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Online Advertising

Research reveals Gen Z avoids ads at all costs
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Any company looking to target Gen Z consumers (those born between 1997 and 2012) shouldn’t even bother with traditional advertising.

That’s the stark finding from a new report released by digital consumer research firm Bulbshare, which gathers insights from thousands of consumers around the world.

Titled Ad blockers and advocacy: Why Gen Z is blocking paid ads in favour of real voices, the report finds that 99% of consumers in this generational cohort will hit “skip” on an ad if it’s an option and that nearly two-thirds (63%) use ad blockers to avoid online adverts.

Their readiness to do so comes largely from the fact that they feel overwhelmed by the number of adverts they see daily. The report shows that nearly three-quarters (74%) of consumers feel bombarded with ads. The same percentage feel irritated with adverts and the incursions they place on their time. One in four, meanwhile, find advertising extremely intrusive, while one in two believe it is somewhat disruptive.

“The best advertising has always been disruptive,” says Bulbshare founder and CEO Matt Hay. “It should be difficult to ignore. But today’s brands face the very real danger of being part of an indistinct but annoying wall of noise”.

Over the past decade or so, brands have increasingly supplemented their traditional advertising efforts with influencer marketing. But customers are becoming more distrustful of the relationships between big brands and high-profile figures.

Bulbshare’s research shows that 84% of Gen Z consumers have lost faith in influencers. They are, unsurprisingly, more inclined to make purchases based on authentic recommendations. In fact, 86% would be more inclined to buy a product recommended by a friend than a paid influencer.

“This desire for authenticity makes it imperative that brands not only have products worth recommending but that they cultivate communities where authentic recommendations can take place,” says Hay. “In fact, there’s real hunger for this among Gen Z consumers. Some three quarters (74%) would promote a product they genuinely care about online. Moreover, 88% are enthusiastic about collaborating with brands, and 76% said they enjoy reviewing products.”

“In a world where 81% of consumers trust real opinions over those promoted via an advert,” Hay concludes. “It makes much more sense to allow consumers to be authentic advocates for a product or brand than to spend money on an ad that will, at best, be ignored and cause active resentment at worst.”

Download Ad blockers and advocacy: Why Gen Z is blocking paid ads in favour of real voices here.

IAB sets out Online Advertising Programme vision
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With DCMS’s consultation on the Online Advertising Programme expected soon, the IAB has shared its view on how the regulatory framework for digital advertising can be developed

Ahead of the consultation on the Government’s Online Advertising Programme (OAP), the online advertising industry body has laid out its view of how the regulatory framework for digital advertising can be developed, building on and complementing the comprehensive system of self-regulation that is already in place.

To this end, its has worked with members to develop key principles for the OAP to ensure that the future regulatory framework is ‘proportionate, targeted, and effective’. The five key principles that it believes the OAP proposals should meet, and which it will ask government to use to guide its policy development, are:

