The use of ad blocking software went up a whopping 30% in 2016. Their popularity, particularly among web-savvy millennials, has been on the rise for several years and shows no signs of slowing down. PageFair, a company that studies the digital landscape says in their 2017 Global Adblock Report that 11% of the global internet population (using 615 million global devices) are now actively blocking ads. Anyone who works in the digital advertising industry might be slightly alarmed by these numbers.
Many high profile web sites have begun to institute rather drastic measures to recoup lost advertising revenues. Visit Wired or the LA Times with an ad blocker enabled browser lately? You’ll be greeted with an ad block wall politely asking you to deactivate your ad blocker if you want to continue consuming content.
Looks like the free ride is over. The days of free-to-consume news appear to be coming to a close on the web. Newspapers, faced with declining print circulation, are moving more resources to their digital editions. Quality journalism cost money. The free access/ad supported model clearly isn’t sustainable in the face of growing ad blocker usage.
Partial paywalls like on The Globe & Mail provide free access to some articles while restricting access to ‘premium’ content with the aim of converting the casual readers into monthly paid subscribers.
But getting people to pay for news and infotainment online seems to be a slow uphill battle as evident when you consider 74% of ad block users say they leave websites with ad block walls.
Lately I seem to be spending more time accessing the mobile Web on my Android phone and less time through a conventional desktop browser. In fact, I’m not alone in this behaviour. Last week Google published a very telling infographic on their Mobile Ad Blog illustrating the rise of so-called multi-screen consumer behaviour. That is, people using more than one device (e.g. smartphone, laptop, tablet, TV) to accomplish a goal—be it: shopping, managing their finances, or planning a trip.
The statistics I found most interesting in this report: 38% of daily media interactions are on smartphones; 77% of “television viewers” watch TV on their smartphone or other device.
Shopping too, has become more digitally oriented involving multiple screens with smartphones and other readily connected devices making possible 81% of what Google refers to as “spur-of-the-moment shopping” or spontaneous goal-oriented searches.
With media consumption increasingly occurring through mobile devices it isn’t surprising to hear cable companies talk about the possibility of offering consumers pay-per-channel subscriptions. The current—and much loathed—television packages that typically force us into paying for channels we really don’t want (or watch) may soon be coming to an end, though perhaps too little too late a strategy for luring back disenchanted cord cutters.
While it’s easy to criticize the television industry for clinging to outdated models in light of the range and flexibility of viewing options available online, digital advertising too has its own fair share of hurdles lying ahead, particularly in the mobile space.
The push to monetize popular social networks like Facebook primarily through advertising revenues remains a questionable approach at best considering recent studies suggest 40% of mobile ad clicks are fraud or accidents.
Aside from the percentage of legitimate ad clicks versus those resulting from inadvertent actions (think fat fingers accidentally clicking or sliding across ads on a grimy touch screen—yes, I do it all the time too) the bigger question worth asking is whether or not ads really belong on social networks in the first place.
We don’t go onto Facebook or Twitter looking to research products or buy something new, instead we’re there interacting with friends and family, sharing Clint Eastwood invisible Obama jokes with others, and so on. As Diego Basch candidly points out, these sites shove ads in our faces and tempt us to buy shit we don’t need; “That’s the time-tested TV model. This entails annoying most people who are there simply for entertainment purposes.”
If I want annoying ads shoved in my face I’ll turn on the TV and watch a program on a channel I didn’t want included in my rinky-dink bundled package.
Image source: DorteF
This week General Motors announced plans to cease much of its paid advertising on Facebook but retain its various brand pages to “keep the dialogue going” and continue promoting its automotive products on the popular social networking site.
A GM spokesperson said, “paid ads on the site have [had] little impact on consumers’ car purchases”, suggesting GM’s social strategy on Facebook has failed to meet investor expectations.
This is an interesting revelation amidst the IPO frenzy this week, considering GM is one of the top U.S. advertisers in terms of ad spending, dolling out a mammoth $30 to $40 million alone to nurture its Facebook presence.
Regardless of whether GM is doing it wrong or not, or merely broadcasting instead of listening, one critical question being raised of late centers around the long-term viability of Facebook’s business model, which relies almost exclusively on paid advertising revenues.
The challenge for Facebook, particularly in the growing mobile space where people are typically less than receptive to ADs thwarting their small-ish screens, is in monetizing the more than 900 million users without significantly undermining the user experience to the point people feel compelled to leave.
Myspace quickly comes to mind as the poster child in this regard, illustrating the historically fickle nature of Web audiences and the staggering speed with which tech fortunes can rise and fall on the Net. Though Myspace never had 13% of the world’s population perusing their social network, so things could be very different this time around for Mark Zuckerberg and his talented team of 6 billionaires and 1000 millionaires.
But the question stands: Do Facebook Ads really work? And do ‘Likes’ and ‘Fans’ ultimately translate into product sales? Well perhaps not directly into car sales, but how about something a little smaller, like slices of pizza.
The story of Pizza Delicious out of New Orleans appearing on NPR this week is an interesting one because it paints a cautionary portrait of the challenges in running a successful Facebook advertising campaign. But don’t expect a mass exodus of advertisers just yet, Facebook is only 8-years old! Let’s give the platform time to mature.