The widespread use of ad blockers will force the digital advertising industry to adapt, as it transforms the ad-spam culture into a paid media system founded on high-quality, trustworthy and targeted ad content. This is BCG Digital Ventures managing director, Walter Delph’s key prediction for the coming year.
He said the relationship between the media industry and consumers had fractured, as the latter grew tired of the irrelevant ad barrage on their favourite web sites.
According to Delph, the rise of ad blockers would accelerate the demise of indiscriminate, unavailing digital ads as new technologies and services force inefficient and complacent systems to adapt.
He explained paid media was the media industry’s answer to dwindling readership, and the knowledge and information offshoot of the digital economy.
Furthermore, digital advertising was expected to challenge the high cost of print advertisements, increase ad exposure to a widening audience of Internet users and improve tracking — yet this has quickly soured in reality, Delph said.
Consumer annoyance is one thing, but ad functionality, visibility and fraud is something else entirely, he said.
“Thanks in part to the ad-spam culture, a huge portion of online advertisements are completely overlooked,” Delph said.
“There is a sinister presence in the digital advertising space, and it has set the stage for transformation.
“Companies have already recognised this sprawling consumer dissatisfaction and the deep flaws within the digital advertising industry, and responded with effective, impactful ad blockers.”
A loss of advertising and the publicity it provides brands has significant financial implications on the entire paid media system.
“If you are in the media industry, you will understand the panic about ad blockers,” Delph said.
In the same panic-plagued boat are marketing managers— accountable for growing brand awareness, customer acquisition and sales conversions within their allocated ad spend budgets.
With ad blocking growing in popularity — particularly with Apple joining the ad blocking movement with the Safari 6 AdBlock extension — strategies such as retargeting will become a fundamental component of every marketer’s toolkit to ensure audience relevancy with ads viewed by the right customer.
AdRoll managing director Ben Sharp weighed in on the debate. “Our view on ad-blocking is pretty simple: if people do not want to see ads, we do not want to waste our client’s money on them,” he said.
“We like to spend our client’s budget in the most efficient way possible, so we have no interest in showing ads to Internet users who have installed ad-blocking software.”
Retargeting is a tool that can be used across any marketing strategy and is naturally data-driven as it uses a brand’s data to perform, said Sharp.
“Retargeting relies on first-party data,” he said.
“Marketers are sitting on a treasure trove of intent data that can help them drive powerful retargeting campaigns.
“Web site data shows actions which translate into levels of intent.
“Understanding these levels of intent means they can be harnessed to show ads to the right person, with the right message, at the right time.”
Delph shares Sharp’s right-person, right-message, right-time strategy, saying the successful media organisations will work to re-establish trust with consumers, who will then willingly turn off their ad blockers to view rich content in exchange for limited, targeted advertisements.
Retargeting technology can perform across multiple platforms, with the ability to re-engage desktop visitors as they move to their mobile devices.
According to recent AdRoll research, Australians spent 42 per cent of their digital screen time on mobile last year.
With time devoted to mobile screens set to increase, device-to-device retargeting for mobile that brings consumers back to popular shopping apps and mobile-friendly sites may prove important in circumventing ad blockers across multiple browsers.
“We give our clients a holistic view of their customers’ behaviour on the journey to purchase via in-depth, device-type specific reporting through our dashboard,” Sharp said.
Understanding this consumer behaviour is vital in avoiding consumer annoyance, particularly in the case of the mobile phone — the most personalised consumer device today — where Delph said consumers’ expectations for better ad units have been underwhelming.
Sharp stressed the importance in working with clients on building a strategy that works directly with business goals so that the right customers are being approached at the right stage of the marketing funnel to get the best results.
“Marketers should consult with their account manager about the best performing channels for their vertical based on experience and ask for relevant case studies to get an idea of what results are achievable,” he said.
The rise of ad blockers and the evolution in paid media will be a cornerstone event for digital advertising in 2016; however, it is not a doomsday scenario, Delph said.
“In truth, the commercial advertising sector faced the same situation with the advent of the DVR.
“Media organisations and advertisers should recognise the opportunity for creativity and exploration offered by this shift.”
Delph predicts that over the next year, high-quality and trustworthy content will gain space in the digital advertising market.
The digital advertising industry will reinvent itself as advertisers adopt technologies that can serve ads to act-alike rather than look-alike consumers — thus dampening demand for ad blockers.
“Consumers do not mind advertising — they mind bad advertising that isn’t targeted to their needs and preferences,” Delph said.