Pause That Depresses: Forrester Sees Advertiser Revolt as Beginning of the End

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Credit: Forrester

Moves by big advertisers to pause spending on Google, audit media buying and demand greater accountability will at least dent the rise of digital ad spending and hasten what Forrester is calling "The End of Advertising As We Know It" in a report to be released today.

Google's recent street-beating revenue results, despite those spending pauses that began in mid-March, may make digital ad spending growth look inevitable. But Forrester isn't buying it, projecting big advertisers will pull around $2.9 billion out of digital advertising over the next year.

James McQuivey
James McQuivey Credit: Forrester

"Display advertising never worked like we pretended," Forrester's report says. "CMOs know this already, but nobody wants to talk about it." Forrester cites the familiar problems of poor-quality ad placements, barely existent clickthrough rates, non-viewable impressions and rising ad blocking.

The biggest spenders, such as Procter & Gamble Co., feel those issues most, said James McQuivey, lead analyst on the report, so it's no wonder they're taking the lead in pushing back.

McQuivey likens P&G Chief Brand Officer Marc Pritchard's calls this year for increased transparency and accountability to "pulling on a thread" at a time when the fabric of the digital ad economy is prone to fraying.

"Calling them out is step one," McQuivey said. "Pulling dollars away follows thereafter." P&G's projection last week that it will cut ad spending by $2 billion over five years, including $1 billion in media at least partly through a streamlined digital supply chain, is a clear move in that direction. So is its threat to stop spending by year end on digital properties that don't have audience verification from third parties accredited by the Media Rating Council.

But in an interview, McQuivey said advertisers, rather than simply trying to reform digital advertising, should and will re-invest some of that money in emerging alternatives. He doesn't mean the TV upfront, though Forrester cites projections of a healthy 4.5% bump this year by Media Dynamics. Instead, he's talking "persistent personal assistants."

Consumers already are gravitating toward "options for getting what they want without interruptions," McQuivey said, pointing to the likes of Apple's Siri, Amazon Echo, Google Home, Google Assistant and Facebook Messenger or WhatsApp chatbots .

"Interruption only works if consumers spend time doing interruptible things on interruption-friendly devices," according to the report. "Once they can get what they want without leaving themselves open to interruptions – whether through voice interfaces or AI-driven background services – they will feel even more hostile to ad interruptions than they claim to be today."

The same big digital players may well dominate personal assistants as dominate digital advertising, he said. And consumers will have a limited number of commercial relationships they can handle. So most brands will still need to work through hubs developed by others.

But that doesn't mean everyone will have the exact same relationships or brands can't develop their own, McQuivey said. He cited Under Armour's investment in MyFitnessPal, MapMyRun and MapMyRide. A brand such as P&G's Tide could answer consumer laundry questions directly either through its own properties, something developed with one of the major digital players, or programs through appliance manufacturers like Whirlpool.

"Consumers are ready for deeper relationships with the companies that matter to them," McQuivey said. "There are clear steps to take today, including embedding personality in your brand's current conversation."

All this doesn't mean advertisers are "going to turn away totally" from digital advertising, McQuivey said. But they could see a pause that refreshes strategy – or depresses spending growth long term.

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