Push advertisement is broken and influencer marketing is here to fix it (seriously).
Google is rumoured to offer their popular Chrome Browser with a build-in AdBlocker — yes, the ad giant that is reaping three out of four of the online marketing dollars out there together with Facebook.
But why is one of the biggest online advertising players putting their own ad revenues at risk?
Maybe forcing ads on people that clearly don’t want to see them is not a sustainable way of doing business and will hurt it in the long run. Out of thousand people seeing a display ad, only one clicks them on average. And that number includes all the undetected mis-clicks, click baits and the fraudulent clicks. Omnipresent advertisement is the nuisance of modern life we have learned to life with.
But have we? Not everyone has subscribed to the constant rain of distracting unwanted ads. David Searls calls it ‘the biggest boycott in human history” — installing an ad blocker to avoid push ads.
The online display marketing space experiences the tragedy of the commons, as professor Enrique Dans points out and people are resisting:
It’s the same old story — industries discover a new medium, and the tragedy of the commons is doing the rest. They start to exploit it as if there was no tomorrow and end up destroying it. The advertising industry has done the same with every medium, and it has been necessary to create rules for all of them: there was a time when door-to-door selling was seen as normal. […] The same with the phone: today, if a caller starts by asking our name and surname, we hang immediately: aside from wasting our time, we’ll likely end up buying something we don’t need or want. […] we are going to exploit a resource until it becomes completely unsustainable […]. The pattern is so utterly repetitive, you’d have to be from another planet not to see it.
Sounds familiar. We only notice the amount of junk advertisement that we are bombarded with every day, when we are not the subject of it. And that’s only feasible by either to moving to Cuba (works both off- and online) or installing an ad blocker (which unfortunately only works online).
However, there are possibilities to do things right. Take search marketing — showing ads for products and services that match the interest of the search is both effective and acceptable for the user. This is why some search ads rake in as much as 230 USD / click (!). Google could just maximise on the return that an advertiser is willing to pay. Instead Google opts to optimise on the experience for the search user: If an ad does not click or the user bounces back to search soon after visiting the side, the ad is ditched. This is why search ads are generally considered acceptable advertising. And probably why Google does not fear the ad blocker. People actually like their ads.
What is Push Advertisement? And why is it broken?
But right now that equilibrium only works for search marketing, also known as pull advertisement — which is when users have expressed an intent like searching for ‘online car insurance’ or ‘cat video funny’. This is when advertisers do not have to persuade the consumer of the need to buy a car insurance. They need to persuade the consumer that this is the best company to purchase the insurance with.
How do you learn of great new products, product categories you did not even know they existed or luxuries like perfume? Marketeers call it demand creation.
The concept of display advertisement caters this concept and marketeers try to persuade users by showing the right message to the right audience. It could work in theory, since potential consumers chastise bad advertising by not paying attention and compliment great advertising for bad products that outperform competitors with better returns.
There are some amazing examples like Product Hunt, basically a curated discovery page for digital products — or even glossy fashion magazines serving as a highly curated advertisement outlet, where advertisements are not that much a problem as they are part of the product.
So where does influencer marketing come in?
Display advertising is disfunctional through the absence of penalties for bad or deceptive ads. There is no direct trigger hurting the medium or platform if bad ads are shown. Content and advertisements are completely separated and are not reflecting negatively onto each other. Would you dislike HBO for running a McDonalds ad right before your favourite cooking show? Or the cooking show itself? Probably not. But if your favourite social media influencer were to do the same thing, you would be really mad. How could someone preach healthy living and then partner with McDonalds to promote a Hamburger? The influencer is a gatekeeper and advertisement content creator that you hold accountable not only for the content but also for the ads. And credible curation is great for consumers.
