with indications that specialized information providers can receive high-yield subscriptions for valuable data (such as the continuing architectural, engineering and construction leads services), and truly first-rate journalism (think the New York Times, Wall Street Journal and, in Canada, The Globe and Mail.) And indeed I pay for online subscriptions to both the New York Times and Globe and Mail.
If McKenna’s assertions are correct, Facebook is on dangerous ground, especially if regulators put severe restrictions on its capacity to sell extremely targeted advertising based on personal user data. On the other hand, the data suggests my personal investment in Alphabet (Google) shares will prove to be a wise retirement income hedge against the decline of conventional advertising.
What does this mean for AEC marketers?? First, of course, the value any advertising service ultimately depends on its effectiveness. If you are achieving a marginal return on your advertising/marketing investment, you will continue. If the service itself is built on a truly valuable underlying function (ie, search, maps or email) then that business has the possibility of a second life if the advertising model ceases to be profitable.
The question is this: Is your business/marketing robust enough to have a “Plan B” — or fallback position when changes, especially technological) disrupt conventional practices. Think for now about Katerra and how it and similar online services may disrupt the entire building supply and delivery chain. Is your enterprise’s underlying value to clients great enough to live through the transition?