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Ever since the earliest ads began appearing in newspapers at the start of the 19th century, advertising has been tolerated by most people as a credible source of information on products and services. But in recent years, as digital advertising has steadily grown to account for one third of total ad spending, public trust and favourability has declined sharply. Most people now feel bombarded by interruptive digital ads, creeped out by ad retargeting and resentful at the constant intrusiveness. According to Forrester Research, just 21% of the online population still believe ads are a good way to learn about new products1. Everyone else feels preyed upon, knowing their online activity is being shared by ad networks across the web.
Advertisers, for their part, aren’t feeling they’re getting their money’s worth. The world’s biggest ad spender, P&G, had harsh words for the industry a couple of years ago, accusing it of waste and fraudulent practices, upset that as little as 25% of money spent on digital ads was reaching its intended audience. The world’s second biggest advertiser, Unilever, has called the web a “digital swamp”. Its former CMO, Keith Weed, recently said, “Without trust, advertising has no future”.
That’s why the web has reached a “tipping point”, according to its inventor, Tim Berners-Lee, who favours a total reboot. The problem, of course, is that the web’s commercial model revolves entirely around brands spending money on ads, these days mostly through programmatic advertising. Almost all of the digital display dollars are being soaked up by the duopoly of Google and Facebook, and now Amazon has entered the ring, its sights set on attracting a hefty slice of that spending. That leaves the rest of the digital publishing industry fighting over a shrinking pool of ad dollars, forcing them to consider adopting a subscription model just to stay in business.
Today thousands of ad tech companies feast on US$235 billion in online ad spending2. Consumers have responded by installing ad blockers, with one quarter of US Internet users now blocking ads3. The adtech industry has been trying to clean up its act, but until they give people a better reason to view and click on ads, a day of reckoning is coming.
As the chief strategy officer for Toronto, Ont.-based Acuity Ads, Seraj Bharwani recognizes the urgency to rethink the current ad-based model. He was one of the founding members of Digitas in the nascent days of the web and over the years he’s helped shape the digital strategies for many top consumer brands, among them American Express, P&G and AT&T. In this interview he shares his perspective on the past and future of digital advertising, as well as his ideas for industry reform. I started by asking him about his experience in those formative years in the mid-90s when people were still scratching their heads about what the web was really all about.
- 1. Forrester Data Consumer Technographics North American Online Benchmark Survey, 2016.
- 2. AdAge Fact Pact 2019
- 3. eMarketer, “Demanding a Better Ad Experience”, Dec.2018.