Advertising: evolution from old to the present and future

When you search on the internet using a search engine such as Google, Bing, Yandex, etc., the results page, along with search results, shows ads.

Out of the total 3 search results here in the picture, the first 2 results are ads displayed by Google and the third is the actual search result.

Ads are the sponsored content by advertisers that can be a company, a brand, or a person intending to promote their products or services to you. What you search, speaks of your plan to be on the internet and therefore such ad(s) are relevant and useful. However, when you begin using the app or browsing the websites, the experience starts to deteriorate because your screen is sprinkled with advertisements.

Here is a website sprinkled with advertisements.

In the best-case scenario, ads are inspired by your browsing history, your location (derived from the GPS or internet IP), and the limited information such as gender, age, etc. that the app/website sends to the advertisers. At worst (the normal case), ads are the result of advertisers’ carpet-bombing people with ads that are mostly irrelevant.

Ads are a nuisance that kills user experience and we don’t like them. Coincidentally ads generate money for the people who run the website/app. By the way in the advertising world, such people are called publishers. Therefore, advertising is a necessary evil to keep publishers funded and create content for us.

Over the years, ads have intruded much more than expected. To the extent that some apps/websites today do not have the complete editorial independence to choose what content to publish. Publishers sell space on the web page/app and the advertisers push ads to that space.

Here is an interstitial ad the full-page ad. Such ads are very common on news websites and the newspaper. They are extremely annoying yet are the most expensive ones and are the most in-demand!

To protect your interest of not being deceived by this “content and ad” cocktail, the international advertising bureau -IAB- and other advertising authorities mandate that a sensible person should be able to distinguish content on the internet from ads. Likewise, you can instinctively spot ads since they usually are strange, are unimportant and you have been seeing them over years now.

Today, greater than 90% of the YouTube Pre-roll ads, the ones that appear before a video starts, are skipped. Except for a few ads, most of the pre-roll ads are irritating and you just skip them. Globally, the ad click-through rate as per ComScore is less than 0.06%. That’s getting 600 clicks by showing 1 million ads to people on the internet. Furthermore, 50% of these 600 clicks are accidental clicks. Consequently, adblocker installs are increasing more than ever. As per a PageFair report, the adblocker installs grew at 41% CAGR in 2016. This enormous growth signals how irritated we are with advertisements. In other words, with years of irritation with ads, we have shut off the traditional world of advertising. We have rendered all of the old school advertising tactics irrelevant in today’s world.

The average person today with a smartphone looks at their phone 110 times a day. This mobile addiction of ours is another opportunity for new age advertising to take lead. The mobile ad spending worldwide was $100 billion in 2016, 150% more than the forecasted $40 billion. Smart advertisers understood that traditional marketing was becoming less effective by the minute, that mobile is a new medium to communicate with customers and that there has to be a better way. The advertising industry responded to this crisis by finding a new way to appeal to both us and the advertisers. They came up with native advertising to deliver native ads.

A native ad predicts the user experience based on your device mobile/tablet/desktop and the content type to find the advertisement that will best match the predicted user experience. It matches the format (look and feel) of the advertising to the app/website’s content. Resultantly, the ads are so cohesive with the content and immerse so well into the app design that you feel they belong right there. If you are a regular netizen, chances are that you have already been exposed to Native advertising.

Here is how a native ad looks. See, how smartly the feeds on Facebook, Twitter, Linkedin etc. have changed from your friends’ stories to the ads sponsored by brands!

So that Native advertising does not meet the same fate as the old-school internet advertising, the challenge for native advertising is to be relevant and to not disturb the user. Today, more apps have started adopting ‘feed’ format similar to the infinite scroll on Facebook’s timeline. Besides being simple and easy to use, the adoption of feed format design is inclined to bring more opportunities for an advertisement to show on mobile sites and apps. Native ads gel better into the feed format.

Everything said and done, one challenge that the Native ads still don’t address is that despite being outwardly engaging and visually appealing, they promote without being aware of the actual product. Native ads do not know how the product may match your preferences and thus usually promote stuff that is not relevant. Advertisers smartly infuse ads in the content using Native ads to promote the product with a very high chance of misleading you to believe that the content you are reading is promoting the product and not the brand. The trust that you have with the content/website is at stake here. Recollect how disappointed, tricked and cheated you felt to find that your favourite sports stars endorsed beverages they never consumed. It’s the same breach of trust the native advertising may do.

The advertising industry is at crossroads today. There are choices to be made by advertisers, publishers, and other stakeholders to be honest and relevant to you. Native advertising has solved the aesthetic challenge the old banner ads had but misses building up the trust with us. This gap invites innovations that you will see in the near future. Innovations that will solve this challenge and create new opportunities for the entire advertising ecosystem.

I foresee times when there will be no ads in your content and the advertisers will still be able to reach out to you effectively with their best products and offers. Technology today has created avenues where your preferences and choices can be effectively discovered and coordinated with the right offers for you. Whoever will be able to dig this gold mine will be able to create value in the advertising ecosystem. There will be personal online assistants that will dig the right content you wish to access and present it to you by removing ads. I’m avidly anticipating this evolution and will soon read and watch content online without being advertised stuff that doesn’t make my experience better or make a difference to me!!