We've talked about the massive cord-cutting movement where consumers are dropping their traditional cable and satellite TV services and are instead moving to online streaming platforms such as Netflix, Hulu, and YouTube TV to watch video content. In fact, by the end of 2018, it's projected that 33 million consumers will have scrapped their traditional pay-TV service. In addition, more consumers than ever are paying to stream music content using services such as Spotify and Pandora or are using a paid Satellite radio subscription.
When asking consumers what their motivation is behind their desire to pull the plug with cable and pay to stream music, many will tell you that it's because they don't want to have to deal with advertisements.
Ad Blocking Software has Become the New Norm
Traditional cable TV and AM/FM radio aren't the only places that consumers are being inundated with ads. Given that nearly 77 percent of American consumers have internet access and use the world wide web on a regular basis to research products and services, marketers in 2018 will spend more than $628 billion to reach this online audience with digital advertising.
It's estimated that the typical modern day consumers encounters approximately 5,000 ads each day. No wonder ad blocking software has become the norm! New research reveals that 31 percent of American consumers are using some form of ad blocking software to reduce the number of ads that they're exposed to.
Why Aren't Today's Consumers Willing to Sit Through Ads?
Do today's consumers have a strong distaste for ads, so much so that they're willing to pay for ad blocking software? According to research, this is not the case. It turns out that today's consumers just don't like the kind of advertising that they're seeing and the way that it's constantly being thrown in their face.
Despite the wealth of data and targeting features that today's marketers have access to, many consumers have an issue with the ads they encounter because they're not relevant, inspiring, or personal. However, if marketers could overcome these objections and improve their ads,two-thirds of consumers that use ad-blocking software say that they would discontinue the practice.
What Marketers Can Learn from Spotify About Creating Appealing Ads
Spotify, a music streaming service, offers two types of subscriptions to American users: free (requires limited ad viewing) and paid (no ads). However, understanding that today's consumers aren't opposed to ads as long as they're positioned the right way, Spotify began testing a new protocol in its Australia market in the summer of 2018 known as Active Media.
With Active Media, Spotify users could skip any and all of the ads that they encountered while using the music streaming service. And, in the event that users skipped ads, marketers would not have to pay for the ads that consumers skipped through. While this sounds like a win-win solution for users and brands, how would Spotify benefit from this arrangement? The answer: better access to user data.
Instead of just offering a music streaming service, Spotify wants to position itself as a full-service platform. By giving users the option to skip through the ads that they aren't interested in, the company will be able to gain valuable insight into its users preferences. They can then share this data with brands, which will allow advertisers to be able to create more relevant, personalized, and targeted Spotify campaigns.
While at first glance, it would appear that Spotify is losing out on money by not charging marketers for ads that users skip through. However, when taking into account the powerful data and insight that Spotify is learning about user preferences, Spotify could ultimately end up earning more money as advertisers would be willing to pay more for each spot they run.
How Can Your Business Create Ads That People Actually Want to View?
If you want to break through the ad blocking movement and create advertisements that people actually want to view, take a hint from Spotify and leverage your data to put together more relevant and personalized ads that appeal to your target audience. With our digital advertising expertise and access to analytics tools, our creative team at New York Ave is able to help your business craft the right ads to serve to the right audience at the right time. By helping your business to capitalize on these micro moments, we can cut through the consumer's tendency to skip ads and create content that will actually resonate with them.
We're focused on helping our clients build personalized digital marketing strategies to make their businesses more memorable. By leveraging key analytic insights, we can help you put together an effective digital ad campaign that will make your audience want to tune in.
Contact us at New York Ave to learn more about our unique approach and how we can help your business.