The advertising industry had to jump through several hurdles in 2020, but brighter days are up ahead. The silver lining of that novel year is the rising focus that advertisers and marketers are placing on users today. Nobody is a better judge than users as to what a satisfactory online user experience looks like, and they have spoken. Loud and clear.
As users have demanded more control over their online experience, fewer intrusive ads, and more ad relevance, ad-blocking rates have continued to soar in the last year, increasing by 8%. Advertisers who want to recoup the losses from 2020 have to be intelligent and creative. One possible way forward is to look deeper into the segment of ad-filtering users and their attributes.
At Acceptable Ads, we advocate for a sustainable exchange between users, advertisers and publishers to keep the internet free but profitable. We believe consumers’ online behaviors are going to become much more value-focused. But will the plans for the future provide a balance for all parties in the ad ecosystem?
Here’s a roundup of what the predictions are for the future of advertising and ad blocking.
Ad rebound expected towards 2022 onwards
The goal for the ad industry in 2021 is recovery, and the prediction is for ad spending worldwide to hit $691.50 billion. And yet, there seems to be reason to be cautiously optimistic, according to Dentsu. Experts are speculating that the recovery for the ad sector will only begin in 2022. Global ad investment is set to grow 5.8% in 2021 and is expected to grow further in 2022 to 6.9%.
According to a report by Zenith, the global advertising market is expected to drop back to 9.1% in 2022 after its growth of 15.6% in 2021. However, the tentative projection by Zenith is for global ad spend to grow by 5.7% in 2023 and then resume a steady growth of 7.4% in 2024. [Edit: December 2021]
The end of third-party cookies
We’re no strangers to this topic and we have, on many counts, urged the community to adapt to the new era of privacy.
An Interactive Advertising Bureau (IAB) report revealed that publishers could lose up to $10 billion in ad revenue due to shrinking personalization options when third-party cookies render ineffective. This will mean that more advertising funding will be poured into websites that already collect and process user data as soon as people sign up, such as Facebook, Amazon and YouTube.
This could signify that advertisers might be forced to become more intrusive in the ways that they track data. Some may choose to defy browser rules that are meant to enhance privacy by building workarounds to third-party cookies. If so, would ad-blocking focus shift to these sites?
New ways of advertising = more ad blocking?
Podcast advertising has been lagging behind the rest of the marketing world for so long, but it is finally beginning to catch up. Experts predict that podcasts hold a spot in the future of advertising. In 2020, audio was the number 1 activity on mobile and time spent on podcasts was 12% higher than the year before.
Spotify has introduced Streaming Ad Insertion (SAI), an innovative podcast ad technology that enables digital planning, reporting, and measurement for advertisers. This comes during a time when there is fragmentation in the audio advertising market.
As they find their way to remain one of the world’s leading audio platforms, will this new method of advertising, which would replace host reads with programmatically served ads, encourage a rise in the use of ad-blocking software further down the line?
Mobile ad blocking is on the rise
With mobile ad blocking rising up to 10% in 2020, we expect this climb to continue as more people choose ad blocking as the default option on their phones. As users seek improvements in their browsing experience, browsers like Opera and UC Browser have risen up to differentiate themselves in the crowded mobile browsing market by adopting a calm and nonintrusive ad approach towards ad-filtering users on mobile. It’s likely that more browsers will follow suit in due time to remain competitive in the market.
Users are still at the center of it all
Transparency and relevancy
The issue of transparency around the collection and use of online users’ data is still at the forefront of many advertisers’ minds. Although significant and contested, GDPR and the California laws are a much-needed regulatory revolution to the world of digital advertising.
Understanding the online experience that users want is invaluable in delivering ads that work for them. 94% of consumers would remain loyal to a brand that provides transparency and authenticity, and those who fail to provide them will lose out. The Gen Z population (which makes up about 40% of the population today) takes privacy very seriously and makes their purchase decisions based on transparency. According to GWI, 46% of Gen Zs have used an ad blocker to stop ads being displayed in the past month.
The need for balance
Today, users are more aware than ever of the need for balance and the necessity for advertising to keep the web largely free. However, users also want more control, and their biggest need is access to content with minimal disruptions.
Twitter has recently acquired Scroll, a subscription-based ad-blocking service that allows users to read articles without intrusive pop-ups or ads to give users what they truly want: content. Scroll blocks advertising on participating news websites and distributes a portion of its subscription fee earnings to its partner publishers.
As publishers can earn up to 50% more from this service than they do from advertising, we believe that we will start to see more businesses structured in the same manner as Scroll in the future.
More focus on contextual advertising
Advertisers and marketers are now taking steps to create relevant ads without relying on data personalization tactics—one way is contextual marketing. This advertising method is a form of targeted advertising that is controlled by the content of the site where the ads are hosted. Experts see contextual marketing as a way to focus on ad relevancy and gain conversions without invading and exploiting the user’s personal information for profits.
Towards a sustainable future
While there are many ways to look at the future of advertising, one thing remains true: advertising will continue to remain a crucial part of funding content. This means that advertisers and publishers need to work together to cater to the value-focused behaviors of online users today – over which are 200 million ad-filtering users.
It’s worth noting that 90% of ad-filtering users consent to see high-quality nonintrusive ads through Acceptable Ads. They are engaged in participating in a fair value exchange where publishers can monetize content. For that reason, they are a highly-valuable group of individuals crucial towards building a sustainable future for everyone in the digital ads supply chain.