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Web 2.0, Single Malts and Crystal Balls; What’s Next for Digital Advertising?

A thought leadership piece from Lolly Mason, Head of Media Partnerships EMEA, Celtra

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I was hit with a wave of nostalgia recently after stumbling across old documents about Web 2.0 and how it would affect the industry. Those of us that are ‘wizened’ enough to have been working in digital media over a decade ago will remember the inescapable buzz and endless conference sessions on Web 2.0 throughout the noughties. It was such a huge topic and for so many years (much like our more recent ‘year of mobile’) that some in the industry had tired of Web 2.0 before it had actually arrived. As it happens, the hype was warranted. Websites became interactive and participative for the first time; content became tailored to users; web pages became rich and aesthetic with animation and video. There was a new focus on usability. This was a real revolution in web design and technology. The old web by contrast – Web 1.0 – was characterized by static pages, pixelated images, text and occasional gif buttons. Sites were designed to be read and seen but not interacted with, and usability was not a consideration.

 

As someone who works in digital advertising, it’s been difficult not to notice the strangely high portion of modern day ads that have continued to sit firmly under the Web 1.0 definition over the past decade. Yes, there have been many beautifully designed and often highly customised exceptions, but it’s fair to say that while web design had its revolution, we didn’t have a fully fledged ad design revolution at the same time.

 

Instead, we were soon understandably swept off our feet by the wonders of emerging programmatic technology, access to ever-increasing data, and the arrival of mobile. The early tech limitations of ad exchanges and a highly fragmented mobile environment led to the humble gif banner becoming the ad of choice for the bulk of campaigns, closely followed by the addition of interruptive ads such as (often lengthy pre-roll) or poorly designed interstitials in effort to ensure views and clicks. In addition, the transparency of digital led to a fixation with what we then considered ‘performance’ – either an immediate sale, or more commonly a click – and were less concerned with brand perceptions from digital ads, or with providing a positive ad experience for users.

 

Until quite recently, if we spoke of ‘ad quality’ within digital advertising, this always described lack of fraud or the absence of inappropriate ad content. It didn’t refer to whether an ad was of a high standard in terms of quality of images, design, UX, whether the ad is compelling or polite…

 

But before the industry heads home to weep into a bottle of single malt, some significant factors suggest we’re heading towards a slow but seismic shift in our approach to digital advertising now, with a new and more creative era approaching.

 

Firstly, external pressures are proving to be a wonderful motivator. Standard banner ads are just not compelling to users anymore and display ad performance has been in a slow decline for decades. The first publicly displayed banner – promoting AT&T on HotWired – had a whopping CTR of 44%, compared with an average banner CTR in 2015 of 0.1%, with benchmarks getting as low as 0.01% for some display formats (according to DoubleClick benchmarks).

 

Ad blocking concerns are also playing their part. PageFair’s latest figures show global ad blocking software usage grew 44% year-on-year. Users site irritation over interruptive ads, annoying ad design, and irrelevant ads as key reasons for downloading ad blockers in a recent IAB study. The good news is that users are beginning to understand the trade-off – that advertising funds content, allowing them free access to quality sites – and 45% say they will be less likely to use blocking software if the ad experience improves.

 

Contrary to what many in the industry assume, most people don’t actually dislike all ads – they dislike bad ads. When ad quality is prioritised, people even appreciate ads. There are some lessons to be learnt here from other ad mediums. Advertising in the print edition of Vogue, for instance, has a 94% attention rate (according to a recent Vogue study), with users describing the ads as ‘genuine’, ‘trusted’, and ‘appealing’ – and in many cases as valuable as the content. The average cinema-goer will willingly watch trailers, arriving 19 minutes before film start time for an average of 20 to 25 minutes of advertising. When you break it down, these are basically examples of hi-spec advertising incorporating content that is highly relevant to the user base.

 

Another factor is that mobile is finally very obviously dominant in the digital space. During the sticky transition phase as traffic moved from desktop to mobile, it was easy for people to bury heads in the sand and focus creative efforts only on desktop while running old school banners as an after-thought on mobile. There was also a traditional snobbery around creativity in mobile, with other mediums seen as providing greater creative scope, and therefore being more enjoyable to work with.

 

Now, there’s a strong desire across the industry – both from advertisers and publishers - to explore all of the creative options that new mobile technology enables. At Celtra, we’ve seen a marked shift in interest from our clients away from traditional banners and towards new user-friendly formats. Conversations now centre around cross-screen ad types, enabling publishers to sell by format or creative concept, rather than by device. Dynamic creatives are popular, along with native / publisher specific ads, and especially scalable and user-friendly ‘scroller’ ads, such as Interscroller. A recent IAB study showed that 67% of users found scroller ads distinctive and that 65% of 18 – 35 year olds actually described the format as ‘enjoyable’. Outstream video is gaining momentum, presenting an eye-catching but more ‘polite’ option. Video is served within content so doesn’t hijack the user experience, and increasingly video assets are tailored for mobile - shorter, lighter, and slickly edited. As rich media display and video starts to blend, great video ad content becomes interactive and dynamic.

 

Importantly, within Programmatic advertising, there is a shift from open RTB towards ’premium programmatic’ - programmatic direct (automation of direct sales) and PMPs (private marketplaces), allowing greater flexibility and increased creativity. As programmatic technology evolves, creativity at scale becomes a reality.

 

I wonder if next decade, we’ll look back at the mid 2010s and see this as the start of an important period in the evolution digital advertising. I have no crystal ball but the signs are starting to look positive.

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