The Mobile Advertising Industry Faces a Tough Road ahead in 2016

by Matt Klassen on December 22, 2015

aycucmprd07807001212The advertising industry stands precariously poised on the horns of a dilemma: pursue the future of targeted advertising and run afoul of privacy regulators and watchdogs, or continue the blanket, carpet-bomb approach we see today and, well, run afoul of everyone with an ad-blocker.

Indeed the advertising industry sees the need for change; it’s clear people don’t like being inundated with irrelevant advertising, they don’t like feeling followed across the Internet, they don’t like advertising sucking up their data, and, most of all, they don’t like ads interfering with their digital existence. The advertising scourge has become so bad, in fact, that 2015 may very well go down in history as the year of the ad-blockers, as the use of such software has risen exponentially during this past year.

The problem is, however, that more targeted, individual advertising, the kind that lands in your lap at the perfect moment, with the perfect deal, for the exact thing you were looking for, comes at a cost, and that cost is our personal data. Given our reticence at volunteering the necessary information, and new regulatory policies that stymie such collection efforts anyways, 2016 is quickly shaping up to be the year the world goes to war with advertising, and we may find out that after the dust settles, we’ve all lost something in this fight.

I’m not sure how many people truly grasp the make-up of our digital world, and just how central advertising revenue is to our current digital existence. Sure the world loves to use Google’s free suite of helpful tools and services, they love to immerse themselves in Facebook’s social network, and they love to post pics to Instagram, but while it’s great that the world doesn’t have to pay for that stuff, people need to understand how those companies make money.

While I’ve always thought connecting primary revenue streams to advertising has always been a bit of a fool’s game, the truth of the matter is that that the likes of Google, Facebook, and Instagram only exist because of advertising, and thus your interaction with those advertisements is ostensibly the price you pay for the services you use. Ignoring or blocking the advertising hampers revenue streams, which, if things get bad enough, will impact the end products people have so thoroughly become dependent on, err… enjoy using.

But the response to such annoying, intrusive and ineffective carpet-bomb advertising has been a call for more personalized, helpful ads, ones that speak to our experience and meet our needs at the exact moment we might want them to. Sounds great, right?

The only problem is that the foundation of such targeted advertising is Big Data, and right now data-protection is a hot button issue and regulators are clamping down data collection and deployment, meaning advertising are caught in a tidy little Catch-22—that people only want to see targeted advertising, but don’t want to release the personal data necessary to make it happen—a paradox that threatens to destroy the advertising industry, and those who depend on it, forever.

Consider that in the EU this month regulators have implemented tough new data-collection regulations, rules that could significantly hamper the ability for businesses to collect and deploy the personal data necessary to make advertising better. According to a memo from the EU, “personal data is any information relating to an individual, whether it relates to his or her private, professional or public life. It can be anything from a name, a photo, an email address, bank details, posts on social networking websites, medical information, or a computer IP address.”

Now it seems on the face of it that such a directive has all but destroyed the advertising industry going forward anyway, as its clear there little left in the old way of advertising, as ad-blockers and the like have taken away that option, while regulators have taken away the only path available going forward, meaning the entire advertising industry, and those such as Google, Facebook, and others who depend primarily on advertising revenues, will have a tough road ahead in 2016.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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