Subscription-based brands are dramatically reshaping their growth strategies as traditional digital advertising loses its effectiveness. According to Bango’s “Gravity Shift” study, which surveyed over 200 senior executives, 48 percent now describe paid search and social campaigns as delivering diminishing returns, while 53 percent classify direct marketing as “unsustainable” amid spiraling customer acquisition costs.
A staggering 88 percent of brands anticipate further cost increases in 2025, with nearly one in three estimating a rise of more than 25 percent. In response, 80 percent of companies are already scaling back on at least one digital channel—33 percent on paid search, 30 percent on display, and 29 percent on social advertising. Nearly half of executives now concede their marketing budgets are being sucked into a “black hole.”
Rather than continue sinking funds into underperforming campaigns, brands are pivoting toward indirect acquisition models. Eighty-two percent plan to boost investment in channels such as bundling and partner platforms, while 90 percent say they are already bundling—either now or in 2025. Moreover, 72 percent report that subscribers acquired via these indirect routes are of higher quality compared to those gained through direct marketing.
Bundling partnerships now include telcos, banks, device platforms—even “super-bundling” initiatives like Verizon myPlan, with 27 percent of subscription companies participating. Consumer sentiment echoes the trend: 62 percent of U.S. subscribers would prefer managing multiple subscriptions through a single bundle, and 44 percent already receive at least one subscription via a bundle.
Executives, including Anil Malhotra, CMO at Bango, characterize direct marketing as a “black hole” and urge a strategic rethink. Giles Tongue of Bango points to Netflix’s enormous $3 billion annual marketing budget as evidence that most brands cannot afford such levels of spend, especially when returns are dwindling.
This shift aligns with the growing “bundle economy,” where scale and distribution partnerships eclipse traditional performance advertising. Bango’s Digital Vending Machine (DVM™) platform is primed to capitalize on the shift, already powering major bundling ecosystems like Verizon myPlan and supporting services from Netflix, Amazon Prime, and Disney+, giving subscription brands a streamlined route into indirect channels.
As digital acquisition becomes costlier and less effective, subscription brands are embracing bundling, partnership ecosystems, and indirect marketing channels. This strategic pivot represents both a defensive move against unsustainable ad costs and an offensive play to align with evolving consumer behaviors and industry realities.