Nearly half of subscription executives call direct marketing a ‘black hole,’ Bango survey

A new study from Bango found that nearly half of subscription-based businesses report diminishing returns from direct digital advertising, prompting a widespread shift toward indirect acquisition methods such as bundling and partnerships.

The study, “Gravity Shift: Subscribers, bundles, and the acquisition black hole,” surveyed 201 senior executives across sectors including streaming, finance, retail, and AI applications.

Forty-eight percent of respondents described their current investments in digital advertising, such as paid search and social media, as yielding diminishing returns, while 46% referred to direct marketing spend as a “black hole.”

Rising ad costs, increasing competition, privacy regulations, and subscriber fatigue were cited among the primary challenges. Eighty-eight percent of executives expect customer acquisition costs via direct channels to rise in 2025, with nearly one-third anticipating increases of more than 25%.

To counteract these trends, 80% of respondents said their companies are cutting spending on at least one direct channel. Paid search (33%), display advertising (30%), and paid social ads (29%) were the most common areas of reduction.

Instead, businesses are reallocating budgets toward indirect acquisition models.

Among the executives surveyed, 82% plan to increase investment in indirect strategies this year, and 77% said these methods are now a strategic priority. Bundling, in which services are offered as part of packages with banks, telecom providers, or retailers, is a key component, with 90% either already participating or planning to do so in 2025.

The report highlights the growing role of “Super Bundling” platforms like Verizon’s myPlan and myHome. Over a quarter of companies surveyed are engaging with these platforms to access broader audiences without the upfront costs of direct campaigns.

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Supporting this shift, consumer preferences are also changing. Sixty-two percent of U.S. subscribers surveyed by Bango prefer managing multiple subscriptions via a single bundle.

Among 18–24-year-olds, 55% said they now receive at least one bundled subscription that they previously paid for directly. The report suggests that the change in marketing approach could have broader implications for digital advertising firms.

With subscription brands moving away from performance-based ad models, traditional platforms reliant on ad revenue may face long-term impacts.

Bango’s Digital Vending Machine platform facilitates indirect acquisition by enabling subscription providers to bundle their offerings through established distribution partners. The platform supports services such as Netflix, Amazon Prime, and Disney+, and is currently used in major bundling initiatives like Verizon’s offerings.