Consumers – The forgotten part of The Advertising Value-Chain

Digital advertising just isn’t relevant to 21st Century consumers. At best they ignore it.

Digital advertising just isn’t relevant to 21st Century consumers. At best they ignore it. At worst they abhor it.

Advertising used to be applauded, admired. People came to adore brands because of advertising, with the Mad Men celebrated as defining the cultural zeitgeist with every new campaign. Now they’ve come to despise it, and by extension, the brands that create them and the publishers that push them.

Why? Because it’s not relevant. Not relevant to their interests and their impulses. Not relevant to their changing digital behaviors. Because of this they’ve learned to tune them out, skip them or, increasingly, block them completely.

Users, and user engagement, are the currency of the digital advertising world. If they’re not viewing, or engaging, brands see less ROI and media companies see less revenue.  This presents a serious problem for the digital content economy.

From tune-out to active disengagement

The conversation used to be about banner blindness, about users passively tuning out advertising that existed at the periphery of their vision. Now it’s got to the stage where consumers are actively installing software that blocks advertising.

PageFair and Adobe recently released a report that showed a growth of more than 50% in internet users who had ad-blocking software installed over the last year. When they boiled the numbers down by demographics, they realized that in the highly sought after 18-29 age category, 41% of American internet users were using such software.

A sustainable digital economy can only come from a true value exchange between all relevant parties. But that virtuous cycle of a sustainable digital economy isn’t being realized. Instead we have quite the opposite, a vicious cycle characterised not by mutual benefit, but by an ever decreasing rate of return for everyone involved.

Advertising is not being delivered to consumers in the right way, rather than supporting the context of whatever experience they’re having and adding value, it inevitably jarrs. This triggers the decline in engagement that has become so apparent over the last few years, and reduces the amount advertisers are willing to pay for ad impressions. Dwindling revenues lead to publishers and content creators making up the shortfall by turning what was content real-estate into ad units. Cue consumers becoming even more disillusioned and the cycle continuing.

Extending the contract

The issue we have is that the problem is not being tackled in its entirety. As advertising technology vendors we are striving to give advertisers better ways to target consumers and improve campaign effectiveness, while working with supply-side partners to provide new or improved revenue opportunities. What we as an industry don’t do well is communicate to consumers why advertising is important.

There’s an entire cohort of internet users – typically the millenials that most frequently block ads – who have grown up with free, instant access to the world’s knowledge and opinions. That content is largely paid for by advertising, just as social media networks like Facebook or Twitter are able to be kept free-to-use.

Sean Blanchfield of PageFair, rightly comments that some education of users is going to be necessary.

“The thing about advertising is that the end user isn’t part of that contract; the contract is between the publisher and the advertiser. The end user who installs Adblock really isn’t mindful of the fact that they’re impacting the revenue of the publisher.” The Guardian

This education is important, but it’s not a one-way conversation, where poorly constructed advertising experiences are forced on users. If the advertising contract is to be extended, there needs to be an open, inclusive conversation about what exactly constitutes relevant advertising for digital audiences in 2014, ‘15 and beyond.

Posted by simonholliday