SUMMARY: According to Forrester “It’s harder to reach audiences, the cost of marketing is going up, the number of channels has exponentially proliferated and the cost to cover all of those channels has proliferated”. But are agencies and brands listening?
The advertising industry faces an “existential need for change,” according to a blunt report published by the research firm Forrester. Now the agencies must “disassemble what remains of their outmoded model” or risk “falling further into irrelevance,” the report concludes. Ya think?
Throwing more money at ads is just creating more noise. Some advertisers, like Unilever and Bayer, are pulling business away from agencies and handling some of the work internally. Last year, 78 percent of members of the Association of National Advertisers had an in-house agency, up from 58 percent in 2013 and 42 percent in 2008.
What’s it all about?
Well first let’s be honest. Consumers don’t hate ads, they hate ads that are irrelevant and too frequent. 83% of people agree with the statement “Not all ads are bad, but I want to filter out the really obnoxious ones. I mean how many ads with an emu do we need to see? The problem is not only agencies but marketers who refuse to do more relevant advertising and measure frequency. Programmatic ads are adding to the problem with AI that doesn’t take into account psychographics and relevance of ads to the audience.
Not all advertising is dead either. Despite the articles that say TV is dead TV ads lead the field when it comes to brand discovery, cited by 36% of respondents as the main way they find out about new products and services.
The Internet is not free
The use of ad blockers has been on the rise in recent years, fueled by web user frustration at the range of noisy, interruptive and deceptive promotions and offers which appear online.
According to research, around 30% of all internet users now use ad blockers, which can be problematic for businesses trying to reach their audiences, and tech platforms looking to demonstrate the value of their ad tools.
Use of Ad Blockers:
- 48% of users employing an ad blocker do so because they are getting served too many, or irrelevant ads, but one of the up-and-coming motivations for ad blockers is that they save the battery of a user’s device.
- The motivation behind using an ad blocker varies greatly between regions, with Latin America citing the sheer volume of ads as their motivation, while in the Middle-East/Africa the main concern is minimizing data use and battery drain.
- The heaviest users of ad blockers live in the Asia-Pacific region, with 40% of browsers using the technology monthly. North America comes in second, with 38%.
- Significantly more men use ad blockers, as well as internet browsers between the ages of 25 and 34.
What does all this mean?
1ne: Marketers need to really focus on frequency. The line between frequency and becoming an annoyance is blurred.
2wo: Ads need to be micro-targeted with relevant content.
3hree: Don’t give up on TV. It’s still the number one channel for new product introduction.
4our: Your agency needs to get more involved but you also need to hold them more accountable for key metrics.
5ive: Bringing advertising in-house may be a good solution for some but company politics can get in the way of developing and executing better advertising.