Advertising growth is slowing – blip, bump or honesty creeping in?

advertising
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Advertising growth is slowing. Shares in Alphabet dropped significantly after the company announced that advertising on Google and particularly YouTube has slowed. Part of the reason, the company said, is increased competition, presumably from Amazon, who is ‘new to the game’.

Yet Amazon, too, has reported slowing advertising sales. Although the figures for both companies are healthy by any normal standards, you have to wonder what the cause might be and you have to wonder whether Facebook is facing the same situation.

It could be that competition in advertising is becoming ever fiercer and with Amazon in the game, numbers for the other two giants are bound to suffer.

It could be that brands are suddenly cautious about advertising on platforms that are taking so much heat from regulators, publishers and customers. All of the largest advertising (sorry, publishing) platforms are having to throw money at the problem of editing and removing unwanted content as well as inappropriate advertising. And it is a huge and very difficult – almost impossible – task.

Or it could be that there is an honesty creeping into our digital lives that is both brutal and refreshing.

Data privacy is an issue that has reached into all our lives. We wonder who is using it to sell us stuff we don’t need, who has it who shouldn’t and whether we will become more cautious about where we go and who we hand it over to.

It may be that while we believe that the recent GDPR was, at best, toothless, it may be that it is beginning to bite – a bit. Certainly the number of irrelevant and boring emails has not decreased and certainly most departments in Government are not GDPR compliant (they have more important things to do) but just may be the digital world is becoming more honest, possibly even growing up.

There is an email engine, for instance, that has installed a feature that stops sending emails to people who haven’t opened one for six months or so. That is fantastic for the customers and fantastic for the ‘open’ rates of email campaigns but really bad for companies who like to boast about how many people they have on their mailing lists.

Ultimately, customers do not read or even look at adverts that are irrelevant or worse, badly timed (advertising cheap flights to Phuket when you have just booked a flight to Phuket is just annoying). Companies are, hopefully, beginning to understand this and are looking for ways to make their advertising count. Some are doing it really well.

It may be brutal for the advertising platforms but customers are, still, the kings and if they don’t like crap advertising, rubbish content and inappropriate messaging then, ultimately, they will not have it.

It could be that the pendulum is now swinging fast (faster than we thought) towards a Vendor Relationship Management model, where the customer really is in charge of his digital life.

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