The Death of Advertising and the Future of Advertising

on October 5, 2015

The debate happening regarding ad blocking both at a desktop and mobile web browser level has been an important one with respect to the future of internet publishing. In reality, while the number of internet users who use an ad blocker will be relatively small, the debate signals a much larger dissatisfaction with the user experience people are confronted with when ads are intrusive, annoying, and offer little to no value. It is this fundamental point which will have to undergo a change if publishers want to add more value to their users, or risk the potential growth of ad blockers into more of the mainstream.

While I make the point the volume of people who will install an ad blocker is likely relatively low, you can argue those who will install one are actually a more desirable audience. For one, our research indicates the extremely valuable 18-35 yr old demographic ranks highest in our surveys of those who use an ad blocker. In the US particularly, 4 in 10 millennials admit to blocking internet advertising. Anyone in marketing will tell you this age bracket is highly sought after by marketers. In follow-up interviews I’ve had with this demographic, one of the driving motivations for use of an ad blocker is so they can block ads on YouTube. Watching videos on YouTube is a hefty part of millennials’ weekly activity and many indicated to me their desire to skip ads and get right to the video was centered on their feeling ads were a waste of time. They were going to YouTube to see a short video and did not feel a 5 or 15-second ad before a video was an efficient use of their time. I also asked millennials how they found out they could block ads on the web and the most common answer was from a friend. It seems ad blockers are going viral with many US millennials and it is unlikely this trend loses steam any time soon.

The other relevant point is it seems the heaviest consumers of news and the internet in general are losing patience with web ads. This again is an audience, due to the amount of time spent on the internet reading news, looking at reviews, and generally spending a great deal of time on the web, that are quite valuable to advertisers. This group seems to be increasingly vocal about their disdain for the negative impact and overall speed decline of many websites due to obtrusive advertising. The challenge for advertisers is not that the vast majority of internet users will use ad blockers. It is that their most valuable online audiences appear to be trending in that direction.

It seems inevitable at this point something needs to change. This hostility toward advertising by online audiences valuable to marketers has been a long time coming. Many research studies concluded many years ago that internet users were quickly conditioned to ignore ads that resided on the top or side of a website. Publishers and advertisers responded by adding ads to the middle of content or by having an add pop-up or take over a screen — intentionally disrupting the reader’s ability to consume the content. What we have learned is, while many consumers will tolerate this experience, the most valuable ones to advertisers will not. In either case, the advertiser loses.

Is Native Ads or Sponsored Content the Answer?

If we acknowledge the nature of ads on websites need to change, the question will then be how. The most common answer is native advertising or sponsored content. Native advertising is when an ad becomes embedded into the content itself. For example, a Buzzfeed article called “15 things 1980’s College Students Did that Would Baffle Kids Today” is an example of a native ad. The article is entertaining, relatable, and very similar to something you would see on Buzzfeed. It just happens to be posted by Intel who is, in this case, a brand publisher at Buzzfeed. At the end of the listicle (list article) is a short promotion from Intel about Intel products. Nothing obvious yet a subtle reminder of Intel and the products they make. Intel has associated themselves with a technology-related article. This type of native advertising works extremely well.

If you listen to talk radio, or any number of podcasts, you’ll often hear the show hosts read an advertisement, often sharing firsthand experience with the product — close to being an endorsement. This is another example of native advertising that works in an audio and video medium much more effectively than typical ad rolls or commercials.

Another example of native advertising is the creative way many television shows are working ads into their shows. This is going far beyond product placement. An example I think works well is in a favorite show of mine called Treehouse Masters. This show is about a guy who runs a custom treehouse-making business. The show chronicles treehouses he makes for clients. Because it caters to do-it-yourselfers, there are a number of practical and quality native ads embedded. One may be a particular type of wood or decking he uses and he explains the benefits of the products. Another example is when he does a particular fix of a roof and explains how making practical fixes to common roofing issues can help your roof last longer and limit the need to use your insurance. In this spot, someone from Allstate or Farmers Insurance may actually show up and help make the point about good practices in keeping insurance costs down.

In all these examples, the native ad is directly related to the content, is promoting a quality product (thus making endorsing it easier), and is clearly relevant to the type of audience the content attracted.

What TV, radio, and even a site like Buzzfeed do well is understand their audience. They have a pretty good idea of their demographic. Publishers who have good demographic data stand a better chance of getting high quality advertisers promoting high quality products. What native ads do is allow the marketing material to flow into the content in a relatable way. When I see native ads done right, I can see the benefits of the product and how I can or should use it.

There is a transition taking place. The current state of online ads is not sustainable for many publishers. Creativity is how the industry will pull through this. Not by interrupting reader’s online experience with generally useless ads. The first step is for the online ad networks and publishers selling ads to realize there is a problem. At the very least, the focus being given to ad blocking will help draw attention to the problem so we can all work on fixing it.