Any good business is based on one single thing; being profitable. Whether you are building ships or silicon chips, you need to be able to cover your costs and have more money left on your bank account than before producing the service or goods. Otherwise it is a hobby, not a business.
As more and more industries are entering the world of digital and mobile spaces, they are facing the basic business question; how to make money out of digital or mobile? Even though these spaces would mean a new way of simply communicating their company’s message, they still are required to have at least some kind of ROI (return-on-investment). So the basic question is the same – how to make money in digital and mobile?
To be fair, this poses a challenge not only to industries but the industry that creates messages and their visibility – the advertising industry. From the usual newspaper ads to campaigns, street ads, and TV and radio ads, creating whole marketing and advertisement asset is far more complex than, say, 5 years ago. The newest promise is mobile ads.
Below is the picture of the mobile ad ecosystem:
The mobile phone, as an omnipresent instrument of connectivity and experience, is a small wonder. The things it can do, and the way it keeps us connected, not only with the world but with ourselves, is quite astonishing. It is almost as if mobile phones dictate our lives, not vice versa.
When a new application or service is about to be born in to the mobile or digital space, when asked how it is going to be funded (read: what is the business model), I would estimate over 80% of companies answer that their earnings model is based on ads. Free or freemium, still ads are the foundation for the business logic. Even though mobile ads spending is growing significantly (see pic below), this doesn’t mean that business logic can rely on mobile.
It is actually quite an absurd idea, given the ones who actually make money (see below).
So if you hear a proposal stating that the company A’s earning model is based on (mobile) ads, I would recommend simply…to ignore those. They won’t work.
What I wanted to share with you today though isn’t about ads as a basis for business. It is a recent evolution of the ad industry, which I believe is causing a new trend among end users. What I am speaking about here is “anti-ads”; advertisements, which actually create negative value in the end users’ perception by being too immersive, too aggressive – in the wrong place and at the wrong time. Let me give you a couple of examples:
Quite a few mobile applications use in-app banners to show ads. Some are static, some are dynamic. Usually these ads are quite horrible for a few reasons; they promote something that is not related to the used application (i.e. disconnected from main content), their visual quality is poor due to vast amount of different display resolutions used, their location on the screen is poor (yes, even with gigantic phone-like devices which are not actually mobile (/smart) phones, since you cannot use them with one hand). They can have an “x” to close them, or can show up to the user unexpectedly as part of moving between states.
When you use YouTube, they display an ad. Quite often this ad is between 20-30 seconds with an option to “skip ad”. I suspect that quite many of us do just that, skip the ad. In 2011, 70% of users were skipping those (http://thenextweb.com/socialmedia/2011/06/12/only-30-of-youtube-users-skip-pre-roll-ads/).
Google has studied this topic carefully, since the option to skip the ad was not included in the beginning, but added later: http://www.businessinsider.com/youtubes-mobile-ads-are-3-times-more-effective-if-people-are-allowed-to-skip-them-2013-9
This led me to thinking about why so many of the ads on YouTube don’t take into account the fact that people frequently skip the ad after about 5 seconds. What if the ad would immediately pose a clue to what it is about, within the 5 secs? Wouldn’t that give more ROI on ads even though people might not watch them? And while being 3 times more effective sounds good, there is still no guarantee that people actually watch those while waiting for the real content. They might just do something else.
On TV there have been quite aggressive campaigns especially against Apple by Samsung and Microsoft, which I believe show a lack of self-confidence on their own brand. Even car manufacturers, who fiercely compete and actually mention in their ads how their e.g. fuel economy is better than the competitors, don’t end up aggressively dismissing the competitor. Latest Surface ad is a sad example of how it actually shows how Microsoft doesn’t get the tablet phenomenon – and show it publicly. USB? Stand? Keyboard (which is by the way an accessory with extra cost)? Come on.
All these ads, especially in the mobile domain can easily cause a negative emotion towards the brand in question, thus becoming an “Anti-ad”. Most of these ads are of course involuntary or accidental, nobody wants to cause negative brand experience, but the more mobile and digital ads penetrate consumers’ lives, the more they will exist. Advertisements in the digital and mobile realm are about much more than having a banner on an application or a web site, or auto-play videos before “real” content.
In order to gain successful deployment in mobile and digital space, ads need to do the same thing that is the current Holy Grail of User Interface design; disappear. Best mobile and digital ads are the ones that the users’ don’t even consider ads. They are well thought out, not too pushy and they rely on the brand’s natural power and ability to explain why it is the brand you should spend your hard-earned money on. Even in mobile, which is about short stints of usage, best mobile ads must become a story that follows the user without becoming a distraction and, ultimately an “anti-ad”.
As the world is becoming more connected than before, the means to get your messages heard become more difficult. Thus, do spend a bit more time on your digital and mobile strategy and make marketing and design integral parts of brand building, followed by development. Few companies know how to do this – but we at Ixonos do.
Join us to prevent “anti-ads” taking over the world. Your brand deserves better.
Sami Paihonen, SVP, Ixonos Design +1 (408) 620 0030 email@example.com