With India recording the highest percentage of total ad spends across Asia Pacific last year and digital advertising growing at the fastest pace of 47.5%, competition in the ad tech media space is heating up rapidly. As more players enter the market, many publishers are excited at the prospect of having a wider pool of advertising partners to choose from and by extension, the potential for higher revenues.
But don’t be so quick to rejoice; an increase in advertising partners doesn’t necessarily boost revenue. As the ad tech stratosphere becomes more saturated, here’s why publishers might end up making similar or even less ad revenue:
1. Quantity isn’t everything
Based on the effective RPM model used to calculate ad revenue, publishers need to drive a lot of traffic to ads in order to monetize.
This becomes increasingly difficult amidst the rampant competition among ads fighting for users’ attention and clicks. Introducing more ad units to a page may not be a wise idea, as new units could end up cannibalising existing units and lowering the average RPM for each ad. Cramming too many ads on a page may, therefore, reduce overall site RPM and earnings.
2. Too much clutter
Banner blindness — 86% of users have that today.
Although the first ever digital banner ad had a click-through rate of 44%, the number has fallen to an alarming 0.1% since, and will likely continue to drop. After two decades of stale ad formats, users have learnt to ignore box and banner advertising, and their eyes skip pass traditional ads like second nature.
New, innovative ad unit offerings in the market today aim to elicit the elusive click by displaying large ad formats, designed to catch the eye of users. However, bigger isn’t always better, and many users find attention-grabbing ads disruptive.
Even if users do click them, unintentionally or otherwise, conversion and ROI might ultimately be low. In the long run, noisy pages diminish value for both the publisher and the user.
3. User trust is compromised
Ad revenue is no doubt critical for publishers, and it’s what allows publishers to keep producing quality content for users to consume and investing in technology to enhance site performance.
But if the recent rise in ad-blocking is any indication — a whopping 122 million users in India use ad blocking browsers — people are becoming more impatient with ads, and publishers urgently need to switch to unobtrusive advertising or risk losing their audience. A page cluttered with irrelevant advertisements disrupts the user experience and renders it unenjoyable, and compromises the trust users have in your site. Low loyalty not only results in decreased engagement rates with advertisements but also decreased traffic to your site, leading to long-term revenue loss.
So what can publishers do about this?
First and foremost, don’t be tempted to fill up your page with ads in a bid to monetize, as that would only turn users away. Instead, make it your priority to optimize and personalize the user experience. Users are less likely to overlook advertisements if they find the advertisements relevant.
So phase out generic advertising, and clear the clutter. Opt for more targeted, industry-specific advertisements, and embrace new, creative and unique ways of displaying ads.
Native advertising, for instance, is one way to cut through the noise and get ahead of the curve. By weaving ads seamlessly and non-intrusively into the content, advertisers and publishers are able to capture users’ attention in a subtle yet engaging manner.
As new technologies develop and the ad tech market grows increasingly crowded, the time to relook revenue models and innovate with ad formats has never been this ripe.
Publishers and advertisers ought to explore the myriad of emerging opportunities to stay competitive and relevant, so as to bring long-term value for themselves and users alike.