IBC '16: Google Says Nobody Owes Publishers a Living
Google blames some publishers' ineffective digital strategies for "waterfalls of intrusive ads" but says technology offers opportunities to innovate out of the impasse
Online publishers, advertisers, and agencies have a collective responsibility to set and enforce digital ad standards or risk going out of business, warned a group of stakeholders including Google and Unilever.
"We are not here to kill off old legacy businesses, but if they don’t adapt they will be left behind," urged Mark Howe, managing director for EMEA agencies at Google. "The same goes for advertisers and agencies. The reality is that some businesses feel the world owes them a living."
Graham Wylie, senior director of market development and channels for AppNexus, a cloud-based ad optimization platform, described the publishing model as evolving from a content-based entertainment and information platform to being an audience-based monetization engine. "If things continue on this path you will end up with publishers not able to support their business on the revenues they are seeing and ultimately a much smaller, less healthy internet."
The consensus at the IBC conference session "Ad Blockers: Can Internet Advertising Be Fixed?" was that consumers do not have a blind entitlement to content but the industry needs to better communicate this message.
"From a consumer perspective, what is driving the rise of ad blocking is annoyance, irrelevance, intrusion of poor quality ads," said Chris Le May, SVP and MD of Europe and emerging markets for DataXu. "It’s a simple human nature factor that says 'I don’t like what I wanted to do to be interrupted'."
In fact many consumers do not want to opt out of of the advertising contract. In excess of two-thirds of British consumers are willing to be exposed to advertising as opposed to paying hard cash for content as long as the ads are less intrusive and more relevant, according to IAB data.
"As an industry we've got to get together in all markets, in Europe and the U.S., to set global standards and then we've all got to buy into those standards and adopt them," said Wylie (who is also chair of IAB Europe’s programmatic committee). "It’s about understanding what the consumer is doing, building standards, offering consumers choice and then as an industry, not just talking about doing it, but actually enforcing those standards and rooting out bad practice."
Unilever's media operations and strategy director for Europe, Richard Brooke, agreed. But he pointed out that the practice isn't new. "The first ad blocker was the kettle. The second was the remote control. The responsibility for it lies in everyone's hands. The advertiser has responsibility to create good quality ads, publishers need to create and present inspiring content that consumers want to engage with, TV companies need to manage their ecosystem, and consumers need to understand the relationship with good quality content. It is also incumbent on creative agencies to ensure that formats they make are not data heavy."
Why have ad formats became intrusive and abusive to consumer trust in the first place? Wylie put this at the door of online players disintermediating legacy media.
"Giant media business that create no content but signpost other people's content and have intermediated themselves with brands so they're taking the majority of the revenue available in the ad market, leaving the publisher to push ever harder to monetise their remaining traffic," he argued.
"We're seeing a tension as publishers are pushed as far as they can to create ad formats that deliver revenue to supports their business but ad blocking technology allows the consumer to opt out."
Unsurprisingly, Google's Howe disagreed. "No-one owes publishers a living. In an age of full information, the consumers are in charge. If a consumer is not visiting a publisher’s website for whatever reason, and publishers then have waterfalls of appalling ad loads on their publications, this leads to ad blocking. Waterfalls of intrusive ads means they aren’t monetizing their business effectively. They need to re-evaluate their own digital transformation, and if some of them fall by the way side then that's the consumer choice."
However, publishers and brands have the technology to innovate their way out of the impasse.
"There is far more opportunity to engage with consumers than there's ever been due to fragmentation in the market," said Le May.
Howe highlighted opportunities to create innovative formats around streaming, VR, UHD, AI, and machine learning capabilities "that can drive content to consumers in a very different way."
"Mobile is the biggest transformation facing us from a video and news point of view and a consumption point of view," he added. "Publishers must find a way to deliver high-quality journalism and conversation with their consumers but achieved in different formats and in different locations."
The next generation of digital advertising won't just be about the quality of content or the user experience, but also whether the ad serves a purpose.
"That's the great opportunity for digital, because if you look at the feedback loop between the digital consumer and the brand, the brand can signpost and nudge and use technology to be timely and relevant in way it couldn't in conventional media," argued Wylie. "But it has to do that in a way that respects what the consumer is trying to achieve.
Sky Advance, the broadcaster's targeted ad platform, was highlighted by Le May "as a much more sympathetic way to engage with consumers on behalf of the advertiser. In a lot of cases the engagement can be initiated by a consumers own actions. By downloading a VW Golf brochure from a website, they may then see an ad for a VW Golf when they get home and watch TV. That may be old media in that it's still the same 30-second spot, but it makes the TV experience far more meaningful for the consumer."
Panelists repeatedly stressed that those publishers and companies that embrace new technology can turn the internet revenue model on its head by creating new brand/consumer relationships, but they also pointed at a few legacy models which have not done this, perhaps because they have less need to turn profit, and which have consequently fallen behind.
"It worries me that that The Guardian, still one of the world’s top news sites, lost money on digital revenues last year. That’s unacceptable," said Howe.