Ad tech: A blockheaded way of doing things

Victory is ours for the taking. We have been handed the weapons we need to strike the decisive and fatal blow. It has never been easier to rid ourselves of the annoying and intrusive advertising that gets in the way of the valuable online experiences that are part of our lives. The content filtering capabilities baked into Apple’s iOS9 software sent ad blocking apps soaring to the top of the App Store sales charts.

That was clear evidence of what author Doc Searls — who wrote The Intention Economy and co-wrote The Cluetrain Manifesto — calls “the biggest boycott in human history”, pointing to the near 200million ad block users worldwide. That astonishing figure comes from a report by PageFair and Adobe, which found that ad blocking in the UK had soared by 82% and in the US by 48% last year. So it’s settled then — online ads are dead.

The only problem is, what if the things we like disappear along with the things we don’t? What if the fatal blow to online ads kills quality content too? Now that would be what they call a Pyrrhic victory.

What’s at stake here is the underlying business model for much of the internet as we know it. However much we might hate online advertising, it pays for the bits we love. The problem is one of perception.

The internet made everyone think the old adage was wrong after all, that actually there was such a thing as a free lunch. All that stuff: knowledge, facts, videos, social networking, communications — infinite content and you don’t have to part with a penny. But that doesn’t mean it hasn’t cost anything.

Somebody’s going to pay for this

Whoever generates all this has to make it pay. Sooner or later every groundbreaking online service has to monetize its offering — if it wasn’t designed to turn a profit in the first place. Either we subscribe and pay up front or we accept that advertising bankrolls the content we think of as free.

Deep down we know all this, of course.

Take commercial television. We understand that commercial television relies on advertising revenue to fill its schedule. Imagine if we could suddenly block TV ads. Very quickly there would be no commercial TV. No X Factor. (That might be a good or bad thing, depending on your viewing tastes). So we accept the ads in return for the content. Of course, that doesn’t stop us moaning about the ad breaks interrupting our favourite shows.

However, there has been a huge shift in the relationship between the media and the consumer — and where the power lies. Subscription TV, digital recorders and streaming services have given us the option to strip out adverts from what we want to watch.

Audiences have been further fragmented by the proliferation of digital media channels. Advertisers have had to be in more places at once in the hope of snagging our attention. To help them, the internet has made available information on who we are, what we do and who we know.

And it is this, our personal data, that lies at the heart of where it has all gone wrong. It has become a means in itself, a valuable commodity to be harvested and traded wholesale. Despite its value, this data is actually a variety of low-grade snapshots from our various online activities, never complete and rarely accurate.

It drives an ad tech industry that bombards us with indiscriminate online advertising that has grown ever more intrusive. The experience has become intolerably bad, especially on mobile devices where ads aren’t just annoying, they slow down internet connections and can cost users money in data downloads.

Tracking and targeting just lump us into broad demographics and treats passing interest in something as fully-fledged intent, resulting in adverts that stalk us around the internet. The problem is, advertisers are playing a numbers game. As long as enough hit their target they don’t care about the collateral damage. In doing so they are poisoning the well.

Consumers have become more aware of the value of their data and increasingly uneasy about who has it and what it’s being used for. This sense of powerlessness is highlighted every time a high profile security or privacy breach hits the headlines.

It seems only natural to block irksome ads along with the tracking and data gathering that goes with them. But this treats only a symptom and not the underlying problem of how to make valuable online content sustainable. We might be prepared to subscribe to a handful of TV and online services but who wants to pay for admission to every single website they visit?

So we have ended up in a situation where businesses are at war with the very people they want to be their customers. That makes no sense.

Advertising and marketing is the essence of competition, creating a survival-of-the-fittest commercial environment that offers up newer, better, and cheaper products and services. We want — and need — to be sold to in some way, however impervious to advertising cunning we think we are. Advertising is part of the vast spectrum of information we absorb that informs and influences us, helping us towards decisions rather than having to forage for every last thing we need in our lives. That’s to say nothing of the cultural contribution made by truly creative advertising.

As with any problem there are enormous opportunities here. What it requires is a completely fresh approach to the relationship between advertisers and consumers.

Consumers share when businesses care

All most companies really want to do with our personal data is work out what they might sell to us. Get that wrong and they are wasting their time as much as ours. The more they know about us the more accurately they can understand and communicate with us. And the more valuable our personal data becomes. So it follows that the more of our data they have, the more relevant they can make their offers to us — something that might actually benefit us. The ad blocking backlash suggests that getting people to share more of their information could be quite some task, however.

Perhaps it would help if both sides trusted and respected each other a bit more. Advertisers should accept that current practices are crude and ineffective to the point of exhausting the public’s patience, with the price paid in damaged trust and credibility. More importantly, they should wake up to the enormous potential that exists to build better relationships with consumers that would unlock access to richer personal data.

This is perfectly feasible, with 80% of consumers prepared to share key information about themselves with brands, according to a report by marketing and loyalty firm Aimia. However, the same study found that only 8% felt they actually got better offers from companies in return.

Separate research by data sharing advocates Digital Catapult found that a similar proportion of people — 79% — believe personal information is used only for the economic gain of the companies using it. It is clear there is a gulf in trust between consumers who are quite open to sharing their data and businesses that seem unwilling to change bad habits.

The simple answer is to turn things upside down. Businesses should hand back control over personal data to the consumer. When an individual holds and controls all their data it becomes greater than the sum of its parts. It puts them at the centre of what can be described as the Internet Of Me, where the individual is the enabler of online interaction rather than being a passive target for it. The result is a deep, detailed and accurate picture of the consumer. Such comprehensive, integrated personal information would be far more valuable to a company than the piecemeal slices of inaccurate, crude data from the discredited wholesale marketplace.

The obvious challenge for businesses is to find a way to access it.

The customer is always right

The act of handing back control is the first step in establishing trust with consumers that can then be built upon with offers of products, services and experiences that are tailored to them. The better the value proposition, the more inclined they will be to share further.

“Companies need to realise that the power in the Data Exchange Economy rests with the customer,” said Amia Group Chief Operating Officer David Johnston, announcing the company’s Loyalty Lens report. “To be successful, companies must think about what they can do for the customer, not to the customer, with each personalised communication, experience and offer.”

Software and apps already exist that can aggregate a person’s personal data under their own secure and private ownership with the facility to allow third parties to share it. If an offer is personalised and highly informed as a result of accessing such data, it should follow that the content, timing and delivery will not be unacceptably intrusive. The ideal is for it to become timely and welcome.

The quality of this data makes the benefits of such a relationship entirely mutual. Here is an opportunity for businesses to engage with consumers on a deeper level than has been possible before.