In economics, there is a long standing monetary principle called Gresham’s Law. Succinctly, it states that bad money drives out good. In other words, historically if there were two forms of a commodity in circulation that a government gives similar face value, the more valuable commodity would disappear.
There have been many examples throughout history. I even witnessed one as a youngster. American dimes, quarters, and half dollars were largely silver through 1964. The next year dimes and quarters were a mixture of nickel and copper and half dollars had only 40% silver until 1970 when silver disappeared from US coinage. What happened? Gresham’s Law kicked in with a vengeance. I vividly remember seeing people get a roll of quarters from the bank, opening it, taking out the pre-1964 (silver) coins and hoarding them. One gentlemen at the time shook his head and told me the nation was finished as we had replaced silver in our money with cupro-nickel slugs.
Relax, I am not going to call for an immediate return to gold and silver as our sole form of money. I tell the story as, to me, it seems, a version of Gresham’s law seems to be in play in the media business.
With the growth of dozens of new platforms, advertising clutter is at an all time high and, despite protests from practitioners, advertising effectiveness is at an all time low. There is so much low quality or debased advertising currency on thousands of sites, that the most valuable outlets are getting weaker. Couple that with huge increases in advertising avoidance and you can see why launching a brand is often more difficult than ever.
What do I think will happen as this trend continues? Call me crazy but I think we will revert to a 1950’s model of sponsorships. One of my earliest memories is seeing The Men From Texaco opening The Milton Berle Show and Dinah Shore singing “See the USA in Your Chevrolet.” Maybe soap operas will make a comeback in the sense that large personal care or household product companies will sponsor programs again but they will not be daytime dramas. There will be far fewer commercial messages but the sponsor will be clearly identified. Think of the intros to Masterpiece on PBS. Programming will likely be interrupted minimally but the sponsor will be well known to the viewers.
This also sets up well for established brands and large, deep pocketed companies. They can afford to keep reminding the consumer of who they are but still reach advertising shy millennials.
The other option would be to go toward a heavy pay TV model which is really what Netflix and Hulu Plus and others are providing right now.
What do you think? Is there a modified Gresham’s Law moving in to the media world?
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