Advertisers have problems, and it’s their own fault
It’s a rough time for marketers in the digital age. Ad-blocking software has resulted in billions of dollars in lost revenue, leaving companies struggling to market themselves with radio and print media in steep decline. Even cable TV subscriptions are beginning to nosedive.
Consumers have always resisted advertising. Over 200 million numbers have been registered for the FTC’s do-not-call list to avoid telemarketers (which we’ll discuss later). People will prerecord television programs to skip commercials, and they’d rather listen to Pandora or their iPods than radio ads. People just hate ads.
Consumers also don’t trust advertising. This is especially true of millennials, where a study found that 84% neither like nor trust traditional advertisements.
So how can it be advertisers fault when people are inclined to dislike ads? Advertisers are responsible for driving Internet users to the point of insanity, and every “solution” they propose just makes the relationship worse.
In the early 2000s, Congress gave consumers protection from the dreaded telemarketers.
In 2003, the U.S. Federal Trade Commission (FTC) opened the National Do-Not-Call Registry to help limit the number of solicitation calls people received on their home phones. Today, U.S. Federal Communications Commission (FCC) regulations prohibit telemarketers from using automated dialers to call home phone and cell phone numbers without prior consent.
In June 2010, WIRED reported the do-not-call list surpassed 200 million numbers. While the telemarketing industry isn’t dead, the laws passed in 2003 and 2007 dealt a forceful blow.
People hated telemarketers. They were intrusive, obnoxious, and unwanted — and telemarketers had only themselves to blame. Unsolicited calls became commonplace and people had had enough.
Unfortunately, advertisers found new ways to harass people in the digital age.
It’s safe to say nobody looks back on the pop-up ad with any sort of fondness. Every major browser now blocks pop-ups by default, and the inventor of the pop-up has since issued a public apology for its creation.
Display ads are also under siege, with 2015 being a particularly brutal year. A report by PageFair found 198 million active ad blockers around the world, and estimated that ad blockers cost publishers nearly $22 billion in lost advertising revenue in 2015 alone. Another report by Reuters estimated 47% of all U.S. Internet users have ad blockers; and only 11% are paying for subscriptions to online news sites.
2015 also brought news that Apple would include ad-blocking capability built into Safari in iOS 9 . Following the announcement, a study by The New York Times found that sites with mobile ads loaded much quicker when users had ad blockers enabled. That same study also found that battery life on the iPhone improved significantly with ad-blocking software enabled.
The publishing industry, undoubtedly, has felt the squeeze. The editor-in-chief of Ars Technica made a public plea to users to reconsider blocking ads. He was both candid and blunt:
People talk about how annoying advertisments are, but I’ll tell you what: it’s a lot more annoying and frustrating to have to cut staff and cut benefits because a huge portion of readers block ads. Yet I’ve seen that happen at dozens of great sites over the last few years, Ars (Technica) included.
Some publishers, like Forbes and GQ, refuse to serve content to users running ad-blocking software. The editors at WIRED gave its readers a choice: turn off ad blockers, or subscribe to an ad-free version of the site.
Ad blocking is a growing problem for publishers and advertisers, especially as print media begins to disappear. However, ad blocking is another problem that advertisers created themselves. Jack Simpson at Econsultancy explains the problem perfectly. Readers have a breaking point; when you continuously bombard them with annoying ads and auto-play videos, they are going to find less intrusive ways of getting the news.
For consumers, ads are an inconvenience; they obscure and distract from the content you want to read. Ads also hamper site performance tremendously. Most sites run ads as render-blocking elements, meaning everything else on the page is prevented from loading until the ads have fully loaded. This becomes a problem when the ads are served from poor performing, third-party servers. (To learn more, see this post from WP Site Care explaining how poorly run ad networks affect load times for websites.)
One problem leads to another: the rise of ad blockers gives rise to native advertising (aka sponsored content).
Since most revenue comes from advertising, publishers face an uphill battle pleasing readers while also making money. Publishers needed an advertising solution that was immune to ad blockers. That solution was native advertising.
For a more humorous description of native advertising (and its pitfalls), John Oliver covered the topic on Last Week Tonight.
In simple terms, native advertising is content that is paid for by companies not affiliated with the news site or publication. The advertiser has editorial control over what goes into the article/video/etc. (Obviously the publication can choose not to run the article, but the advertiser creates the content itself.) Native advertising is meant to blend in with the rest of the content on that site. While the article must be clearly marked as sponsored or promoted content, it is much more camouflaged than a traditional ad.
So how does a native advertisement differ from an advertorial? WordStream has the best answer:
In order to be considered a true native advertisement, the content should align with the publication or site’s established editorial style and tone, and must also provide the kind of information that the publication’s audience typically expects.
These qualities are what make native advertisements difficult to spot, as they often blend in with the ‘organic’ content extremely well.
In response, both the Interactive Advertising Bureau (IAB) and the FTC issued guidelines for advertisers to help consumers from confusing paid content with editorial content. The IAB created guidelines with the goal of eliminating marketplace confusion by improving transparency, stating that “a reasonable consumer should be able to distinguish between what is a paid native advertising unit vs. what is publisher editorial content.” The FTC guidelines are more direct: what’s legal and what isn’t.
As expected, readers do not favor native ads. In a study by Contently, 62% of respondents said a news site loses credibility when it publishes native ads, and 48% have felt deceived upon realizing a piece of content was sponsored by a brand.
More bad news for publishers: Opera announced in March that it would become the first major browser to include native ad blocking. Opera said the decision was performance-driven, claiming it can provide “unmatched speed” versus ad-blocking extensions that users must install in other browsers.
While the times look bleak for publishers, it looks even worse for advertisers.
There may be a bit of sensationalism in that statement, but there has been a strong resistance to any form of advertising on the Internet. As mentioned, people loathe native ads. Display ads, according to Google, are more often unseen than seen even when a page is served. (This caused some companies to cease buying ads altogether until they could verify viewability rates.) There’s also the concern that a considerable number of impressions advertisers pay for is actually spam traffic. (And, even worse, allegations of fraudulent traffic from ad networks.)
In February, Google eliminated paid ads (AdWords) on the right-hand side of search result pages (SERPs), leading search marketers to believe vying for first-page ads would become a lot more expensive. (Although recent evidence suggests this isn’t true.)
The online advertising world keeps getting curveballs, and sometimes the landscape changes before marketers can adjust. However, it’s safe to say that most of what advertisers are doing isn’t working. Readers do not want to be annoyed into submission, and the Internet gives them plenty of options that print, radio, and television never provided. There are plenty of sites and blogs with free content and no ads, so readers can avoid your online ads if they want. That’s something unique to the Internet. There are no free TV channels with no commercials. There are no radio stations that don’t play ads. Advertisers will need to get creative if they want to succeed in the online world. And, for the first time, they’ll actually have to listen to what consumers want, rather than telling them.