The obvious statement
In a world taken by smart phones and tablets, where people interact through social networks, it seems a bit obvious to declare the future of anything: online, of course, as everything else. When talking about advertising it’s even easier to visualize this future, since the numbers can show the reality better than any words could do it: on a global level, digital advertising continues to defy the world’s wider economic problems, growing in terms of both volume and its share of the global advertising pie. It has reached US$100.2bn in 2012, representing year-on-year growth of 17% and a 20% share of the global advertising market. Fueled largely by substantial growth of the market in the developing world—although many of the developed markets will continue to see growth too—the market will reach US$185.4bn in 2017, a growth rate of 13% over the five-year forecast period. By that point, online advertising will take a 29% share of the total global ad market, making it the world’s second-largest advertising medium. Not only impressive, but life changing.
Who is the consumer now?
These numbers mean that the world is changing and with it, the habits of consumers are changing as well. The consumer of the early internet days, who was fascinated by display ads and could make a banner reach a 10% CTR, no longer exists. Neither the TV viewer who would patiently wait for the commercial break in the middle of a movie. Today advertisement became a choice. And in the future, chances are it will be voluntary in its full definition.
In a moment where the expression “native” is so trendy, it makes a lot of sense. Ads should be mixed with content, if not the content itself. It’s all about timing: the right message, for the right audience at the right time. Take in consideration that the message has to be creative, engaging and dynamic, that the audience is demanding and savvy and that time is irrelevant when we are talking about a world where the same ad is seen in New York, Hong Kong and Rio de Janeiro simultaneously. And we thought that typography days were hard…
And the Oscar goes to custom ads!
Advertising as we know it evolved to reach the stage it is, and as much complicated as it seems, the new global scene is exciting and promising. Take as an example the TrueView ads on YouTube: about 70% of ads on YouTube are now TrueView. There was a reduction of 40% in drop-off of ad viewing. One ad on YouTube got 33 million views, an ad by Pepsi featuring race car driver Jeff Gordon, pretending he’s going undercover to buy a car. It's got all those views even though it was four minutes long. And why is that? Because the viewer is not sure during all the time if it’s an ad or a movie. Another tricky yet particular format is what is called engagement ads, which show in standard ad formats, but when users hover their mouse over it, catalogs, videos, and other features come up.
Real-time communications, dynamic ads and engaging content like videos, are so far the best way to advertise. Remember what was just said about timing? People don’t hate advertising, people don’t like irrelevancy. Brands now are already able to adjust their marketing messages in line with customer feedback and enable their strategy to deliver live content according to the need of their target. All of this is possible due to all the processes of technology: the way that the media is bought and optimized digitally through real time bidding, the new and innovative formats that industry offer for displays and video online, and the non-stop creative content people in advertising agencies, connected 24/7 to everything that’s going on.
As a conclusion it is easy to see that advertising is not only shifting to be almost completely digital, but also it is the backbone of the Internet. The numbers prove it, consumer behavior proves it, content trends prove it, and if nothing else, a quick question: where are you reading this now?
This is the first post of a series about the “Future of Advertising”. Stay tuned for the next post soon. Comments, feedback and remarks are always welcome: we would love to hear from you.