Commentary

Fewer, More Relevant Ads

by Dave Morgan , Featured Contributor, July 26, 2018

It's hard to imagine a media future that doesn’t involve the delivery of fewer, more relevant ads.

However, that’s not what’s happening at the moment. Ad loads are up on TV. Both satellite and terrestrial radio have increased their ad loads.

And the explosion in connected digital screens — in people’s hands, on their desks, in taxis, on gas station pumps, on the sides of buildings — means that many more ads are being shown to more people in more places than ever before.

In spite of that trend, I believe the explosion of ads will slow down and then actually reverse over the next five or so years. Here’s why:

Most ads people see are irrelevant, redundant or both. While I don’t like to make broad statements based on anecdotal evidence, it would be hard to argue with the statement that most of the ads we are presented with each day are selling a product or a value proposition that means nothing to us. If you have evidence to the contrary, please be sure to argue your case in the comments below.

More consumer control over ads. As more ads are delivered digitally to consumers on devices they control, and as the manufacturers of those devices continue to build in features that give consumers more control over the experience, consumers are blocking ads at an increasing rate. This trend will continue.

More ad-free media products. Media is becoming increasingly unbundled from distribution. Witness the growth of video-streaming services delivering content directly to consumers that used to be only available in a cable bundle, and being sold ad-free. Witness the growth of Netflix and Amazon Prime Video. Consumers seem to like watching TV shows without ads, and are willing to pay a premium to get that experience.

Ability to optimize most advertising. All advertising and media platforms are becoming smarter and more data-driven, even linear (old-fashioned) TV. These platforms are starting to replace mass-reach ads with ads that are either personalized, or mass customization, which means everyone won’t need to see or experience the same ads. These ads typically yield much better economics for media platforms, enabling them to reduce total ad loads to maintain or increase consumer engagement. This trend will continue.

Can we be certain that the future of media will involve fewer, more-relevant ads? Of course not. Many thought that office computerization would bring us “paperless offices.” They didn’t foresee the development of cheap laser printers.

What’s certain is that, in the next few years, we will all experience much change in how many ads we get and how relevant they are likely to be.

What do you think?

advertising, personalization

12 comments about "Fewer, More Relevant Ads".

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Ruth Barrett from EarthSayers.tv, July 26, 2018 at 4:42 p.m.
I don't own or drive a car. I don't need nor take any medications. So that takes up a big chunk of what is irrelevant to me. I don't buy beer and consume wine only now and then.
Another chunk. In the next few days I will buy a camping chair, food, vodka, ride share, and go to the chiropractor. Oh, and did I mention that I rent, not own, so all that grass, gutter, and insurance stuff - entertaining maybe, but not relevant.
And the paperless office was never envisioned as a short term fix to tree loss. However, it's not too early to recognize it as prescient, if not slightly exagerrated. I haven't bought a printer in the last eight years and use my local fed ex office to print what I need.

I am commenting to add a sense of urgency to Mediapost readers to pay attention to and heed all the points you make.
Reply

Paula Lynn from Who Else Unlimited replied, July 26, 2018 at 5:09 p.m.

Ruth, you have just made a case for a 1984 look into your personal life to bombard you with ads for your life. Changing habits, etc., is gradual. And you may be an anomaly which gets back to a 1984 controll of what you dislike, too. Be careful what you wish for and does not get to the root of what Dave Morgan is asking.

Eric Fischer from HJA Strategic Consulting, July 26, 2018 at 7:15 p.m.

I don't envision less ads for a couple of reasons....

1) Simple numbers game - we add millions of people to this country every year. Not sure of how population trends match of with ad clutter, but more people = more need to reach those additional folks.

2) With all the choice people have, they are becoming less brand loyal. This leads to advertisers needing to stress the "recency" effect, and be everywhere all the time on the chance the last message the consumer sees is for that brand.

Ruth Barrett from EarthSayers.tv, July 27, 2018 at 2:29 a.m.

Paula, I cut the cord years ago. I only know about the ads because occasionally I visit folks who still watch TV and Cable. I spent years in direct marketing high tech, enterprise level technology and am an advanced user of database and targeting technology. Use is still a good foundation for brand loyalty and the relationship with customer will remain key to future growth. Talk to Facebook today. Maybe I misunderstood what you were commenting as I you referenced "my wishing" but I was not wishing, just making the point that the advice given of what to watch for was good.

Jim Meskauskas from Media Darwin, Inc., July 27, 2018 at 8:49 a.m.

Fewer ads will only happen if their relevance is accompanied by a commensurate increase in their price. Until the economics drives fewer, more relevant we won’t see fewer and more relevant. And relevance doesn’t solve for audience aversion and avoidance; the human being’s relationship with advertising vacillates somewhere between passive ennui and managed hostility. Finally, advertising in content is increasingly becoming a tax on the poor. People who can afford myriad OTT solutions and technology that enable ad avoidance are leaving the ecosystem for less cluttered pastures.

Dave Morgan from Simulmedia replied, July 27, 2018 at 8:58 a.m.

Very good points Eric. Interesting to think about the dynamic of not only ore ads per person but more persons requiring more ads.

Dave Morgan from Simulmedia replied, July 27, 2018 at 9 a.m.

Totally agree Jim. It only works if the value & price & yield of each ad goes up. Of course, that won't, on it's own, deal with the regressive tax issue trend relative to advertising overall, that those who can pay for unccluttered media environments will do so at an increasing rate. It is going be to a bigger and bigger issue in our industry I am sure.

