What’s next for targeted digital advertising?
In March this year the Cambridge Analytica scandal broke and the ensuing privacy crisis shed light on how companies harvest and use consumers’ personal data. It’s not the first time data privacy has made the front page, and it’s safe to say it definitely won’t be the last. With GDPR upon us, the murky depths of data privacy have been thrust into the spotlight.
This perfect storm of data-driven headlines means consumers are more aware than ever of the issues around the use of their personal data. Consequently, they’re becoming more sensitive towards the repercussions of its usage. So, what does this mean for marketers, particularly in relation to targeted digital advertising?
If you can’t see the product, you’re the product
Prior to Cambridge Analytica, most consumers recognised their data was being used for advertising purposes – to some extent. However, they probably weren’t aware of the volume of data being harvested, and the value it held when being sold on to third parties.
Former British retailer Gamestation made a statement about the lack of attention we afford to terms and conditions with a media stunt on April 1st 2010. The company temporarily added a clause transferring ownership of the soul of anyone making an online purchase on that date to the business owner.
We have short memories, though. How many of us go through the T&Cs for our online purchases, especially the ‘free’ ones such as mobile apps or those on social media sites? Facebook is a good case in point: as it’s a ‘free’ (i.e. ad-funded) service rather than a product, we – the consumer – become the product. As such, there’s a value exchange, rather than a payment for each app you access within its walled garden.
While this isn’t exactly breaking news for us as marketers, the Cambridge Analytica scandal opened the eyes of a great many people.
Away from the new, back to the old?
GDPR seeks to put the power back in the hands of consumers at a time when they’re gaining an awareness that their data is a commodity, and of the power it holds. This means targeted digital advertising is entering a period of readjustment. As ‘opt outs’ become ‘opt-ins’, targeted advertising streams will need to reinvent themselves to retain reach and remain relevant.
It therefore seems highly likely more and more advertisers will defocus from personalisation and look towards mass scale advertising methods like TV and radio once again.
The received wisdom is that traditional advertising is great for brand building and awareness, but it’s targeted ads that deliver ROI. In recent years the needle has tipped towards the latter but using one method in isolation is not a good option for the longer term and both approaches have their merits.
As the media landscape evolves, and as trust and transparency become core concerns, it’s hard to predict exactly what the next big thing will be. However, there’s one safe bet – ad formats that display an inherent ‘creepiness’ factor, such as retargeting, will likely become less commonplace. If consumers do not trust how their data is being used, they now hold the power to deny companies the insight that data provides.
Brands will likely be seeking out the sweet spot between mass market and precision targeting. In the meantime, we may well see a resurgence and innovation in traditional formats. Even companies that have made their homes online also appreciate the importance of offline media to achieve their marketing objectives, as research from Nielsen shows that online businesses continue to be the biggest spenders in UK TV advertising. They spent £682 million in 2017, £100 million more than the next largest-spending category.
Trust first, targeting second
There is an opportunity here for TV and telco operators, who hold significant data, to claw back ad spend from the online giants. Pre-roll ads are already a feature of Sky’s pay-as-you-go Now TV service and last year the company announced it is shifting away from its legacy satellite platform to OTT delivery.
This suggests the prospect of ads targeted to households during ad breaks in linear broadcasts is surely getting closer. Equally, no-one would be greatly surprised if Amazon were to launch an ad-funded version of its own video service.
We spend more and more time attached to screens of various sizes, which means a direct line to consumers wherever they might be. However, if targeted digital marketing is to survive it must develop in line with consumer sensibilities, and right now that means rebuilding trust.
Advertisers must learn from the mistakes of the past and find the right balance that will engage audiences enough to opt in and to stay in. As long as it’s done sensitively, and consumers have the knowledge and ability to control what personal information is shared, targeted digital advertising will continue to be a useful tool in the advertiser’s arsenal.
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