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How Did You Lose Your Audience?

Markus Reinmund

My wife and I have raised our four kids with an intentional focus on choices and consequences. Choice X leads to consequence Y. A clean formula that works especially well when you replace 'X' with any ways a child may choose to test parental boundaries. Argue with your sibling with too much force and you'll quickly find yourself in a time out in the corner of the room. Straight forward.

In the world of grown ups, similar lessons are taught and learned all the time but the delay between action and consequence can be much longer. Consider the following conversation in Ernest Hemingway's novel 'The Sun Also Rises':

"How did you go bankrupt?" Bill asked.
"Two ways," Mike said. "Gradually and then suddenly."

We see problems from a distance, but we prefer to believe they'll never arrive. Psychologists use the term 'availability heuristic' to describe our tendency to judge the probability of an event by how quickly and easily examples of that event come to mind. In other words, if we've seen it happen a lot, we'll believe it's more likely to happen again. We're basically inclined to expect things to continue the way they always have until 'suddenly' they don't.

This same dynamic can be observed in geopolitics where, for instance, the notion of cold war between Russia and the West seemed like a thing of the past - until suddenly on February 24, 2022 in Ukraine, it wasn't; or in housing markets where even seasoned investors expected home prices to only ever go up - until suddenly in March 2007, they didn't; or in U.S. consumer price changes which have been predictably benign for decades - until in 2021, everyone started talking about high inflation. We saw the warning signs for years and still, these events seemed to appear suddenly.

I'd suggest a similar dynamic is at play in the media industry where most companies today make their living serving advertisement-funded content to anonymous viewers (cable, broadcast, streaming, etc), readers (magazines, digital, online) or listeners (radio, podcasts). Do we as media executives know that the world is changing? Sure, but deep down we're inclined to expect things to continue the way they always have.

"How did you lose your audience?"
"Two ways. Gradually and then suddenly."

Companies like Amazon and Shopify have shown how powerful and valuable direct consumer relationships can be. Most media companies sense this value potential but continue to rely on advertisement as the main source of revenue - until suddenly, one day in the future, direct monetization of consumer relationships turns out to be the only source of revenue for content providers.

Engaging content, consumer insights and e-commerce will be key building blocks of that future. And Knocking was built to help media companies get there quickly.