Consumers have been blocking ads ever since they could turn a page in a newspaper or change channel using a television remote control.
Yet it is the rise in the use of ad blocking technology on digital devices which is making marketers nervous and prompting some careful analysis of how they should allocate their advertising budget during 2016.
According to PageFair, which measures the impact of ad blocking, the estimated cost to publishers was nearly $22bn during 2015. There are now around 198m active ad block users around the world, with the trend in the UK growing by 82 per cent in 12 months to reach 12m active users.
Publishers are fighting back in different ways. Financial newspaper City AM is trialling banning readers from its website if they use ad blockers, pointing out the commercial implications for its business.
Despite the rise in the use of ad blocking technology there is no evidence it will stop brands from advertising this year, but marketers will look more closely at where they spend their money.
Director of communications at the Advertising Association, Ian Barber, cites the AA/Warc Expenditure forecast figures that predict total ad spend will grow by 5.8 per cent this year and break the £20bn mark. “Traditional channels like TV and out of home (OOH) should perform strongly and internet spend will again break double figures with a forecast of 12.5 per cent growth for 2016,” he says.
Use TV to reach a mass audience
TV will remain popular for advertisers that need to reach mass audiences. The total weekly reach of TV for adults was 95% in December, says marketing body Thinkbox, with commercial telly’s share of linear viewing at 66.3%.
Advertisers must be smarter when producing and delivering content online or offline this year. It will mean more investment in artificial intelligence to reach the most receptive consumers, and increased use of video content and strong images to help brands with their storytelling.
The trend towards moment marketing around key TV shows, news, sporting and weather events to get digital cut-through should accelerate this year. This will mean a boost in revenue for leading social media outlets such as Facebook, Twitter and Instagram.
Use social media messaging apps for advertising
Brands will continue to improve personalisation and make more use social media messaging apps. Products such as Facebook Messenger and WhatsApp will be used to send relevant offers to consumers to avoid the ab blockers.
Personalised advertising will also stretch increasingly into the home via smart devices and the wider adoption of the Internet of Things.
Highly targeted email marketing can boost sales
There could also be more targeted email marketing this year.
Exeter-based The Gro Company manufactures sleep products for young children and uses cloud-based software from supplier Bronto to take a data-led approach to email marketing. This enables the brand to segment its audience and ensure content is relevant and engaging as children move from being babies to toddlers.
Its Seven Days of Christmas email marketing campaign helped online sales for December increase by 57 per cent year on year, according to group ecommerce manager Edward Scott-Finnigan. The company will also book press advertising in parenting magazines to build trust among parents.
It is relevancy, a respect for privacy and a better understanding of each brand’s target audience that will create trust for advertisers and ensure consumers remain receptive to a brand’s message, wherever they see it.
Advertising must at least appear to be less intrusive, so expect more investment in augmented reality and virtual reality advertising in 2016.
Creative direct mail can be used to combat ‘digital fatigue’
Offline, direct mail will also be popular this year because it sidesteps the digital fatigue many people feel.
Rachel Aldighieri, managing director at the Direct Marketing Association (DMA), says consumers will only want to block ads if they perceive the messaging as irrelevant. She adds that marketers must therefore ensure they do not put too much emphasis on technology at the expense of the creative.
Life insurer Sun Life is combining content marketing and direct mail this year as it attempts to make advertising and marketing more entertaining and move budget away from online advertising in 2016.
“We have ‘the best answer to someone’s question’ on our website and are adding value with free tools such as our interactive savings calculator and our new ‘perfect send-off’ service that lets people record their wishes for their funeral,” says head of brand Ian Atkinson. “We also create entertaining videos, like our recent pet insurance videos, which our audience can engage with by commenting on them and sharing.”
Atkinson says direct mail remains the most valuable channel for cross- and up-selling to existing customers and the brand mails about 14m packs a year.
“There’s also the haptic consideration. Mailings are tactile and give recipients an opportunity to play with the medium,” he says. “We can also include physical items which make the message more engaging or which give customers some value, such as when we included SunLife-branded trolley tokens in a mail campaign.”
Using OOH can encourage people to use connected devices
The digital OOH market will also be doing its best to woo advertisers this year, especially those keen to reach smart phone users. There is likely to be an increased budget for Bluetooth beacon technology, for instance.
“With OOH you cannot fast-forward or swipe an ad away, so technology is enhancing this medium which is a part of society and not intrusive,” says Alan Brydon, the CEO of trade body Outsmart. “We are showing advertisers how OOH encourages the use of connected devices.”
Carlton Daniel, media and advertising partner at legal firm Squire Patton Boggs, says the debate this year will be less about moving from online to direct mail, OOH, TV, radio or press, and more about how advertisers combine their use of different media by making the most of their data.
“For example, the use of location-based data to enrich OOH advertising, and the use of TV data to determine what individuals watch and when they do so to more effectively target consumers with specific ads,” he says. “The programmatic advertising idea is thus enriched and the online world is combined with the ‘real’ world for targeting specific audiences.”
Long-term think to combat ad blocking
One trend media owners would like to see this year is a more long-term approach from advertisers. They believe the short-termism and demand for a quick return has caused the current clutter which is encouraging ad blocking.
For example, Tim Gentry, global revenue director at Guardian News & Media, says the ad industry must start thinking about building long-term relationships with his readers.
“Part of the solution is offering fewer adverts of higher quality that appear in trusted environments,” he says. “If the industry can collectively adopt this mind-set we can avoid a technical arms race to weave our way around ad blockers which benefits no one.”