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The client facing report “New Ads on the Block,” written by Goldman Sachs’ analysts, entails the current findings and possible future outcomes within the online advertising industry. These analysts claim that online advertising is about to be “fundamentally restructured” by the top three industry moguls: Apple, Google and Facebook. It’s no surprise to see these key players in the market begin to revolutionize the digital advertising landscape.
With that being said, the growth of mobile is never-ending. The widespread usage of mobile devices enables users to constantly and efficiently connect to a publisher’s content at ease. Nowadays, browsing the web through a mobile device or desktop without any ad interference is a given because users have hopped onto ad blocks. In fact, there are currently around 198 million active adblock users (and continuously increasing) globally, which in turn is heavily affecting publishers. This begs the question—what is an effective strategy for advertisers to serve ads that do not interfere with their user experience?
According to Goldman Sachs, Apple and Google have the potential to be the power players in controlling the functionality of ads. Apple’s IOS system is widely known to have a closed platform strictly putting restrictions on developers, let alone owning their own, not so great, in-app mobile advertising platform called iAd. Despite the lack of iAd’s success, the competence behind this platform has been progressively building up. Thus, Goldman Sachs analysts predict that Apple can further revamp iAd’s platform, allowing it to “offer both targeted and untargeted advertising based on non-personal data while selectively aligning those ads with the company’s views.”
Google has already progressed the advertising industry by penalizing non-mobile responsive sites and replacing support for Flash with HTML5. The question is: why would Google do this? The reason is to enhance user experience. User experience is an overall important factor in the marketing sphere—a website’s design, content, advertisement, and all other user components influence the customer-to-brand interaction. Goldman Sachs states that, “Google operates the largest ad exchange and ad server through DoubleClick and could become significantly more selective not only on ad types and formats permitted but also publisher standards on page load times.” Despite Apple’s iAd, DoubleClick is an open platform allowing a chance for more publishers to enter the playing field.
This alternate future of online advertising might seem quite intimidating and yet convenient but if all these fundamental changes were to happen, publishers would need to immediately re-strategize their marketing methodology. One way publishers can execute this is by restructuring their ad and content formats to match a specific platform—native ads. Although it might not be the most cost efficient method, native ads can certainly reach out to consumers without the annoyance of intruding. As one of the many things Goldman Sachs mentioned, “The value proposition to publishers is a faster page load time and better consumer experience while retaining existing advertising revenue.”
James Kim, MSD Intern