Magazine article CRM Magazine

It's the End of the Ad as We Know It: Organizations Should Shift Spending from Ad Interruptions to Branded Relationships

Magazine article CRM Magazine

It's the End of the Ad as We Know It: Organizations Should Shift Spending from Ad Interruptions to Branded Relationships

Article excerpt

The current advertising model is coming to an end, according to a report from Forrester Research.

Although advertising has powered the economy in the past, society doesn't need advertising like it used to, according to the report. Today's consumers, it said, have less time for interruption-driven media and simultaneously are putting more trust in intelligent agents to guide their decisions. As a result, businesses should shift their spending from ad interruptions to branded relationships, the report asserts.

The report presents data that indicates that both consumers and marketers are frustrated with the current model. Thirty-eight percent of U.S. online adults have installed ad blockers on their phones or web browsers, 50 percent actively avoid ads on websites, and 47 percent actively avoid mobile in-app ads. Furthermore, 67 percent of global consumers trust online reviews by strangers compared to just 47 percent who trust ads that run in search results. Meanwhile, marketers face click-through rates of just 0.35 percent for the average display ad.

But while it might be a bit premature to sound the death knell for digital advertising altogether, James McQuivey, Forrester's vice president and principal analyst serving marketing professionals, sees the rise of a new medium that will fill its place: intelligent agents. By 2025, it's likely that more than 20 percent of consumers will live their lives entirely directed and assisted by intelligent agents, he asserted in the report.

A separate study by Toluna, a provider of on-demand, real-time digital consumer insights, puts adoption numbers for digital assistants even higher. Nearly 40 percent of those who do not currently own voice-activated virtual assistants indicated that they plan to purchase one in the near future, Toluna's research found.

"As voice-activated virtual assistants become fixtures in homes around the world, it is critical for marketers to understand how the rising popularity of AI technology is shaping consumer behavior," said Frederic-Charles Petit, CEO and founder of Toluna, in a statement. "While our research shows that these devices have altered the traditional ways consumers research information, consume media, and purchase products, they also create new opportunities for savvy brands to engage customers. …

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