Digital advertising in 2017: Elephant in the room?

The story of six blind people describing an elephant has an interesting parallel in the world of digital advertising

Sandip Maiti
Updated23 Jan 2017
While time spent on the vertical screen is witnessing an inexorable rise, the platform choice is influenced by content, and behaviour is heavily skewed to messaging, social, entertainment and news. Photo: iStock
While time spent on the vertical screen is witnessing an inexorable rise, the platform choice is influenced by content, and behaviour is heavily skewed to messaging, social, entertainment and news. Photo: iStock

The juggernaut of digital advertising continues to roll ahead, undeterred by sceptics and naysayers who are questioning if brands have already over-invested in the medium. As we cross the chasm of adoption and enter the eye of the tornado, 2017 will provide the perfect space and time for a little reflection.

The story of six blind people describing an elephant has an interesting parallel in the world of digital advertising. We have been deluged by techno-babble around search, social, video, mobile, native and programmatic—throw in a couple more in the room and now you have programmable (distinct from programmatic) and AI (artificial intelligence) to add on to the ever-growing list of stuff that makes up digital advertising.

First, some numbers to set the context. Digital advertising in India is forecast to breach the $1 billion milestone in 2016-17. There is a lot of headroom for growth, when you look at the rapidly growing smartphone consumer base over the next five years—projected to rise 4x, up to 820 million. A more compelling indicator for digital spends that can ride this wave is the uptick in data consumption; climbing up at a compounded annual growth rate of 30% and projected to reach 7GB/month (per active user) by 2021 (according to the Ericsson Mobility Report of 2016). So why does digital ad spending in India still stand at just 15% of the total advertising pie, unlike the over 40% share in evolved markets? Where does the problem lie? I believe that the advertising model for digital in India is fundamentally broken. Very little responsible action has been taken by publishers and media agencies and to some extent even clients, rendering a large part of such a potent medium ineffective.

Digital advertising is all about effectiveness—and we all grew up to understand this is the only medium that has the power to deliver the relevant signals from consumers. And yet, in the limited buying exercises we conducted in 2016, we saw publishers turning a blind eye to traffic quality and relevance of audience profile. Unfathomable performance metrics and targeting parameters are spun out as yarns; many clients fall hook, line and sinker for these.

Search will continue to reign over display despite its limitations to deliver scale. For categories that score high on ‘digital influence’ (consumers researching online) and ‘digital density’ (consumers buying online), measuring intent is ‘key’—and search will be simply unbeatable in capturing intent-laden traffic emanating on the horizontal screen.

Content will be the game changer in categories that are digital emergent and score low on both influence and density. Brands that will consistently invest in content will have more success in influencing the influencers. A leading few will be able to articulate a vision leveraging such content for communities and launch their brand-as-a-service to fulfil some need gaps.

Mobile is the tricky part to understand. While time spent on the vertical screen is witnessing an inexorable rise, the platform choice is influenced by content, and behaviour is heavily skewed to messaging, social, entertainment and news. Time spent using the mobile browser is more than native apps in developing economies, and India is no exception as local research suggests. Advertising choices on the mobile are thus far more compelling yet terribly complex.

Native advertising makes the best sense of all available options backing search, especially for brands investing heavily in content. Forecasts that indicate this format reaching 75% (of total display advertising) in mature markets like the US, make complete sense as of now. But where does native work best—social, in-publisher feed, or sponsored content? It is a tough question that can best be answered by the format of advertising you choose.

Videos have a really, really bad track record on social, and Facebook has been struggling to revise recommended metrics of meaningful video consumption. Certainly, Facebook scores over any other platform in its innate ability to spread content, but when it comes to video, the numbers have to be taken with a pinch of salt. In fact, for advertising content (including brand story telling) delivered via video, I have found YouTube to return far more tangible value. Shares are a great number to flaunt on social, but barring the outliers, the effectiveness of advertising views is extremely poor when you have little control on how your content spreads. Not everyone who shares your video actually watches it completely.

What needs fixing in 2017?

We need clarity on what large publishers are throwing at our face in terms of targeting—whether it is “audience in-market” or “audience insights”. We accept many such publisher definitions at face value, and there is no vehicle for grievance redress when the performances don’t match up to the promise.

Viewable impressions (and related discussions on ad fraud) have just started being addressed with new technologies, and this needs strong push in the coming years. What needs terribly urgent fixing, and nearer home, is blatant corruption by some publishers who outsource traffic generation to farms (both human and bots), and media agencies that hand-in-glove push bulk-buys from such publishers. Clients have to take a fair share of responsibility for landing the industry in this mess because they refuse to pay the required service fees to an agency to run digital media “with brains”. The bulk buying metrics that work for mainline media are applied to digital by old-school media buyers; and at 3% commissions with no accountability on performance, everyone just ends up pulling a fast one on each other.At the end of the day, it is simple for you to examine traffic quality, to arrive at your own conclusions about who is clean and who is tainted. Which platform was more effective for ‘completed videos views’? Did the high number of shares on your contagious content reach the targeted audience? What percentage of the traffic on your website disappeared under 10 seconds? You have to start asking the hard questions and stand up to your management and speak the brutal truth.

Takeaways for 2017

Experiment always: There has never been a better time to experiment with formats and newer platforms. With emergence of 360 degree video and Live (broadcast live like Twitter with Periscope, Facebook Live etc.), the possibility of creative in-feed advertising content has taken a leap forward. Splurge some money on interactive content advertising and learn from the engagement data.

Approach hype with cautious optimism: The dynamics of digital introduces new technology every year that in turn triggers hype cycles. You can choose to skip some, like Dynamic Creative Optimization or VR (Virtual Reality is certainly the next big thing in content). Adobe has demonstrated use of technology to change ‘subject lines’ of e-mailers to counter ad-fatigue, and I am a big believer in dynamic emailers that compose content on the fly—so maybe that is something worth pursuing if you are big on triggered e-mailers—stuff that dominates early part of your relationship with a subscriber (before fatigue sets in).

Invest in dashboard technology: Measure your key performance indicators. You will need a bespoke dashboard using smart widgets that track share of search, product sentiment, audience recency/loyalty and purchase intent, etc. You must track social presence and advertising effectiveness. Conduct an interaction health check. Most importantly, split the management view (input vs. output) from the practitioners, so you can demonstrate return on investment.

Wire up your assets: For those who have reached a mature state of digital marketing running multiple brand assets (web, social, apps), 2017 will be time to wire them up using consumer-profiling technology. A mature digital business needs to know consumers better to be able to deliver smarter advertising. Capturing the state of mind of your audience is a crucial departure you can make with programmable advertising.

Understand digital for offline: Connecting online advertising with offline sales is the next holy grail of accountability and few publishers are doing pioneering work in the area. Experiment with advertising that supports the consumer decision journey (ROPO—research online, purchase offline) instead of banal re-targeting.

Focus on quality: Stop spending money in the wrong places. Find the right partner to support your vision and make sure you work out a compensation structure that incentivizes your partner to deliver quality. Hope this is sane advice for 2017 from me and five other blind men at our digital business agency.

Sandip Maiti is CEO and co-founder of Experience Commerce, an agency for digital business in India

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