The state of digital advertising right now

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I’ve been having a pop at digital advertising recently.

About how ad blocking is the fault of all of us that create online advertising.

No one really took me to task over this. And so I thought I’d go a step further.

And see what happens.

These ten statements represent what I think about the state of digital advertising, right now. As ever these  are strong opinions lightly held. Please set me straight if you think any or all of them are bullshit.

1. The digital inventory is an ecosystem driven by what’s possible not what’s acceptable. It’s the sub-prime lending division of the advertising industry.

2. If digital advertising is to survive it needs to change the way it behaves. Either that or we need a massive re-education programme about the role of advertising in supporting and paying for free content.

3. Too much creative effort is being spent making up for the deficiencies of digital advertising rather than actually communicating. This ludicrous state of affairs is most notable in tragic efforts to overcoming skipping.

4. There is and should be no innate relationship between amount of time spent in a particular medium and the division of the ad budget. Budget should go to the places that work not the places in which people simply spend time.

5. The fact that many purchase journeys take place entirely or substantially online is a challenge more than an opportunity. It’s entirely possible that people are less accessible for advertisers online than they are offline.

6. Advertising’s primary job is to drive brand optimisation, so that brands are already favoured by consumers by the time the online purchase journey takes place. If you wait until someone starts the journey you have already lost.

7. Search and retargeting need to understand that past behaviour is no guarantee of what people will do in the future. Misplaced assumptions damage brands by making them look foolish at best and scary at worst.

8. Our digital efforts should be focused on improving user experiences of our owned media rather than interrupting and ruining other brands’ user experiences. We need to create more seemless on and offline user experiences.

9. Search is still the most powerful tool for brands online. It’s now a hideously expensive line in the budget but it’s a natural consumer behaviour and businesses are often the point of the search rather than an unwelcome intrusion.

10. Social has a powerful role for brands especially in customer service but in advertising terms we have to accept it’s a now paid for media. Indeed, outside PR the era of earned media is over to all intents and purposes.

What do you reckon?

 

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11 Replies to “The state of digital advertising right now”

  1. I think much of what you say makes sense, but I found the enclosed link interesting- ad blocking doesn’t yet appear to be a big problem.http://www.niemanlab.org/2015/12/the-mobile-ad-blocking-apocalypse-hasnt-arrived-at-least-not-yet/

    That doesn’t mean we should ignore the issue, but I feel in the name of relevance , there’s a whole industry trying to make highly personalized contextual ads work. For all the reasons you suggest, this might be misguided, but while investors keep giving these cos money and most importantly, clients keep reporting that they’re seeing good metrics for performance, this will be hard to slow down.

  2. Lots of wisdom here, and agree with power of search and the need to build the power of owned channels, but I think there is a broader role for brands to play with search (and retargeting) that is not just about product and needs that are not just the rational buy-our-sh*t. People want and are seeking higher order direction (inspiration, adventure, purpose) that brands can provide in a more sustained way for the money they are spending. Social has devolved into paid, but some brands are doing an excellent job of building a content-based relationship either on their own or via places like YouTube. It’s GoPro’s whole business model, but other brands are doing it as well–Under Armour and Converse, Legos and Pampers. Not enough of the people making the ‘advertising’ see the role of what they make in the value to the business overall.

  3. I just recieved a comment via Facebook I thought worth adding to the thread here. It was a the perspective that UX tends to assume that the pesuasion job has been completed in its entirety by the time someone is on the site. And the result is UX is driven by generic best practice that makes all user experiences better but entrirely in the same way. Offline stores have commonalities that help you understand how to use them but are, at best, distinctive experiences. We need to make sure that there is room for brand distinctiveness in the user experience not just lack of friction.