Doc Searls from Customer Commons, July 28, 2018 at 1:34 p.m.

For branding purposes, the relevance that matters is the medium used, and even that might be meaningless to a given consumer. Example: pickup truck ads on a sportscast seen by urban car non-owners. But branding does work. Spend a lot on good media and creative and you've got a brand. The urban car-owner watching sportscasts knows the F-150 is "Ford tough."

If you want relevance to be personal, you're talking about direct marketing. You may call it, advertising, and it may look like advertising, but it really isn't. Key difference: brand advertising sponsors its media, and is aimed at whole populations. Direct marketing wants to get personal, and will aim at eyeballs wherever it can find them.

On branding, perhaps the best research source is "The Waste in Advertising is the Part That Works" (https://www.researchgate.net/publication/4733724_The_Waste_in_Advertising_Is_the_Part_That_Works), by E. Ann Hollier and Tim Ambler. From that link: "excesses in advertising work by signaling brand fitness. TV advertisements were evaluated online for perceived advertising expense, message, brand familiarity, quality, reliability, and likelihood of choosing. High perceived advertising expense enhances an advertisement s persuasiveness significantly, but largely indirectly, by strengthening perceptions of brand quality." A corollary might be "everything you can measure has value, but not everything you value can be measured."

Alas, because digital advertising can be both targeted and measured, the whole advertising business seems to have decided that ads perform only when they are targeted ("relevant," or "interest-based," they say) and measured. Yet it's no accident that the $trillion or more spent on adtech (tracking-based advertising that's really direct marketing) thus far hasn't produced a single brand known to the world.

The unanswered question is the one raised in The Problem With Targeting (https://www.dotcoma.it/2015/06/22/the-problem-with-targeting...), and pretty much everything Don Marti and Bof Hoffman (look them up) have been writing about as well: is it possible for online advertising to brand products the way offline print and broadcast media could, and still do?

I suspect the answer is no. But my mind is open on the matter.

Dave Morgan from Simulmedia replied, July 28, 2018 at 5:05 p.m.

Doc, Great point. Actually, I don't believe that an ad has to be personal or targeted to be relevant, particularly in a medium like TV where being too personal doesn't' at all fit the context of the viewing behavior typically associated with TV - lean-back, passive, very likely co-viewing. I believe that many ads for products ir services that we don't know or think that we want can be some of the most "relevant" ads. I do believe that a big part of advertising is informational. If we're not informed about these products, we'll never know about them. We won't be able to tell others about them. We won't have that memory when we run into one of them. I do believe that what many call "waste" in TV or other broad media are important and shouldn't be removed. I'm a bigt fan of Byron Sharp ("How Brands Grow") and subscriobe to the notion that brands can't grow talking to their existing customers. However, some ads can be much more relevant than others, just as some can be much more irrelevant. And, the massive, constant redundancy of many ad schedules today is almost always not helpful. In aggregate, I believe in the value of the share of voice that any group of advertisers is likely to be able to achieve with any person or group of consumers. With more limited ad loads, we'll have a better chance of insuring that the messages are noticed and maybe considered. If we don't, we might scare a lot of valuable consumers away form ad-suppoerted media and into much more closed media eco-systems, something that I don't think is good for anybody. Advertising is so important to paying for more independent news, information and entertainment and in keeping economies and societies more open. I don't think that it is an accident that totalitarianism and truly ad-supported media tend not to go together.

Nancy Batsell from Hubbard Broadcasting, Inc., July 30, 2018 at 5:38 p.m.

Dave,

What do I think? I think that all advertising is relevant, and none is irrelevant.

Focused ads which, in the short run, might return greater sales, ignore the importance of branding. The advertising which I see today on mass media might have no meaning at the time, but next week or next month or next year, it may.

In my opinion, focused advertising without accompanying mass media brand-building will, in the long run, have a negative effect on our economy.

SS Hubbard

Tom Cunniff from Tom Cunniff, July 30, 2018 at 6:46 p.m.

I've been on record for years now saying that the right formula in every medium is fewer, shorter, radically more expensive ads.

This isn't inevitable, of course. If marketers get it right, it's not too late to save advertising. If marketers get it wrong much longer, they'll permanently damage what was once a pretty effective tool.

Fewer, shorter, radically more expensive ads are better for consumers, better for marketers, and better for publishers -- and not coincidentally, would shrink the incentives and opportuniy for ad fraud.

The need for relevance, IMO, depends greatly on the individual brand strategy, situation, and tactical reason why a marketer is advertising. This doesn't mean relevance is unimportant; just that it is of variable importance. There are times as a marketer when it's just common sense to wave to a big demographic group and see who waves back. We don't always know as much about who's in the market right now as we pretend we do.

I believe when history looks back at this time period, it will note a huge missed signal. There was a moment at which consumer attention was plentiful and media was scarce. We are now well past the point when these have entirely flipped: media suffers rampant oversupply and consumer attention is now what's scarce.

By optimizing for cheap media rather than optimizing for maximizing scant consumer attention, marketers have been optimizing for the worst possible thing at the dumbest possible time.

Jim Meskauskas from Media Darwin, Inc. replied, July 30, 2018 at 7:08 p.m.

Relevance is indeed relative. If you are selling a portable X-ray machine, home office radiologists looking to set up shop is what you’re after. If you are McDonald’s, everyone with a mouth is your target. Relevance is just another consideration variable for targeting. The contest for attention, interest, and opportunity is what any marketer is after. Relevance really only addresses one of the legs of that tripod.