  1. Recognition of and support for the value of the ad-funded business model and its crucial role in the digital economy: The UK’s digital advertising industry is world-leading and the biggest in Europe. It drives e-commerce, helps fund technological innovation across the economy, enables free access to content and services and supports business growth from big brands to SMEs. It’s important this value is recognised as the OAP is developed, both in terms of continuing to drive responsible and sustainable growth, and in understanding why it is critical to ensure that regulation is well-designed and is proportionate to the harms it is seeking to address.
  2. Recognition of the place of self-regulatory mechanisms and open standards in any new framework: From the ASA to IAB Tech Lab, there is already a range of self-regulatory mechanisms and open standards initiatives in place that are designed to directly protect consumers and to indirectly contribute to consumer trust in digital advertising. It’s crucial that existing self-regulation and standards are taken into account and complemented by any new regulatory framework being developed.
  3. A clear vision that brings coherence and alignment to all relevant policy and regulatory workstreams, aligned with the Digital Regulation Plan: For the OAP to be effective, it must align other relevant ongoing regulatory policy workstreams around a clear vision that is aligned towards the same policy goals, and present a coherent overall plan for regulating and supporting the online advertising sector in line with the Government’s economic goals for the digital sector and the Digital Regulation Plan. Collaborating with and drawing on expertise from industry is vital for designing a clear and coherent overarching framework that looks forward, not back.
  4. An evidence-based approach with robustly justified proposals: The OAP proposals should meet accepted principles of effective regulation. In its consultation, DCMS should robustly justify any proposed regulatory interventions based on clear evidence of the harms they are seeking to address, and how they will deliver specific, measurable outcomes. At the same time, government should recognise that a combination of regulatory tools and other solutions may be needed to address a single ‘harm’. We welcome the opportunity to support DCMS where we can in gathering the evidence that it needs throughout the course of this Programme. Where the necessary evidence does not exist, we are keen to work with DCMS to identify how it can be obtained.
  5. Emphasis on cooperation between industry, law enforcement and regulators to target criminal actors: Our industry shares the Government’s goal to protect consumers and foster innovation to fully realise the benefits of the digital economy. Where the evidence shows that a particular harm is perpetrated by bad actors, the Government should work with the relevant representatives of industry, law enforcement and regulators to design an effective approach.

To sum up, the IAB says OAP represents an opportunity for the Government to work with industry to design and develop a modern, digital-first regulatory framework that supplements the existing system of self-regulation and targets the bad actors that look to use advertising as a vector to commit crime and cause harm. It says it believes a partnership approach is needed from this point forward between the government and all actors in the digital advertising ecosystem, whose collective action is needed to deliver shared outcomes and evolve and maintain good practice within the industry.

The IAB has sent a version of these principles to DCMS ahead of its consultation on the Online Advertising Programme.

Global online Advertising Expected to Reach $1,089bn
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A rise in expenditure on digital media across various industries and a surge in popularity of streaming platforms is driving the growth of the global internet advertising market, according to new data.

A new report from Allied Market Research pegged the global online advertising market at $319 billion in 2019, growing to hit $1,089 billion by 2027, equivalent to a CAGR of 17.2% over the forecast period.

The report cautions that rising adoption of ad-blockers has restrained the growth to some extent, but that the emergence of advertising automation and a rise in adoption of identity-based pay-per-click (PPC) marketing are projected to pave the way for lucrative opportunities in the coming years.

Specifically, it says the impact of COVID-19:

  • Increased use of social media leading to rising drift to resort to social media platforms to endorse various media content with the target audience, which boosted the global market for Internet advertising.
  • That trend is likely to continue post-pandemic as well, since advertising of media and entertainment content over Twitter, Facebook, and Instagram has almost become a new drift in the recent times.

The global internet advertising market report is analyzed across platform type, ad format, pricing/revenue model, enterprise size, industry vertical, and region. Based on platform type, the mobile segment accounted for nearly two-thirds of the total market share in 2019 and is expected to rule the roost by 2027. The same segment would also manifest the fastest CAGR of 18.9% during the forecast period. 

Based on pricing model, the performance-based segment garnered more than half of the total market revenue in 2019 and is expected to lead the trail by 2027. At the same time, the hybrid segment would manifest the fastest CAGR of 22.7% throughout the forecast period.

Based on geography, North America held the share in 2019, holding around two-fifths of the global market. The market across Asia-Pacific, on the other hand, would cite the fastest CAGR of 21.6% from 2020 to 2027. The report also analyzes the market growth across LAMEA and Europe.

Booking.com leads the big spenders for PPC in the travel sector
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A small group of online travel agents, including Booking.com, OnTheBeach.com and Trivago, dominated paid search in the first quarter of 2018.

Each of the aforementioned firms spent £7 million+ on search through Google (on the keywords monitored), with Booking.com splashing out almost £20 million, according to research by Kantar Media.

The study – which uses data from Kantar Media’s Digital Advertising Intelligence Solution, combining insights on both pay per click and organic search/display ad spend – also identified TripAdvisor as the clear leader when it came to organic search in the first three months of the year.

