Subscription brands are pulling away from digital advertising. According to a report from Bango, 48 per cent of subscription leaders report diminishing returns from traditional direct acquisition methods like paid search and paid social media. A further 53 per cent warn that direct marketing is becoming “unsustainable” as customer acquisition costs spiral.

The report — titled Gravity Shift: Subscribers, bundles, and the acquisition black hole — captures responses from more than 200 senior executives at subscription-based businesses, spanning sectors from AI productivity apps to streaming services, retail and finance. It reveals a stark reality: the performance marketing model that powered subscription growth over the last decade is under serious strain.

“Direct marketing used to be a reliable engine for growth. Now it’s a black hole,” said Anil Malhotra, CMO at Bango. “When nearly half your industry says ROI is vanishing, alarm bells should be ringing. It’s time to rethink how subscriptions go to market.”

Key findings:

• 88 per cent of subscription brands expect direct acquisition costs to rise in 2025, with nearly one in three forecasting increases of over 25 per cent.
• 80 per cent are cutting back on at least one paid channel, including:

• • Paid search ads (33 per cent)
  • Display advertising (30 per cent)
  • Paid social ads (29 per cent)

• 46 per cent of leaders describe direct marketing spend as a black hole for their budgets.
• 53 per cent believe direct channels are no longer a sustainable path to growth.

What’s driving the pullback?

Executives cited rising ad costs, algorithm changes, data privacy limits, and subscriber fatigue as the most pressing challenges. Compounding this, many brands report hitting the ceiling on their ability to profitably scale one-to-one acquisition.

“Netflix spends nearly $3 billion a year on marketing. That’s simply not feasible for the rest of the market,” said Giles Tongue, subscription expert at Bango. “Most brands don’t have the scale to absorb that kind of spend, especially when the returns are eroding. Direct-to-consumer marketing is hitting diminishing returns, and leaders are now looking for smarter, more sustainable ways to grow.”

Where the money is going

Rather than doubling down, brands are reallocating budget toward indirect acquisition strategies, such as bundling, partnerships, and aggregator platforms. According to the report:

• 82 per cent of brands plan to increase investment in indirect channels this year.
• 90 per cent are already bundling — or plan to — in 2025.
• 72 per cent say indirect routes bring in higher quality subscribers than direct channels.

Among the fastest-growing channels: partnerships with telcos, banks, device platforms, and social media platforms. Over a quarter of brands (27 per cent) are joining ‘super bundling’ platforms like Verizon MyPlan and MyHome to reach new audiences without high upfront acquisition costs.

Bango’s recent consumer data also supports the shift: 62 per cent of US subscribers would prefer to manage multiple subscriptions through a single bundle, and 44 per cent already get at least one subscription free as part of a packaged deal. Among younger users, these numbers are even higher — 55 per cent of 18–24-year-olds now receive a bundled subscription they previously paid for directly.

Tongue added: “We’re seeing a clear shift from the subscription economy to the bundle economy. Consumers don’t want to manage ten separate subscriptions — they want value, convenience, and flexibility. The brands that win in this next phase will be the ones that package their offerings in ways that reflect how people actually want to buy.”

Implications beyond the subscription market

The findings come at a critical time for digital advertising giants like Google, Meta, and TikTok — whose earnings rely heavily on performance ad spend. If subscription leaders are a bellwether, Bango’s findings suggest we could be entering a post-performance marketing era, where distribution partnerships replace ad impressions as the metric that matters.

Other posts by :

1. France, Germany resists ESA plan for high-res satellites
2. Stream, stream, stream
3. Who wants EchoStar’s spectrum?
4. AST SpaceMobile confirms Ligado payment
5. Bank ups Rocket Lab value
6. Eutelsat “racing” to find extra cash
7. Starlink causes problems for United Airlines
8. Hanwha dumps Eutelsat OneWeb
9. Bank: “FCC fires shot across the bows at EchoStar”

Categories: Advertising, Articles, Markets, Premium, Research, Social Media

Tags: advertising, bamgo, netflix, tiktok