THE BLOG
14/11/2013 09:18 GMT | Updated 23/01/2014 18:58 GMT

What is the Future for Online Advertising?

The seismic shift in advertising from broadcast to online is well documented with, for example, the IAB, reporting a record spend of £3.04 billion in online advertising in the first half of 2013. But in the midst of the excited talk about online we are perhaps losing sight that at the end of this sits a human being. And I would argue that this simple fact questions much of the prevailing logic of online advertising and calls for an approach that better reflects core human values and needs.

Consumer reaction to online advertising

Once heralded as a revolution in advertising, online is seeing a consumer backlash. In a recent GfK / Guardian study we found 68% of UK online consumers find it creepy the way that brands currently use information held on them. A manifestation of this discomfort is our finding that 38% of consumers now use some form of ad blocking activity. Of course brands are increasingly looking for ways to circumvent the impact of ad blocking with ITV, for example warning those using adblocking software that it will be preventing them from watching content. But nevertheless the growing resistance of consumers to online advertising is a real concern.

Just how effective is online advertising anyway?

Of course, negative consumer reaction may simply be a transitory issue fixable in the medium to long term. But we are starting to see questions about the very efficacy of this advertising medium? A recent report by Tim Hwang and Adi Kamdar cite work suggests that web advertising is much more effective for older consumers whilst little evidence is found for its impact amoung a younger demographic. They argue that as demographics shift over time then the overall effectiveness of online advertising will fall. The report also suggests that the growing supply of online advertising may also work against itself, so as the number of ads increase, the ability to cut through becomes increasingly problematic.

And a recent IPA study made recommendations which fly in the face of the increasingly accepted wisdom that one-to-one advertising is the most effective channel for brands. Instead, it suggested that advertisers should target the whole market through traditional channels of TV and print rather than focus solely on social media and one-to-one marketing. This, according to the report, can be up to three times as effective.

All these findings certainly run counter to the received wisdom that we have found among marketers that online represents the future of advertising, a perception that is currently stoking an 'arms race' between brands to develop ever more precision tools to identify and target relevant groups of consumers.

The IPA report perhaps shows a more nuanced direction for advertising, one where TV and print are focusing on the more strategic needs of the brand and online is delivering the tactical sales focused end of the spectrum. Whilst the finding is not necessarily rocket science it is nevertheless a message which often seems to get lost in the frenzied enthusiasm associated with online.

So what next?

There appears to be a stronger case than ever to restate the case for brand advertising, creating a shared understanding of the fundamental human needs that the brand stands for. Because what happens to the brand in an online world where the consumer experience of the brand's advertising is different for each consumer? If the brand's health is not nurtured then does online advertising run the risk of running on empty?

But brand advertising is increasingly tough to sell into most businesses when set alongside the relentless logic of online. Why spend so much when you don't know if you are hitting the tight people at the right time and in the right place? With online there is a sense of control, manageable risk, more tangible expectation of ROI. But as we can see, online has its own challenges both in terms of consumer acceptance and its basic effectiveness.

So where are the good examples of brand advertising, the best practice that sets the standard for the industry? I and many others have been drawn to Coca-Cola where their advertising activity this summer has focused on core human values that are at the heart of the brand and then leveraging this in a very creative and engaging way. In Asia they introduced a can that can be twisted in half and shared between friends, in Singapore some vending machines dispensed on the basis of a hug rather than money and their 'small world' vending machines linked strangers across dived nations such as India and Pakistan. Strong brand building campaigns that focus on the core Coca-Cola values, building the relationship between the consumer and the brand an engaging and creative way.

The challenge for the industry

Whilst the rumors of online advertising's death may be overstated there is clearly a need for brands to better understand its place in the mind of consumers. Amid all the talk of programmatic targeting and algorithms perhaps it is too easy to lose sight of the fact that at the receiving end is a human being with very human needs, motivations and attitudes. We ignore this reality at our peril.