Pitfalls of Digital Advertising

At the moment, advertising is in a brave new world of influence. As marketing increasingly becomes digital, advertisers will have to reexamine the way they interact with consumers. As the following evidence will demonstrate, not only are there several legal and judicial roadblocks that can impede digital marketing in the future but there are several downsides to abandoning other channels of advertising. This blog post's purpose is to list some of the disadvantages of using this kind of targeted advertising and explore some strategies to counteract these downsides. 

 It looks as if investing in digital marketing is a no-brainer from a glance at the situation. In 2019, the amount of money spent on digital marketing was over $172 million. This number far surpassed traditional ad spending (around $104 million) even though just four years earlier than 2015, digital ads were roughly half the size of the conventional ad industry (Wagner). Several perks come with making this transition. For one, digital ads offer new opportunities to interact with consumers. Recent advancements in AR allow people to engage with brands in new and exciting ways. Digital ads can also appear on social media, which 69% of all adults use. Online marketing also allows advertisers to create ads that feel less intrusive to consumers. YouTube viewers are 1.4 times more likely to watch and share ads on mobile devices, especially when these videos are silent and do not disrupt people when playing in public spaces. Thanks to these trends, there has also been a significant uptick in native advertising (How Technology...). Native advertising is when a seemingly ordinary piece of content is actually an advertisement disguised to entice consumers into interaction (LastWeekTonight). While more conventional online ads are often ignored or interrupted by ad-blockers, native advertising is designed to blend seamlessly into a site's content (How Technology...). 

 The two biggest draws of online marketing, however, are consumer analysis and geotracking. The internet provides a valuable pool of data about consumers, from online activity to demographic characteristics. Using sophisticated algorithms, advertisers can derive information about what kind of people are consuming their product and the effectiveness of ad campaigns. Geotracking provides another holy grail of advertising. This emerging technology allows advertisers to consumer's location through their phones and customize their marketing experience on social media (How Technology...). 

 Unfortunately, there are several downsides to these marketing avenues. One primary concern is that digitizing a marketing campaign does not always make it effective. While digital makes up most ads today, people are more likely to trust traditional modes of marketing. Specifically, 60% of consumers report being influenced by TV and broadcast radio, and 61% describe these channels as trustworthy. The logic most people apply is that businesses that utilize these types of marketing must be more credible and have greater faith in their product because of the high cost of making these commercials. Television commercials can also use some of the same multimedia elements that make digital ads attractive while still tapping into a pre-established sense of prestige. In comparison, only 43% of consumers are influenced by online ads (Hernold). One study from 2014 showed people only purposefully click on ads less than one percent of the time (LastWeekTonight). Social media fairs even worse and rank as the least credible mode of advertising, with only 38% of consumers considering it trustworthy. Despite concerns about them going out of business, print ads influence 45% of consumers (Hernold). Much like radio and TV, print ads already have a built-in reputation of trustworthiness from decades of familiarity. For example, in print journalism, many interactions with advertisers are guided by the concern over journalistic integrity. This divide is sometimes called the separation of church and state and has become a vital part of print's public image to readers (LastWeekTonight). Even younger generations, who are generally more influenced by and more trusting of marketing, tend to gravitate to traditional marketing slightly more than digital (Hernold).

 Another concern is that the features unique to digital marketing, such as data collection and consumer tracking, rely on building stable partnerships with third parties. The data necessary to composite intricate consumer profiles comes from companies that run web services such as Facebook and Google. These two companies also monopolize over half of all digital ad spending due to their unparalleled user base size and traffic volume (Wagner). In contrast with print and broadcast outlets, whose industries sport healthy competition, these two companies are in a unique position to set prices on these services without fear of losing to significant competitors. 

 Another downside to considering is the negative PR that can occur from relying too much on digital ads. Specifically, people feel hesitant about their personal information and online history being in the hands of corporations and advertisers. One study showed that 85% of consumers limit their use of mobile apps to prioritize their privacy. Besides, 54% of mobile users will not install an application after learning how much personal information it collects (Respect Your Data). When advertisers are not transparent about their activities, it can lead to news stories that spark public outrage. In 2014, the HBO show Last Week Tonight did a news story about the increase of native advertising in news journalism. While the segment showed harmless examples, it predominantly characterized native advertising as disingenuous and at odds with journalistic integrity (LastWeekTonight). Geotracking and data collection can also lead to a PR disaster. In 2011, Apple was caught collecting and storing a year's worth of encrypted data from customer's mobile devices. As a result, Apple was sued by multiple customers and forced to testify in front of Congress, which resulted in them admitting wrongdoing (Respect Your Data). 

 Digital advertising can provide several new avenues for engaging with consumers but still comes with several risks. The key is not to reject digitization altogether but rather to develop strategies that minimize damage. These strategies include maintaining a diverse array of marketing strategies, creating a sense of transparency, and thinking about and acting about ethical concerns of handling consumer data.

References

Hernold, Kristen. “How Consumers View Advertising: 2017 Survey.” How Consumers View Advertising: 2017 Survey | Clutch.co, Clutch, 7 Dec. 2017, clutch.co/agencies/resources/how-consumers-view-advertising-survey-2017.

“How Technology Is Changing Online Advertising.” Edited by Business.com, Business.com, 14 July 2020, www.business.com/articles/how-technology-is-changing-online-advertising/.

LastWeekTonight. Native Advertising: Last Week Tonight with John Oliver (HBO). YouTube, YouTube, 3 Aug. 2014, www.youtube.com/watch?v=E_F5GxCwizc.

“Respect Your Data.” ACLU California Privacy & Free Speech, ACLU, 25 Oct. 2018, www.itsgoodfor.biz/respect-your-data/do-you-collect-and-use-only-data-you-need.