Ad Blocking & Privacy Regulations Require A Massive Change In Digital Advertising.
For years, the advertising industry has abused consumers with intrusive ads and invasive tracking; consumers have had enough. They are taking back control by force through the use of ad blockers and by pressuring governments to regulate. If we, as an industry, want to survive this upheaval we must evolve to take the new level of consumer control into account. We must embrace the idea that consumers are willing to work with us, rather than just being another impression or eyeball. Permission-based and contextual experiences are the future of advertising and the future is here.
Consumers are rioting and nobody seems to care…
Little has been done to change and improve the advertising landscape from a consumer experience perspective. The response, as we all know, has been a major backlash from an estimated 1.7 billion consumers now using ad blockers and billions of dollars at stake.
The root cause of consumer dissatisfaction has become multi-faceted. The introduction of programmatic advertising led to a dramatic decline in advertising quality in pursuit of increasing revenues. Cookies and tracking disrupts, invades and causes distrust in consumer experiences, injecting unwanted ads at every opportunity while tracking and capturing as much consumer data as possible. Heightened consumer awareness and understanding of digital technology is now mainstream thanks to the high profile cases that are now regularly in the news. Last but not least, the capturing and selling of personal information without consumer permission is considered intolerable driving consumers to use any tools and measures available to protect their privacy to eliminate intrusive advertising, tracking and other nefarious things. And more importantly, driving Governments to step in and take action.
Advertisers no longer have a choice
Fast forward to today. The surge in the use of ad blockers continues to erode advertising revenues and the ability for advertisers to connect with a large part of their target audiences. The capture and misuse of personal data has resulted in such an outcry that regulators have stepped in. In Europe, GDPR was implemented in May of last year and companies are still confused and struggling to understand what they need to do to conform to this legislation. In April 2018 following the Facebook debacle, Congressional hearings on data privacy resulted in a new privacy bill, the CONSENT Act being introduced. Facebook continues to operate in such an opaque manner that not only are federal laws being contemplated, but individual states are taking notice. California being the first, will be implementing The California Consumer Privacy Act, in January 2020 establishing new, groundbreaking consumer privacy rights; America’s own version of GDPR.
Two years ago, I predicted that unless there is a paradigm shift in the use of Ad Tech/Mar Tech and the vicious cycle it has created, there was a real danger that the free internet, which has been largely supported by advertising dollars, would itself be threatened. Today, the writing is on the wall for programmatic advertising. It was first reported in an article by Jessica Davies in Digiday, entitled GDPR mayhem; Programmatic ad buying plummets in Europe. Since the early hours of May 25, 2018, she highlighted that “ad exchanges have seen European ad demand volumes plummet between 25 and 40 percent in some cases, according to sources. Ad tech vendors scrambled to inform clients that they predict steep drops in demand coming through their platforms from Google. Some U.S. publishers have halted all programmatic ads on their European sites”. Other sites and technology vendors have closed up and moved out of the EU. This was only the start. This year it was reported on The Drum that many of the top advertisers were moving significant ad spend from programmatic to direct digital placements. The consolidation is already happening and/or ad tech vendors are simply vanishing.
Where do we go from here…
I have long held the belief that any resolution of these issues demands the conscious realization that consumers are truly in control. Instead of blatantly bypassing consumer choice to block ads, and capturing, abusing and misusing consumer data without their consent, publishers and brands need to offer permission-based engagements that offer relevant, contextual advertising experiences. Furthermore, with the regulatory backlash, advertisers and publishers must also give consumer choices within their digital experiences that choke off the indiscriminate capture of personal data without their permission. Simultaneously addressing these needs changes the whole market dynamic.
You don’t have another two years to get this right. If the industry doesn’t act, we are on track to return to 1996, before AdTech and programmatic; the time before ad servers were conceived. The choice is stark.