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18.12.15

From Mad to Worse? The Turbulent State of Advertising

Ben Barenholtz, Senior Director, Global Marketing

Ask any advertiser about the state of the industry, and you are likely to get a similar response: It’s complicated.

 

For every triumph, there seems to be an accompanying challenge threatening the progress of the past few years.

 

On the upside, Advertising Age reported last month the highest numbers in ad agency employment since 2001 – nearly 200,000 staff. In other news, the global ad market seems to justify the employment peak, as the worldwide investment in advertising is forecast to reach nearly $1 trillion in 2016.

 

These numbers are certainly bright and show the sunny side of things. Yet, you’ll still find some advertisers on edge.

 

The Crux of Digital Advertising

 

While advertisers have been working in the digital space for years, the rise of programmatic and predictive technologies has ushered in bigger and better opportunities for all involved. This is where much of the digital spend has boomed, alongside the growth of agency staff.

 

Unfortunately, some providers – agencies, SSPs and DSPs alike – are delivering less than stellar results when it comes to reaching and engaging users through programmatic advertising.

 

Some of the failures can be traced to an overpopulated community of sell-side and demand-side platforms, which add a lot of noise but little value to the buyers and their clients. Other shortcomings are the result of data-heavy, creative-light ads being pushed to publisher sites.

 

Another – and perhaps larger – part of the problem, however, lies with outside influencers such as ad blocking, piracy, and bad traffic.

 

Dealing with the Intruders

 

In terms of digital advertising, the industry faces several logistical challenges in delivering content. Specifically, piracy, bots, viewability, and bad traffic can create an unreliable environment for advertisers and sellers. The industry is working on putting more standards in place to protect users on both sides, but there are still loopholes to be closed.

 

The rise of ad blocking software, which recently dealt a blow to the digital advertising industry, introduced a new set of hurdles for advertisers to accommodate. In China, it’s turned out that the number of Internet users who are implementing ad blocking software is significantly higher than was previously thought.

 

While there are some workarounds, you can see the industry scrambling to redefine how we target and create online ads to better serve consumer preferences. Which is not a bad thing. Yet one that demands greater resources and some new approaches to advertising.

With all of the upheavals and accomplishments, it is no wonder many advertisers classify the industry as turbulent.

The most important thing to remember? Turbulence can be a blessing in disguise. Times of big risk are by nature also times of big opportunity. The current state of advertising rewards the smart, the quick and the brave. You’re assured a beautifully chaotic ride. Whatever you’re doing, be sure to enjoy it.