Everyone likes free stuff – and the Internet is full of it: tools to stay connected with the people you care about, a lifetime’s worth of news and entertainment, access to the sum of the world’s knowledge, and more. For consumers, tapping into this “stuff” is seamless and easy. For publishers and service providers, it’s equally easy to access this global audience.
Consumers want uncluttered, uninterrupted ad-free experiences. Interestingly, experience providers also prefer to focus on developing the type of beautiful experiences that please consumers.
The catch? Delivering these experiences and staying afloat financially is very difficult.
Most people never think about how expensive it is to run a business like Facebook. In 2016 alone Facebook spent $15.2B–up from $3.5B the previous year–to run its business and allow billion-plus consumers to continue using its social media platform for free.
Over the years, content producers have tried and tested various strategies for balancing free experiences with sustainable business growth, including sponsored content, native advertising, and even revenue sharing with retailers.
At the same time, users’ increasing desire for free content coupled with frustrations over intrusive and annoying ads pitted ad-funded content experiences against a stiff headwind in the form of ad blockers.
Although it stands to reason that advertisers are unable to fund free content when ads are blocked, consumers don’t always see this connection. This raises a key question that our industry has yet to answer: In a world of ad blockers, how are content producers expected to pay their staff and cover their operating costs?
At Facebook, for example, the company pays for almost all of this with advertising.
Replacing this advertising represents a steep challenge, even for a company like Facebook, especially when we consider that most consumers aren’t willing to pay for each app and website they use.
This explains recent developments, such as Facebook’s decision to block ad blockers and deliver ads to all users on its desktop site, and illustrates one potential path media companies can take to combat ad-related revenue loss.
Blocking ads, and blocking the ad blockers, are responses to a problem: the often intrusive, repetitive, and irrelevant nature of many ads. A recent Janrain & Harris Interactive report found that 74 percent of online consumers get frustrated when advertising content is not tailored to their interests.
Blockers have one inherent drawback — that they break the economics of the free experience, risking that we lose the experiences altogether.
A more balanced approach is to reduce user frustration by finding ways to improve ad experiences. To this end, Apple announced that its new operating system, High Sierra, will block autoplay video by default in an effort to strike a balance between allowing some advertising while removing the most annoying kinds of advertising.
There’s a great deal more that our industry can do here, including volunteering not to serve autoplay ads, making ads more relevant to consumers, providing greater transparency into ad decisioning, etc.
Some companies are pursuing the path of allowing those consumers that care enough to invest their time and effort in being more explicit about the ads they want to see–in other words, explicit personalization rather than ad blocking.
In reality, most of us don’t want to take the time to do this. Consumers want and expect marketing experiences that are as relevant as the content they choose to consume. Today, we can personalize passively via tech that infers consumers’ tastes and preferences and learns in real-time which ads are welcome when consumers “vote with their mouse” (or finger). Each consumer is not only unique, but there are also better and worse times for marketers to approach each of us with their messages during the course of our days–something that artificial intelligence can now help marketers to determine in order to make users’ ad experiences even more customized and seamlessly integrated into the content they consume.
The future of marketing lies in what I like to call “predictive marketing”- the ability to read and interpret signals to make smart predictions about where messages will land best for various consumers.
It’s clear that personalisation will have an incredible impact on the online environment and user experiences. With this in mind, however, the smartest publishers, media companies and app developers need to provide easy ways for consumers to give more detailed feedback on their habits, interests and preferences. Creating a large industry push around personalisation ultimately enhances the user experience, and simultaneously provides advertising experiences that are as seamless, tailored and relevant–a win for the entire ecosystem.
