The advertising world still does not know it is in trouble

Written by on February 22, 2016 in Opinion with 1 Comment

advertisingThe first piece of news out of Barcelona #MWC16 fed right into one of the most topical and divisive issues we currently face. Personalised advertising. A survey by Syniverse among 8,000 mobile phone users in eight major markets concludes that we do not trust brands, even big brands, with our data. While this may not surprise us, it reinforces our counterintuitive position that advertising is facing – at best – a very tough time.

There were a couple of assumptions about our industry that now need re-examining. One is that customers are willing to share their data in return for great services. This is flawed. So far, no-one has been able to properly personalise advertising anyway. And while they were busy trying, the early attempts have switched customers off the idea of personalised offers in exchange for data.

Worryingly, too, consumers no longer trust their CSP to do something about it. And trust, as we have said before, is a big asset for CSPs. Some are trying to block adverts themselves. Last year Digicel blocked adverts on its networks in the Caribbean. Denis O’Brien, the CEO, said that he did not see why the advertisers should get a free ride. Pay, he said, and we will serve your adverts.

This latest blow – or analysis of a blow – comes at a time when a perfect storm is brewing, which seems to be happening below the radar of the advertising industry.

Ad blocking software usage has more than doubled in the last year. Now, some put the number of downloads at over 400 million.

The advertising industry seems to be split over what to do about it. Some seem to think it is a good idea to follow customers into the apps themselves. Some believe that the way forward is backwards and are reverting to TV advertising. Where more and more people are watching content on catch up.

Publishers are panicking and trying to find ways of getting customers to switch off ad blocking software in return for a ‘better experience.’ Presumably this means that they are withholding content from those who use ad blockers.

Governments are now involved, and the EU, for example, is getting so wound up in the privacy and personal data debate that it looks likely that advertisers and publishers will not be able to use personal data at all.

Entrepreneurs are not slow to spot opportunities. Browsers – and software that makes your browser ad-free are appearing, like Brave and Redmorph. Some are even proposing that the blockchain could provide a solution. Tiny payments can be seamlessly authorised for reading or watching a page of content, without the adverts.

It seems not only that the accepted internet trade-off – data for adverts for content – is flawed. The problem is, what do publishers do? What they are doing so far is simply ‘slagging off’ the ad blockers. One Mr Rothenberg of the Interactive Advertising Bureau described ad blockers as an ‘unethical, immoral, mendacious coven of tech wannabies. It is nothing more than extortion.’ It is comforting to think that Mr Rothenberg is so open to debating the issue.

The point, Mr Rothenberg, is that customers are bored of bad and badly placed advertising blocking up their mobile devices, costing them data to watch and there is now a feeling that they are being abused.

The answer is to solve that problem before it is too late. If the problem remains, then even such Colossae as Google and Facebook will need to look hard at their business models, which depend on, oh yes, advertising. Their very survival is at stake.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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  1. Lorne Mitchell Lorne Mitchell says:

    Great article, Alex.
    Thanks for the insights.

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