Back in the 1960s Howard Luck Gossage of the legendary San Francisco advertising agency Freeman Mander & Gossage wrote: “Nobody reads advertising. People read what interests them. And sometimes it’s an ad.”
He was right. We don’t much care for advertising but because it has funded much of the media that we consume we’ve tended to suck it up. Even though global ad expenditure is bigger than ever, advertising is under growing pressure and here’s why.
To start with, we are over-messaged. Everywhere we go we are being spammed, re-targeted and interrupted by advertising messages. And it’s not pleasant. Which is why we are increasingly ignoring ads. It’s quite remarkable how much the first world has tuned out of advertising.
Starting with television, live TV viewership in the US has crashed by up to 30 percent. It’s even eight percent down in the UK. Viewers are choosing to watch recordings or streams at times of their choosing. They’re also tuning out of live TV because they want to be able to skip through ads.
Thales Teixeira from Harvard Business School found that attention for TV ads has also decreased. From almost 100 percent of TV ads being viewed between 1988 and 1991, this figure had shrunk to around 20 percent in 2012.
In the online world, eye-tracking studies reveal how blind we’ve become to banner ads. We don’t even look at them. Reuters Institute Digital News Report 2015 points out that 30 percent of respondents in both the US and the UK say they will actively avoid websites where banners interfere with the content too much. As one respondent--Helena, 36, from the UK--put it: “Pop ups irritate me the most. I don’t like video adverts, but I can live with them because I never willingly listen to them. Banner advertising doesn’t really bother me because I just ignore it”.
We’re not acting on ads either--even if we see them. Back in 2002 you could expect an average Click Through Rate (CTR) of around 2.4 percent. In 2015 it’s more like 0.2 percent. Google currently suggest a minimum of one percent CTR for search and 0.05 percent CTR for display ads in order not to effect advertisers’ quality score. That’s a pretty sad indictment of baseline ad performance. According to Solve Media, you’re 475 times more likely to survive a plane crash than click on a banner ad.
To make matters worse for advertisers, a recent report from Adobe and PageFair revealed that there are now 198m people across the world who are actively using ad-blocking software. They reckon this is costing publishers nearly $22bn. In the UK, 39 percent have installed ad-blocking software on their computer, mobile or tablet. The number rises to 47 percent in the US. But if you look to a younger demographic, the 18-24 year olds who are the next generation of consumers, 55 percent of them are using ad-blockers in both regions.
And this is just the tip of the iceberg because 93 percent of consumers have indicated that they are considering using ad blocking software in the future. And they will. Because ad blocking is getting easier.
Adblocking on Safari for OS X used to rely on a technology called onBeforeLoad, which interrupted loading documents before determining how to handle them. Systems like AdBlock Plus, probably the most popular ad blocking extension in the world, then applied around 50,000 complicated, RAM hungry rules to exclude ads.
This process was too demanding for mobile. It eroded performance and battery life. And to make matters worse, the ad blockers would know every page you go to and everything you do when you get there.
So Apple introduced content blocking Safari extensions. These can programmatically determine what content can be shown on a website. Better still the solution offers huge performance advantages and absolute privacy. It was such a step change improvement that it’s already replaced the existing onBeforeLoad system on OSX.
Apple has not announced mobile ad blocking but its freshest iOS (9) offers architecture that makes it very easy for developers to write ad-blocking apps. And several have already topped the sales charts in the App Store.
Lack Of Trust
Even if we actually see adverts and we read or watch them, we simply don’t trust them. Peer group recommendation is simply much more effective than advertising. A staggering 92 percent of consumers trust word-of-mouth over advertising. Of course, the challenge is to get recommended in the first place.
As a result, brands are building more and more programmes that invite consumers to create brand-centric content on their behalf. Great user experience generates great advocates, and fanning the flames of positive testimonials is what social media is great at.
But while social shares of brand videos continue to increase, this is being driven by the massive volume of videos rather than an increase in shares per individual video. Average brand video share rate (shares as a percentage of views) has declined from 2.5 percent in 2011 to one percent in 2015, which clearly indicates a decline in the quality of content. If you then add in comScore’s poor viewability stats--namely as few as 42 percent of online ads are in-view--then the picture for video advertising isn’t that great either.
Metrics, Not Creativity
As advertising has become much easier to measure, the whole industry has become much more focused on metrics than creativity. This explains the rise of the listicle and clickbait. It also explains those irritating video interstitials and why you are being retargeted. But these ingenious schemes to make advertising more ‘effective’ are starting to backfire. The Unruly Future Video Survey determined 63 percent of viewers ‘find it creepy’ when ads follow them around the internet and 61 percent are either annoyed by being forced to watch ads or worse, they are being put off the brand that served the ad up in the first place.
The final blade shaving ad performance is the rise of click fraud. As global ad inventory explodes, more unscrupulous companies are trying to monetise it. Click fraud is growing because it’s easier to do and it’s harder to control. It’s not coming from the publishers and their affiliates. It’s coming from the affiliates of the affiliates who are making money creating fraudulent traffic in the certain knowledge that they will never be detected, let alone punished.
Advertising came from another era. The era of Don Draper. The era where mass media was king. That era is, sadly, over.
So what do we do post-advertising?