Is Brand Loyalty Dead?
In the Madmen era, the marketing playbook was to use mass media, strong ads, and a powerful brand to add customers.
And if you did it right? A customer would be loyal for life, always showing a preference for your brand above all others. This brand loyalty was a recipe for increased customer lifetime value (CLV), as well as a massive boost to the market share and profits of consumer goods companies.
The New Ad Era
In today’s world, the playbook has changed.
In most situations, there are no longer two brands competing head-to-head on grocery shelves, battling it out to win the minds and hearts of consumers. Instead, customer transactions are increasingly digital – and it is there that things can be tracked, compared, analyzed, and personalized. As a result, a new competitive landscape has emerged where the concept of brand loyalty is under siege.
Today’s infographic comes to us from RaveReviews and it asks the question: is brand loyalty “dead”?
If brand loyalty is not dead, it may be on its last legs. Today, only 23% of people say they have a relationship with a brand – a percentage that has been shrinking for years.
With a connected world and so many options at our fingertips, sticking with a single brand probably seems like an antiquated concept to many consumers. After all, if one can buy the same product from a vendor with better reviews or for a lower price, then why not?
While some people may yearn for an era where they could trust the brand they loved through the thick and thin, a decreased reliance on brand loyalty creates other potential benefits for consumers:
It levels the playing field
Brands are no longer entrenched in their positions as market leaders, allowing new and upcoming competitors to also vie for the hearts and minds of consumers. This ultimately means better products and more experimentation, and less blind loyalty to the brands of the old guard.
It motivates brands to listen
Brands can use the power of big data to monitor consumer preferences, and to react accordingly. Further, with the emergence of social media, consumers can be heard – and brands can respond to these concerns directly.
It encourages healthy competition
Product quality is more important than gaining emotional affinity. As a result, substandard products will not last long on the shelves.
Charting Revenue: How The New York Times Makes Money
This graphic tracks the New York Times’ revenue streams over the past two decades, identifying its transition from advertising to subscription-reliant.
When it comes to quality and accessible content, whether it be entertainment or news, consumers are often willing to pay for it.
Similar to the the precedent set by the music industry, many news outlets have also been figuring out how to transition into a paid digital monetization model. Over the past decade or so, The New York Times (NY Times)—one of the world’s most iconic and widely read news organizations—has been transforming its revenue model to fit this trend.
This chart from creator Trendline uses annual reports from the The New York Times Company to visualize how this seemingly simple transition helped the organization adapt to the digital era.
The New York Times’ Revenue Transition
The NY Times has always been one of the world’s most-widely circulated papers. Before the launch of its digital subscription model, it earned half its revenue from print and online advertisements.
The rest of its income came in through circulation and other avenues including licensing, referrals, commercial printing, events, and so on. But after annual revenues dropped by more than $500 million from 2006 to 2010, something had to change.
|NY Revenue By Year||Print Circulation||Digital Subscription||Advertising||Other||Total|
In 2011, the NY Times launched its new digital subscription model and put some of its online articles behind a paywall. It bet that consumers would be willing to pay for quality content.
And while it faced a rocky start, with revenue through print circulation and advertising slowly dwindling and some consumers frustrated that once-available content was now paywalled, its income through digital subscriptions began to climb.
After digital subscription revenues first launched in 2011, they totaled to $47 million of revenue in their first year. By 2022 they had climbed to $979 million and accounted for 42% of total revenue.
Why Are Readers Paying for News?
More than half of U.S. adults subscribe to the news in some format. That (perhaps surprisingly) includes around four out of 10 adults under the age of 35.
One of the main reasons cited for this was the consistency of publications in covering a variety of news topics.
And given the NY Times’ popularity, it’s no surprise that it recently ranked as the most popular news subscription.
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