The end of online advertising?

Online advertising: is it headed the way of Guy's Tonic? Credit: Wellcome Library, London.
Online advertising: is it headed the way of Guy’s Tonic? Credit: Wellcome Library, London.

Is online advertising in its death throes or will it morph into something more effective?

Consumers have made their views clear: a third or more say they ignore online ads while 47 per cent of people in the US and 39 per cent in the UK don’t even see them because they use ad-blocking software, according to the Reuters Institute’s recent Digital News report.

New revelations about the sheer scale of ‘fake’ web traffic has also eroded confidence in the industry.

About 11 percent of display advertising impressions are fraudulent costing advertisers about $US6.3 billion according to a study last year by security firm White Ops and the Association of National Advertisers.

The surgical strikes and cost-effectiveness promised by programmatic advertising now seems like pure fantasy. Bloomberg has an excellent feature on the topic here which reveals that just 2 per cent of impressions for a Chrysler video spot last year were actually prompted by a person viewing the ad.

The flip-side is almost as bad with companies often unaware just where their advertising ends up. Griffith University, as well as other companies such as Singtel, Procter & Gamble, and Toyota, were recently embarrassed when their ads popped up on unlicensed content streaming sites according to Mumbrella.

Now Apple has endorsed the trend against online advertising by approving its first app (Been Choice), which claims to block advertisements in mobile applications, as well as native mobile apps like Facebook.

What does it mean for companies? Traditional advertising and marketing will continue to play an important role but perceptive companies will also supplement these activities by producing their own branded content, which has its own inherent value.