SXSW Mobile Saturday Recap: Economic Realities — Ad Blocking & Consumer Control
Published on 5 Apr 2016
Our fifth and final panel recap from SXSW Mobile Saturday shares key takeaways and themes so you can maximize your learning, whether you were there or not. If you haven’t already, be sure to check out our other four recaps!
Let’s face it — the landscape of advertising has changed radically over the past two decades. New channels have emerged and gained momentum, but what has the customer benefit been? Have advertisers, marketers, brands and publishers used new tactics, technology and thinking to provide unique opportunities to customers? How are consumers taking matters into their own hands? What does this all mean for media brands?
Our panelists from our last Mobile Saturday Panel, “Economic Realities: Ad Blocking and Consumer Control” explored these questions and more in perhaps the liveliest discussion of the day.
Ad Blockers: The Result of Subpar Advertising
Moderator Arlie Sisson, vice president of emerging products at Condé Nast, opened up the panel by sharing how media companies’ have had to rethink their revenue models as consumption has shifted away from printed, subscription-based content, to free, online content. This change has challenged media companies to rethink their monetization strategies in order to survive. The solution? A renewed focus on advertisements to drive revenue.
However, as advertisements increased in both size and volume to bolster revenue, consumers grew wary and ad blockers have taken off — leading to $22 Billion in lost revenue in 2015. So how can advertisers, media companies and consumers all win?
Sisson discussed consumers’ resistance to advertisements today and that their biggest complaints involve advertisements slowing down their page or feed, serving as an impediment to the experience. The Mobile Saturday alumna said users are essentially trained to ignore advertisements at this point, as they are “blind to banners — [they] see a sponsored post on Instagram and glide right by it.”
Garrett MacDonald, executive vice president of Kochava, thinks the barrier to entry for creating an advertisement is low. “Spray and pray isn’t a great approach,” he said, adding that technology missteps are partly to blame for these cheap, untargeted advertisements. Instead, brands should strive to look at ROI based on specific, targeted campaigns and measure eyeballs versus engagement. “Tap-through rate is becoming a huge thing,” Sisson said.
Shoe-Stepping Ads Cause Consumers to Question Privacy
Perhaps the best soundbite of the panel was from POSSIBLE Managing Director Kunal Muzumdar’s “shoe-stepping” advertisements anecdote. Described as “inanimate objects following [people] around on the internet,” shoe-stepping ads appear all over sites that a user frequents. Essentially re-targeting ads gone terribly wrong, the ads appear everywhere a user visits, to the point that people start to feel concerned about what personal information companies are tracking in their system.
Muzumdar contended the feeling may partially be generational. “Privacy will change generationally all the time” he said, noting that younger users, like “14, 15 year-olds are probably more comfortable” giving companies access to more personal information. However, he believes brands have yet to figure out how to effectively leverage data to create magic moments.
Like Apps, Advertiser-Generated Content Must Provide Utility
The panel agreed typical advertising is no longer effective — advertisers and content producers need to reinvent the experience. Ads can no longer simply highlight things brands would like to promote and sell. To succeed, brands must put themselves in the mind of the consumer and explore how to meet their needs.
“We generally don’t complain about use of advertisements if it has utility,” said Montclair State University’s Merrill Brown. The director of the School of Communication and Media shared a personal example of good advertising from an experience browsing flights on Kayak, but not purchasing. Some time later, he was served up an advertisement on a social network with an offer for discounted tickets. ”That actually helps me,” Brown said, noting brands could potentially increase the discount as time went on to make it even more compelling.
Improvement is a Shared Responsibility
Sisson closed the panel by asking panelists who was responsible for creating better advertisements. Muzumdar said “brands aren’t innocent bystanders,” and must view advertisements as a way to “add to the environment, share value and be interesting.” This, he said, will change the way brands view their work, write copy and more.
For brands like Condé Nast, there’s a guttural re-scope of what they’re trying to accomplish. “We used to build products for advertisers,” Sisson said. “Now, our goal is how are we building products for our users,” emphasizing the “consumer is always in control.”
Brown, however, feels the responsibility to create better advertisements falls beyond brands, advertisers and agencies: “the responsibility to create better advertisements is on everyone” — including consumers.
Key Takeaways from Mobile Saturday
Enjoyed our recaps? Be sure to check out our 15 Key Insights from Mobile Saturday at SXSW 2016 to gain observations, learnings and more from our all-star panelists.