Reasons to be cheerful?

Following the Year Ahead event, RadiumOne’s Rupert Staines assesses the prospects for digital advertising in 2016.

On the back foot?

You’d perhaps be forgiven for feeling that digital advertising heads into 2016 a little battered and unsure of itself.

Earlier in 2015, data privacy, security and fraud touched, it seemed, every conversation. Hot on their heels, the ad-blocking crisis landed the debate much closer to home, impacting the prospects of every stakeholder in advertising. Whichever statistics you subscribe to, this is a phenomenon that won’t go away quickly or easily and neither should it.

Is it all over? Is data-positive marketing a fairy tale after all?

Well, of course not. To its credit, the advertising industry has generally responded on all fronts with measured calm. There is, gratifyingly, a growing understanding that just as disruption threw the pieces up in the air for music and film, it couldn’t be that long before the digital reaper came to call on media.

In the context, ad blocking, we’ve come to understand, is not cause of anything per se. It’s a powerful symptom of the underlying changes in the power relations that define how we capture, satisfy and, of course, monetise the invaluable attention of the increasingly aloof connected consumer. The ad blocking debate has plenty more time to run.

Publishers in particular are actively recalibrating their role and value in this moving eco-system – how and why they get paid, what for, and by whom. Pro-active publishers like Axel Springer in Germany, City A.M. in the UK and the US-based Washington Post are pro-actively fighting back in the ad blocking debate, proving there is life in the old/new dog yet.

A necessary correction

It does, however, seem inevitable, indeed beneficial, that a degree of contraction and consolidation should tighten up what has become, let’s face it, an over-flowing digital industry map that has begun to bloat.

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And whatever we may feel about the argument that online advertising needs to get its act together in terms of quality, practitioners serving low cost ads in support of low end content that few consumers are willing to tolerate, are doing the broader industry no favours.

They will, in 2016, find it hard to keep a grip on convincing revenues, in the face of tougher brand expectations and, of course, the perception that they are to a significant extent the irritants that tip the consumer into wholesale ad blocking.

Not to say that promising start-ups should suffer for the sins of the grown-ups…we will clearly continue to depend upon and invest in new technologies that add value. But we can be sure that from brand clients, from investors, and of course, from consumer and regulator, the tough questions will keep on coming if we don’t behave properly.

A digital backlash?

There is, however, a larger context that we need to be aware of here. We are picking up – perhaps understandably…we are after all in the media business, and chilling headlines are part of the game – talk of a “digital backlash”.

In the FT Weekend of 6 November 2015, advertising professional Ian Leslie wrote a long and elegantly phrased article, “How the Mad Men lost the plot”. It’s well worth a careful read, not least because Mr. Leslie draws on some of advertising’s biggest thinkers Like Dave Trott and John Hegarty in support of his story.

While neither praising nor burying digital’s pivotal role in the advertising of the age of GAFA (Google, Apple, Facebook & Amazon), the article speaks directly to a concern that digital is not the universal answer too many in the industry thought it was and still think it is.

He writes of the enthusiasm (indeed, the evident desperation at the time) with which agencies and, perhaps less confidently, brand clients seized upon digital’s powerful scientific potential, as an overdue riposte to the “advertising as art” question (John Wanamaker’s “which 50% of my budget actually makes a difference” chestnut) which, let’s remember, has been hanging around for about a century.

All of a sudden, we could start to have conversations about value and ROI that had been fudged for decades. Mr. Leslie’s article concluded with the very reasonable caution that the traditional rules that determine how brands grow, and the practices that express them, must not be thrown out with the analogue bathwater. He also points out the enduring value of TV in building brand equity.

This is absolutely true and a calming insight in today’s manic media world where the pressure for revenue growth is beyond extreme.

A cursory scan of this important piece might leave one with the impression that digital advertising has somehow failed. Looking closer, we see his real story. That after the years of heady uptake and growth in the digital sector, questions about the role and value of digital advertising especially, remain, and that some players are disappointed about that.

I’ve no idea why. The challenge remains for those of us in the digital sector to prove again and again that our contribution works either as a standalone or as a contributory piece to other media in driving positive business outcomes. That is after all what clients want and deserve. They are, after all, the purse holders and this should be our core objective.

A different correction

It’s essential that we remain very clear at this point, especially as we come out of a tough 2015 and into a New Year.

The recent problems we have faced up to, that have made this year such a roller-coaster ride, should not be blamed wholesale on digital practitioners, the vast majority of whom offer fantastic and valuable service to their clients. They are concerns that reach right across media.

Equally, queries about the future of advertising, which, as we know from long experience, have repeatedly swung from art to science and back again, do not belong entirely at the door of the online industry. Again, we can put shoulder to wheel in the service of the cause, but the responsibility must be shared by all affected stakeholders.

I see 2016 as the year to take the digital industry to another level and prove some of these doubters I’ve talked about wrong.

There are three key challenges that will help us prove our increasing worth to clients in 2016:

Digital should never have been given the ‘assumed title’ of the future of advertising – that previously favoured son that, having sorely disappointed the family, gets sent away in disgrace.

It remains a cornerstone of the future of business, of urgently-needed innovation, of good marketing practice, and, once we’ve worked together to address the current ‘street furniture issues’ I’ve talked about previously which – not to minimise the challenges at all – will continue to vex us in the short-mid term, of an advertising business which will never stop evolving.

With that evolution comes risk, and uncertainty, and, in the end, value that continues to drive growth.

It’s with this in mind that we step into the first weeks of 2016. There are lots of jobs to be done, yes, but we have a refreshed sense of why, how, and in particular where, our ongoing work is so important.

Rupert Staines is European managing director of RadiumOne