Abstract
In the new VUCA (Volatile, Uncertain, Complex, and Ambiguous) world that consumers live in, there are new rules that will reshape all elements of advertising. Many shifts need to be studied and analyzed. These include issues such as consumer migration to the new on-line digital platforms, the changing consumer viewing behaviors, and interaction with content. Advertisers as well as advertising agencies are reshaping their business models and their understanding of the industry future. This chapter will explore the impact of technology, data proliferation, and omni-channel customer touchpoints on how organizations will manage advertising and consumer communication strategies. The author will review the opportunities provided by technology for advertisers to get insights about the digital-age consumer and the threats due to the control tools that consumers can use such as ad-blockers. This chapter will review the impact of ad-blockers on digital ad ecosystem and measures taken by advertisers to fight against them.
TopIntroduction
In this rapidly changing Volatile, Uncertain, Complex and Ambiguous (VUCA) world new rules are reshaping the advertising landscape. Technology has played a crucial part in this aspect and has permanently changed the consumer buying behavior and the essence of marketing communication. It has helped firms and marketing agencies to identify various trends like who is more likely to buy, what are they more likely to buy, when are they more likely to buy and how are they more likely to buy. Those changes witnessed significant acceleration because of Covid-19. While the long-term mental and physical implications of the pandemic don’t have yet clearly defined consequences, early signs indicate magnitude of changes that are expected to last a lifetime. For example in the US, 78% of consumers indicated that they were consuming more online services during the pandemic (PWC, 2021).
With the vaccination efforts accelerating globally, it is expected that the hybrid Online-to-Offline (O2O) models and the need for omni-channel communication will continue to grow. Consumers will value leaving home and having in-person experience but they will still value being connected with their mobile phones.
From the advertisers perspective, agility in directing and re-directing advertising spending to maximize the returns and to show outcomes is of significant importance post Covid-19. Scenario planning and agile monitoring of consumer behavior and advertising spending, are the new priorities for advertising executives. Increased use of data and technology (such as predictive analytics, artificial intelligence, machine learning, and programmatically supported advertising buying models) are the new normal in advertising . In this new world of digital advertising, marketers who take action have the opportunity to create a significant and sustained competitive advantage for their organizations. They can harness the following benefits (AIB 2021):
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Accelerate revenue growth
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Create personalized consumer experiences at scale
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Drive costs down
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Generate greater ROI on campaigns
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Get more actionable insights from marketing data
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Predict consumer needs and behaviors with greater accuracy
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Reduce time spent on repetitive, data-driven tasks
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Shorten the sales cycle
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Unlock greater value from marketing technologies
However, these developments ion the advertising industry have resulted in many challenges. Today’s consumer is not only better informed but is also better connected to the world. They no longer trust advertisements until or unless it’s been endorsed by some credible source. Consequently, the proliferation of multi-national firms has brought several new challenges to the advertising world such as cultural relatability, technological exposure, and consumer perception. In addition to that, digitization has proved to be another factor that have drastically transformed the overall media, leading to increase investment in digital advertising.
One of the pandemic’s overarching effects was accelerated digital transformation across the economy and society. This was coupled with increase in digital ad spending by 12.7% in 2020, while traditional ad spending witnessed a decline of 15.7% during the same period (eMarketer, 2021) . This trend is expected to continue with very positive long-term prospects for digital advertising. As shown in Figure 1 Digital Advertising revenue will overtake non-digital advertising by 2024 (PWC, 2021).
Figure 1.
Digital vs. Non-digital Advertising Growth 2015-2024 (PWC, 2021)
Key Terms in this Chapter
Online Behavioral Advertising (OBA): There are many definitions of OBA, which is also called “online profiling” and “behavioral targeting.” This chapter defined OBA as the practice of monitoring people’s online behavior and using the collected information to show people individually targeted advertisements.
VUCA World: A rapidly changing world, characterized by high levels Volatility, Uncertainty, Complexity, and Ambiguity. It formed new rules that are reshaping the advertising landscape.
Internet of Things (IoT): Products that use sensors and collects data to integrate the physical and virtual worlds.
First Part Data: It is the information that companies can collect from their own sources. In other words, every information about customers from both online and offline sources, such as the company's website, app, CRM, social media or surveys.
Third Part Data: It is data that companies buy from outside sources that are not the original collectors of that data. Instead, they buy it from large data aggregators that pull it from various other platforms and websites where it was generated.
Advertising Avoidance: Ad Avoidance by consumers is practiced when Ads prevent them from their viewing goals. It includes three types Cognitive, Affective and Behavioral avoidance. Behavioral advertising avoidance means leaving a website to escape the advertisements; cognitive avoidance means that the user learns to ignore advertising; and installing ad blockers is a form of mechanical advertising avoidance.
Ad-Blockers: Software that offers the capabilities to prevent ads from displaying on the consumer browser. The state of intent behind the development of ad-blocker is to enable the user surf the web without annoying ads.