TripAdvisor saw over twice as many impressions and almost twice as many clicks as Lastminute.com, its nearest rival in the travel sector, with an estimated PPC value of over £120 million. Of the three biggest PPC spenders, only Booking.com features amongst the top six sites for organic search impressions.

Accommodation tops the keyword charts, but the battleground is for cheap holidays

‘Hotels’ was the keyword with the highest spend during the three-month period, with businesses spending an estimated total of £8,504,262, over seven times more than on the next most invested-in keyword, ‘air bnb’.

Booking.com in particular made huge investments in hotel related search terms. The site’s top ten keywords for both spend and estimated PPC value in organic impressions all contained the word ‘hotel’ or ‘booking’, accounting for a total spend of around £4.8 million.

Outside of accommodation, the key battleground for PPC in the travel sector is around low-cost breaks. ‘Cheapest holidays’, ‘cheap holidays’ and ‘cheapest flights’ all feature among the 20 most sought-after travel related keywords, accounting for almost £2 million in spend between January and March this year. 21 separate advertisers were spending on the keyword ‘cheapest holidays’ and 19 on ‘cheap holidays’, making them some of the most competitive keywords in the industry. In comparison, for all the spend on ‘hotels’, the keyword was only contested by 14 advertisers.

Richard Poustie, CEO, Kantar Media UK, commented: “Both search and display advertising are incredibly competitive in the travel sector, especially in the first quarter of the year, and this is reflected in the huge investments brands make in this space. It’s important, therefore, to remember that spend in itself is only one part of the campaign – if brands want to get a good return on their advertising investment, it is vital that there is consistency across their online search and display, and that their chosen search terms complement their display advertising.

“In such a competitive space, being able to see what competitors are investing in – across both search and display – and to understand why, will help businesses tailor their own advertising strategy in order to stand out from the crowd and to continue to attract consumer spend.”

Online ads over take TV commercials for complaints
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The Advertising Standards Authority has revealed that a record number of ads were amended or withdrawn in 2017, with online advertisements sparking more complaints than TV commercials for the first time.

In its annual report the body highlighted that some 7,099 ads were amended or withdrawn, while it provided advise and training to 389,289 businesses.

Other key findings include:

  • 27,138 complaints were resolved about 19,398 ads – a 14 per cent increase in cases compared to the previous year.
  • The internet overtook TV as the most complained about medium – 10,932 complaints about 9,951 online ads (TV: 9,466 complaints about 4,666 ads).
  • The ratio between internet cases and TV cases remained comparable with the previous year at around 2:1.

“We want to make sure ads are responsible without consumers necessarily having to complain to us,” said the ASA’s chief executive Guy Parker. “By being more proactive, we’ve secured the amendment or withdrawal of more ads than ever before. At the same time, we’ve delivered a record amount of advice and training to help businesses get their ads right before they run. Our approach is helping make ads more responsible, which is in the best interests of consumers, businesses and wider society.”

To view the full report, click here.

Are Brits over-critical of online advertising?
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A recent study published by the digital marketing software provider, Adobe, has indicated that UK consumers are among the most critical when it comes to online advertising, Marketing Week reports.

It found that 27 per cent of UK-based consumers believe, within the last three years, digital ads have ‘got worse’, ahead of France (22 per cent); the US (20 per cent); and Germany (18 per cent).

Product marketing manager at Adobe, Julia Soffa, commented on how ‘cultural reasons’ could be down to the UK’s criticism of online ads: “The volume of advertising and opportunities to be targeted by a brand are higher in the UK than the US. People in the UK see more ads and there are more touchpoints so they are more likely to be critical. Generally Europeans are more sensitive than Americans to being bombarded by advertising.”

Furthermore, 54 per cent of UK consumers describe online advertising as ‘ineffective’, compared to Germany (52 per cent); France (51 per cent); and the US (43 per cent).

 

Read more on the research here