M&A Analysis: Waging A War Against Bad Advertisements
In February 2017, Google was in the news for the wrong reasons. After some advertisers in the UK found their ads placed next to extremist content on YouTube, many brands pulled out of advertising on the platform altogether, raising calls for brand safety. Facebook too had its share of issues with advertisers late last year after it admitted that its measurements were not reported correctly. These issues are affecting the growth in digital ad spend as brand owners are now asking for more accountability and transparency in the medium.
Says World Federation of Advertisers CEO Stephan Loerke, “We are alarmed by the level of customer frustration with online advertising. In the long term, this is putting at risk the quality of advertising’s reach to consumers and the effectiveness of the medium.”
Following these developments, industry body Coalition for Better Ads released Better Ads Standards in March 2017 for desktop and mobile web to improve the standards of advertising.
Adopting Better Standards
In June 2017, Google joined the Coalition for Better Ads and announced that new updates for its browser Chrome will filter out ads that do not follow the standards. This essentially means it will not allow ‘bad ads’ — that interrupt, distract or clutter — to load by 2018.
Sridhar Ramaswamy, senior vice-president, Ads and Commerce, Google, in an official blog post said, “Chrome has always focused on giving you the best possible experience browsing the web. For example, it prevents pop-ups in new tabs based on the fact that they are annoying. In dialogue with the Coalition and other industry groups, we plan to have Chrome stop showing ads (including those owned or served by Google) on websites that are not compliant with the Better Ads Standards starting in early 2018.”
During the same month, Apple also announced that it will not allow sites to track people’s online browsing or allow ads to follow them across sites. It will also disable the autoplay mode in video ads. Craig Federighi, senior vice-president of Software Engineering, Apple, says, “This is not about blocking ads. The web behaves as it always did. But your privacy is protected.”
Following their suit, Mozilla also recently announced that it would prevent third party tracking elements that affect user privacy. Says Barbara Bermes, product manager for Firefox Mobile at Mozilla, “Mozilla would like to build an Internet that respects users, puts them in control, and creates and maintains trust. Too many users have lost trust and lack meaningful controls over their digital lives. Content blockers offer a way to rebuild that trust by empowering users.”
Is Blocking The Best Way Forward?
Says Pablo Gomez, Regional Media Director, NASEAP, Kantar Millward Brown, “Ad blockers are a great issue for advertising industry, but we need to understand that consumers are actually sending us a clear message: we don’t want to see intrusive formats in advertising.”
Krishnan Menon, COO, Wunderman Asia-Pacific says, “While people are actively blocking ads, they are just as actively searching for and viewing content that interests them. This is a key learning for brands. They need to stop producing interruptions and instead become what consumers are interested in. ”
According to a survey by Google in 2016, 74 per cent of mobile users find ads that interrupt access to content (like pop ups) very annoying. Anna Chan, regional managing director of Amnet Asia, says, “While it may sound like the beginning of a downfall for the digital advertising industry as advertisers begin to wonder if their ads will reach anyone at all, I believe that this will only lead to greater experiences and in turn drive better results. An ad that annoys a user will be ineffective anyway, so even if we reach that particular person, we are unlikely to convert or even engage them.”
The research by Coalition for Better Ads show that 85 per cent of mobile users find anchor ads (that stick to the bottom of your screen) only just a little annoying or not annoying at all.
What It Means For Publishers & Ad-Tech Players?
Fifty per cent of users surveyed in the Coalition of Better Ads research say they would not revisit or recommend a page that had a pop up ad. Chan says, “Publishers who ignore the user experience are likely to be more affected especially if they are largely reliant on advertising for revenue rather than subscriptions. ”
Content is of utmost importance for a consumer, publishers should focus on it, says Manoj Mansukhani, MD, Wunderman International New Delhi. “Publishers and brands must find ways to be more relevant to the consumer in a way to engage with them rather than interrupt them,” he says.
According to Gomez, “Non-human traffic, viewability, brand safety, etc., are all serious issues. But all those metrics are just hygiene issues. The sooner we fix them, the sooner we will start talking about what really matters: how is the advertising affecting my brand and market performance? In other words, we can then move the conversation forward to how to make better creativity, how to build a brand, how to engage with consumers.”
