Modern Advertising Needs New Strategies
In advertising, businesses, publishers, and consumers share a relationship based on balance and tension. But industry missteps have thrown that balance off-kilter, unsettling consumers and threatening advertisers’ and publishers’ livelihoods, Forrester Research analyst Joanna O’Connell concludes in a recent report.
Advertisers have not adapted to consumers’ higher expectations, which has led consumers to seek all sorts of creative ways to avoid ads, O’Connell says in the report, titled “The Future of Advertising Is Imminent Upheaval.”
“Since the advent of digital, advertising has become much more aggressive and much more intrusive,” she says, which has led consumers to use ad blockers or turn off cookies.
This follows efforts by companies to phase out cookies, particularly as Google announced plans to sunset third-party cookies. Apple and Mozilla already removed cookies from their Safari and Firefox web browsers, respectively.
However, too many other companies have not adapted to consumers’ higher expectations and ad avoidance. Many still depend on outdated segmentation, messaging, and media approaches, leaving them struggling to appeal to consumers without alienating them, O’Connell says.
Forrester expects advertising in the next couple of years to look vastly different than the broad-based, banner-ad-driven ecosystem of today. O’Connell expects an increase in walled content, a new audience-targeting reality, and the impending end of the third-party cookie to reshape the advertising ecosystem.
“Marketers must radically re-orient their advertising around delivering value in the next era of advertising,” O’Connell says. She expects the most successful companies to focus on first- and second-party data from consumer relationships, heavily curated partner ecosystems, and content and ad format strategies that focus on delivering value to consumers, not just value to the company.
As that goes forward, the publisher-company partnership and brand data will be more important than ever, according to O’Connell.
To collect customer data or to deliver advertising that resonates with consumers, companies will need to clearly communicate the value that customers will receive in return, O’Connell says. “Companies need to be more transparent and clearer about the planned use for any data that they collect.”
If the company delivers value with its advertising, consumers will be much less likely to turn away from it, O’Connell says.
“An advertiser’s North Star must be the respect of both the spirit and the letter of customer-centricity,” O’Connell says. “Rather than looking for the next cookie work-around or obsessing over how to buy that next audience, rethink what it means to deliver value through advertising. Make it easy for consumers to say yes, both implicitly and explicitly, to your brand’s message rather than forcing them to find new ways to understand you.”
O’Connell recommends that companies invest in consumer understanding, creating better direct touchpoints and authentication opportunities that offer value and can attract customer interest.
The report singles out Warby Parker and Noom as companies that have taken the right steps. Both rely on quizzes to personalize offerings and to obtain data about their customers.
Additionally, brokerage TD Ameritrade delivers real-time stock updates in ads via a data feed, which, according to Forrester, enticed inactive customers back into action.
Another way companies can be better prepared for the future of advertising is to prioritize partners who will bring them closer to consumers in an ethical manner, according to O’Connell. She explains that all advertising partners need to add value. High-quality, focused publishing partners will be more valuable in the new environment than broad-based publishing partners.
Another recommendation is to experiment with consumer-friendly advertising formats and environments and unobtrusive methods.
Cleverly, when Hulu watchers hit the pause button, an ad for toilet paper might appear. Since the viewer might have paused the video for a bathroom break, the very short ad isn’t seen as intrusive, according to O’Connell.