  4. So much to say about this but I shall try and contain myself.
    There are some functionalities/opportunities that all advertising delivered by internets share but I think it would be more helpful to stop thinkinG about them all together. Email, social, VOD are much less like each other than they are like mail, PR and TV.
    As you say, search is a gem, albeit over-priced, but as long as attribution is intelligent and holistic, analysis will give credit to radio, OOH etc fairly. The trick is how to live without PPC. Strong, liked brands can do it. See the easyJet case study on http://www.thinkbox.tv
    Your point 5 may be the single most important aspect to consider. Generally people are more task-driven online and so impatient to get to where they are heading. This is as true of watching Downton Abbey as anything else. Much lower tolerance of pre-rolls in VOD (even quite good ones) than ad breaks in live TV where people have chosen to relax and ‘surrender’ to the ads. If the ads are a pleasure so much the better.
    I discovered that an alarming no of Marketing Directors have no control over the most offensive type of online retargeting ads, the stuff that stalks you. This includes some very prestigious retail and finance brands. This activity is controlled by the online trading teams who have no brand responsibility at all. They are trashing brands in pursuit of short-term sales. This could be stopped and needs to right now.
    All this is exacerbated by online media owners who only have an eye on the investor story for their IPO. So traffic and revenue at any price for the short-term with no thought for building something that will become profitable in the mid-term, by which time they’ll all be basking by their Californian pools.

  5. > 1. The digital inventory is an ecosystem driven by what’s possible not what’s acceptable. It’s the sub-prime lending division of the advertising industry.

    Agencies (brokers) are even driven by a similar bonus structure based on vanity metrics. Just look at what little progress is being done regarding ad fraud. No incentive to drive true performance if you can obfuscate the numbers long enough to get paid.

  6. Hi Richard, big fan of your blog. I regularly reference key articles like purpose, positioning and values.

    I’ve just transitioned from 8 years at creative agencies to a large digital agency. I’ve spent time this year trying to connect the dots and been questioning a number of my previous assumptions.

    Specifically, can a brand operate entirely in a modern way? Can a brand accomplish everything it must without heavy reliance on traditional advertising? Can a brand rely almost exclusively upon its products, service(s), experiences and interactions to be profitable and to grow?

    In most cases, I tend to answer no. However, in my search, I uncovered this piece of thinking from Zeus Jones (an agency based in the states). They have been focusing on infrastructure and the need for brands to own their infrastructure, rather than simply rent it (i.e. paid advertising on someone else’s media network). It’s a future facing piece, but really helped me think about the role of digital for modern brands.

    Have a read, would love to get your perspective:
    http://www.slideshare.net/AdrianHo1/infrastructure-for-modern-brands

  7. I completely agree with no.5 and have been thinking this for some time:

    “The fact that many purchase journeys take place entirely or substantially online is a challenge more than an opportunity. It’s entirely possible that people are less accessible for advertisers online than they are offline.”

    I think advertisements used to be more enjoyable when content was available at particular and finite moments in a day (picking up a newspaper or magazine, sitting down to watch TV, being exposed to Outdoor ads, etc). Now we have constant exposure to content and this has almost numbed our senses to how we appreciate content/information/ads (those pesky millenials in particular… guilty). Google making us dumber and all that.

    I think that the advertisers who accept this and realise they’re competing for some of the numerous fleeting micro-moments of attention in our day (e.g. as we scan through our phones/tablets/desktops) rather than convincing themselves that they can replicate the advertising experience and (sometimes zetigeisty! disclaimer: made up word) results from a (sadly) bygone era, will be the ones who will be the least dissatisfied with their digital advertising results.

  8. Great post Richard! Publishers and Ad Agencies have colluded to maximize their revenues by focusing on vanity metrics like impressions and clicks. When the entire industry is driven by this currency, it becomes easy to abuse in the name of revenue. Who suffers in the end? Brands, and most importantly Consumers. In classic game theory, Consumers get the shittiest end of the stick with poor experience. To reverse this, the currency of exchange has to change (CPM and CPC models are the root cause of ad fraud and blocking, so a CPA model changes everything and agencies would then focus their efforts on acquiring customers as opposed to eyeballs). Moreover, Consumers also need to be in greater control and have a bigger stake in the game. This is where I’m betting that gamification and rewards will be the new model and currency of Internet advertising. It works like magic on mobile games and should be applied to Desktop/Online as well!

  9. I think consumers are empowered and in charge in this new digital age, so that implies they are not irritated, inconvenienced and infuriated by digital advertising.

    PS my TV and radio are digital. Do they count in this debate?

    PPS Otherwise agree violently

  10. I would give a thumbs-up to most of them – plus some very useful comments. I have a particular bee in my bonnet about past behaviour not only being ‘no guarantee’ of what people will do in the future, but a generally poor indicator in a lot of cases.

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