In a **dramatic shift** from traditional marketing practices, subscription brands are **reassessing their advertising strategies**. Driven by rising costs and diminishing returns, many are turning their backs on digital ads in favor of **innovative business models**. According to a recent industry study by Bango, 48% of subscription leaders have reported **declining effectiveness** from conventional methods of customer acquisition, including paid search and social media ads. Even more alarming, 53% contend that direct marketing has become **“unsustainable”** as customer acquisition costs soar.
The Data Speaks: Key Findings of the Study
- 88% of subscription brands anticipate a rise in direct acquisition costs by 2025, with nearly one-third expecting increases of over 25%.
- 80% of these brands are actively reducing their budget for at least one paid channel.
- 46% of industry leaders describe their direct marketing expenditures as a **“black hole”** for their finances.
- 53% believe that direct channels have ceased to be a viable path for **scalable growth**.
What’s Fueling This Shift?
Rising advertising costs, frequent algorithm updates, data privacy regulations, and subscriber fatigue are at the forefront of this transformation. Many brands have reached their limits when it comes to **profitably scaling one-to-one acquisitions**. As Anil Malhotra, CMO at Bango, aptly notes, “**Direct marketing used to serve as a reliable growth engine; now it’s a black hole.**” He emphasizes the urgency for brands to **rethink their market approaches** as return on investment dwindles.
Financial Reallocation: Where are Brands Investing Now?
Rather than intensifying their digital ad spend, many brands are redirecting their budgets toward **indirect acquisition strategies** such as bundling, partnerships, and aggregator platforms. The study highlights some notable trends:
- 82% of brands are planning to **increase investments** in indirect channels this year.
- 90% are currently bundling or planning to bundle offerings by 2025.
- 72% believe that indirect routes yield **higher quality subscribers** compared to direct channels.
Some of the fastest-growing channels are partnerships with telcos, banks, and device platforms, with over 27% of brands engaging in “**Super Bundling**” platforms like Verizon myPlan and myHome to attract new audiences without incurring hefty acquisition costs.
The Consumer Perspective: Changing Expectations
Recent **consumer data from Bango** reveals that a significant 62% of U.S. subscribers prefer to manage their multiple subscriptions through a **single bundle**, while 44% already enjoy at least one subscription for free as part of a packaged deal. Among younger audiences, the trend is even more pronounced, with **55% of 18–24-year-olds** receiving bundled subscriptions they previously paid for individually.
Giles Tongue, a subscription expert at Bango, reinforces this point: “We’re witnessing a **clear transition** from the subscription economy to the bundle economy. Consumers desire value, convenience, and flexibility. Brands that successfully package their offerings to align with consumer preferences will emerge victorious.”
Broader Implications: What Lies Ahead?
These findings hold critical implications not only for subscription brands but also for digital advertising stakeholders such as Google, Meta, and TikTok, whose revenues are heavily dependent on performance ad spending. Should subscription leaders set the tone for the market, we may be entering a new era—where **distribution partnerships** become the pivotal measure of success over mere ad impressions.
Bango predicts that this pivot towards indirect acquisition and bundling will foster a wave of commercial opportunities for its **Digital Vending Machine® (DVM™)** platform, which already powers many top Super Bundling platforms. As 90% of subscription leaders invest in bundling, the DVM is poised to capitalize on the industry’s broader embrace of indirect marketing strategies as we move into 2025 and beyond.
For a deeper dive into these findings, read the full report here: Gravity Shift: Subscribers, bundles, and the acquisition black hole.
