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Ad blocking: a threat or opportunity for retailers?

 

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In 2015 alone, it was estimated that $21.8 billion was lost in advertising revenue due to ad blocking technology. As the popularity of apps that actively reduce the visibility of advertising people see online grows, what does the future hold for retailers across Australia wishing to grow brand awareness and reach new customers?

To answer this question, it is necessary to look at the reason for the existence of ad block technology in the first place. It’s no secret that advertising brings money. However, over the last decade, a large number of websites began overloading their pages with advertising. This means that the online ad world has become noisy, intrusive and rather irritating. It is like going to the cinema and seeing advertising slots as long as the film itself that occur intermittently, disrupting the film with unrelated content.

This means retail marketers across Australia are going to have to rethink their advertising strategy. Instead of being part of the unwelcome noise, advertising today should be about re-establishing contact with a retailer’s target audience. People are far less likely to object to seeing adverts if they are relevant to them or their lifestyle. What they don’t appreciate is content they can’t or don’t want to relate to—for instance, promotions for a new season of European-inspired business wear (with a high price point) appearing on a youth-orientated pop culture website.

In order to reach potential customers in today’s increasingly fragmented digital environment, retailers need to think about how they make their content meaningful, personalised and relevant from the outset. That means gaining in-depth insights into customers, including the brands they love, the places they go, even the sports team they support—it’s all relevant. Retailers need to begin their approach by asking: “Where do I get information about customers that I can use to personalise their experience and use as an input to my digital strategy?”

The advent of ad blocking technology should not be feared by local retailers; it actually presents real opportunities for savvy industry professionals who know how to leverage data to stand out from the crowd. Because, if everything else is blocked and only they are getting through, their store is going to get more visibility.

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Breaking it down

Segmentation is vital to properly understand your customer base. Unfortunately, many retail marketers still segment by age, gender, income, etc.—demographic data that isn’t relevant anymore. It doesn’t matter if people are 16 or 65, they may still like the same Facebook pages. Retailers need to rethink how they segment their audience. They need to think about what data they are using to identify if a certain person falls into a segment or not. They cannot rely on a single source for data anymore.

It is important to remember that many ad blockers are commercially driven and have their own business model. Not all of the solutions on the market are on a moral crusade to protect consumers from unwelcome content. In fact, many ad blockers offer a whitelisting service that means if a retailer pays enough money, the ad blocker will let their ad get through.

Speak to me

Australian retailers should not automatically be afraid of ad blocking. If they provide content that the audience wants to consume, then the audience is far less likely to block them. It’s also important to remember that online advertising is not the only way to get content to a relevant audience.

A huge trend, especially with generation Z, is using messenger apps such as WhatsApp and Facebook Messenger. Retail brands can reach out to their audiences through these apps. Normally the app asks when someone is creating their account what their hobbies etc. are. Based on this, the user agrees to receive third-party ads as long as they are relevant to them based on the criteria they have specified. These ads do not have to be in the form of a banner.

For example, when a user is chatting with their friend about a shirt they saw on the high street, a brand can use artificial intelligence to send a message telling the customer that a similar item is on sale in a certain online store. The bot is adding something that is relevant to both the user and the chat. The bot recommends a product not only based on what it knows about the user from their social profile but also based on the context of the discussion they are having at that precise moment in time.

Build a community, not just a brand

In order to engage with customers today, it is no longer enough to promote or build a brand; rather, retailers should be focusing on how they can build their own online community. People respond positively when they feel there is a sense of community around a brand online. Reviews of products and services, social media share buttons, forums, and a blog with the possibility to add comments are especially important. And to deliver these services, retailers need to have the right online marketing platform in place that actively supports their digital community.

If a consumer wants to talk about a business, and they feel they can connect with other like-minded people around a brand to discuss topics and products that are relevant to them, the level of engagement and the way that company is perceived in the community are enhanced. This should be the ultimate goal of creating a personalised online experience for consumers—happy, engaged customers who become brand advocates in their own right. And there is no ad blocker in the world today that can filter out that.

It’s time to get creative

Whatever the general opinion on ad blocking is, the positive outcome is that it is forcing retailers to rethink the way they approach their content. It is no longer sensible to bombard audiences with irrelevant ads that, rather than engage, actively dissuade a potential customer from connecting with a brand.

To outsmart the ad blockers, retailers must communicate to their potential customers on a wavelength that connects with them on a personal level. After all, if advertising is smart and engaging, people will welcome it more. And if that means retailers are more creative in the way they tell their stories, that in itself has to be a good thing.

Duncan Hendy is the content strategy manager at Kentico Software.

 

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