Ad-apocalypse! Ad blocking, its impact, and what comes next for Digital Advertising
Digital advertising opens a whole new world of opportunity for brands: a way to more precisely, and in exciting new ways, reach and engage with consumers. For ad platform sellers, it dramatically expands their advertising inventory and creates significant new sources of revenue. While both sides have only scratched the surface of digital advertising’s benefits, the flood of ads across mediums have started to scare consumers.
Once a novelty, digital advertising specifically pay per click (PPC) and search engine marketing (SEM) have taken the world by storm. According to a recent Accenture research, the share of a brand’s budget allocated to digital and mobile advertising is now equal to their budget for television—and far surpasses that for print. And the surge is far from over: Nearly all ad brands expect digital advertising to comprise more than 50 percent of their total marketing budget.
The Conversion Fallacy
As per New York Times article the use of Ad-Blocking Software has risen by 30% Worldwide.
Facebook has tried to ban it. Google has attempted to outsmart it.
But no matter what these tech giants do, consumer’s use of software to block digital advertising — often the lifeblood of a brand’s online business model and significant marketing investment and resources going down the drain affects overall ROI for digital advertising.
In total, roughly 30 % of internet users globally relied on ad blockers to avoid some form of digital advertising last year when surfing the web. That equates to more than 600 million devices, from smartphones to traditional computers. The figure to use ad blocking software is only expected to rise by atleast 30% year over year.
The widespread use of ad blocking is evidence that, tailored and meaningful ads are long overdue. Ad blocking is consumers’ response; it’s their way to say ‘enough’... enough of the barrage of unnecessary, unwanted, irrelevant messages. Brand’s not wired to be thinking about personalization will really struggle going forward. Re-targeting is not the answer; consumers move on too quickly. They want the right message, at the right time, on the right device, right now.
The effectiveness of digital ads is wildly oversold. A large-scale study of ads on eBay found that brand search ad effectiveness was overestimated by up to 4,100%. A similar analysis of Facebook ads threw up a number of 4,000%. While marketers are stuck with the Mad Men theory of showing an ad at least 7 times to a consumer to help with conversion, the access to digital advertising platforms for all brands makes it a junkyard of carpet bombed ads at the consumer. Every 4th or 5th post on Instagram if you notice is an ad. Every google search you do has a 80-100% chance of an ad to show up.
So with the ad apocalypse upon us how do brands navigate to organically grow using healthy digital advertising?
While obvious, consumers will have to find something of value in ads for them to be effective—and that means companies must know far more about consumers than simply their age and gender. Broadly speaking, offerings must be more holistic in relation
Brands need to find ways of relating on a more human level and that means creating things people want to engage with. For many, engagement will have to be tied to content. The future of advertising is all about data and content and figuring out a way to weave the brands message into a compelling piece of content in a way that gets the brand message across and at same time serves some consumer need.
Technology changes will center on three key areas: data and analytics, systems integration, and sales force automation. As per Accenture below is the progressive model for effective digital advertising implementation.
Addressing the biggest challenge is the quality and quantity of data as a major pitfall. Brands should tap into at least nine distinct data sources to gain insights into consumer preferences and behaviors that can be used to segment audiences. This fragmentation will help effectively aggregate data and ensuring data quality. A siloed organization and lack of analytical skills are key reasons why brands struggle to effectively see ROI’s for their digital advertising strategies.
Both brands and ad selling platforms need a 360-degree view of the customer to improve ROI and increase revenues. But they can’t get such a view because of widespread data proliferation. That’s where Big Data comes in. Read my next blog post on what big data is and how brands can navigate working with big data for understanding consumers better and improving processes to support overall brand transformation.
Sources and Excerpts
https://www.accenture.com/us-en/insights/blogs-index
https://www.nytimes.com/2017/01/31/technology/ad-blocking-internet.html
https://www.bluleadz.com/blog/10-of-the-biggest-marketing-fails-of-2017
https://blog.advids.co/20-great-digital-marketing-and-advertising-case-studies/