Influencers are the gatekeepers of push advertisement
Social Media influencers have spent great efforts in building and maintaining their fans and followers. They have posted countless content pieces, have built trust in their reliability and authenticity and have catered a specific audience that they know and serve well. When influencers are running campaigns, they can’t just separate content from ads, instead integrate ads into their usual Instagram pictures or Youtube videos. Every cooperation they do is carefully evaluated whether the brand is the right fit for the audience. Unlike TV or magazines, they will be exposed to instant negative feedback from their community.
Ask Kendall Jenner. Reportedly, she was getting as much as 250.000 USD for her promotional post of the notorious Fyre festival and the controversial Pepsi advertisement. As a result, her own brand is under scrutiny. Just like her earnings, as the FTC has opened an investigation.
And most of the coverage ignores an important outcome: Those blow backs are healthy for the influencer marketing scene. It will cause influencers to re-evaluate if they will take money for campaigns that will potentially hurt their brand and thus threaten their business.
To be fair — in recent years, display advertising has evolved. AdTech helped understand user intent even if users are not using search engines. Re-marketing is observing behaviour and targeting got very precise. The mechanisms that govern search results have been implemented into display marketing. Clicks are considered voting by foot. And if an advertiser has a history of creating ads that few people click on, the quality score decreases. This consequently would result in a price spike for those ads creating a direct incentive to avoid ads that no one will click.
There is no question that this mechanism works. But clicks are not a good indicator for advertisement quality. Otherwise people would happily ignore push advertisements like most have already do in search ads. But the use of ad blockers suggests otherwise and click-bait is proving its point. It is one of several cognitive heuristics and biases that advertisement exploits resulting in great click-through-rates, but little value or use.
There is no button to click to let an advertiser know that the carefully embedded content marketing ad that triggered your curiosity was intentional attention theft. Even publishers don’t care as long as the ad generates revenue and readers don’t overly complain. Display ads only stop short of ruining the experience for the user altogether. Just like this absurd vampire bird, that lives off their hosts inability to do something about them.
The mechanism of punishing bad ads is what is missing in traditional media channels. Did the TV stations get bad press for airing the Pepsi campaign? They did not. Would magazines get a public outcry for allowing ad space to be rented to a windy Fyre Festival campaign? Probably not.
A communication concept for influencer marketing: The benefit that an advertiser can expect will reflect on the payment that the influencer might receive. The higher the pay, the more risk the influencer is willing to take. Higher risk is reflected in the potential to damage the influencer’s own brand and the relationship toward his or her followers.
But what is new to the media market is well-researched in PR. The theory of accountability and truth in public relations is rather similar. PR professionals sell their special access to groups like journalists to get their client’s message across. So why not lie in order to increase the benefit for the customer? The reason is simple: Next time around, the journalists won’t believe a word the PR professional says. Risking this access is a stunt they can only do once before ending their careers. This is why PR material tends to be rather correct.
The very same mechanism that governs influencer marketing and leads to an equilibrium that is superior to traditional push marketing:
The difference is in the influencer’s accountability. He or she acts as a curator for the advertisement and interprets the advertiser’s message to fit the audience. The direct personal relationship between influencers and their audience leads to a responsibility when it comes to advertisement. Trust and authenticity are at stake, if the influencer’s brand values don’t align with the advertisement. If the campaigns are not effective enough, the advertiser might decide to spend the budgets elsewhere.
The incentive to create more daring, aggressive or even deceptive advertising to boost campaign success — and thus ad dollars — is similar to other ad markets. What’s different is the incentive to moderate the commercial campaigns, which is the fear of losing the follower’s trust.
As a result, this leads to an equilibrium superior to other push advertising markets. It is the first time on a large scale that media companies have the reader’s comfort in mind when placing push advertisements in their channels. It might be out of love and responsibility for the community or even strict adherence to the principles of the channel. But it might also be very well out of fear of loseing the follower’s favour. On social media, noone needs to install an ad blocker, since the unfollow button is just one click away.
With a little help from my friends. Thanks to philipp.herkelmann for feedback on early drafts. As well as my co-founder Max Kersting. Also thanks Marie Bebber and Sara Grossman for your thoughts and revision of the article.