Banner blindness - Ads, the only way?
Ads, ads, ads everywhere!
How often do you find yourself scrolling through 100’s of ads everyday on Instagram? While the number is ever growing, it is estimated that an average person sees more than 5000 ads a day! Hard to believe right? Try and list out various touchpoints for ads in your everyday life.
Newspapers, Instagram, Facebook, YouTube, Google, Spotify, News Websites, TV Channels, Billboards, Median strips, Taxis, LinkedIn and….what not!
Google publishes an ad 30 billion times a day (!) with 13 million of them being successful. That translates to roughly 0.0004% of CTR (Click through rate).Even though it is no secret that 98% of Facebook’s revenue is generated through ads, it is still surprising how organizations can become one of the richest in the world by just depending on advertisements. The network effect which makes these platforms even powerful has become a one-stop solution for many sellers - big and small.
(No) Attention!
These platforms have been there for a long time and users are now becoming accustomed to dodging ads. Banner blindness is a phenomenon where users consciously or subconsciously ignore anything that looks like banners or ads. This phenomenon is not just limited to visual posts on websites and social media. While there is no conclusive evidence that ads on Spotify and YouTube are causing ‘audio deafness’ (analogous to banner blindness), more and more people are beginning to mute, reduce the volume or even take out their earplugs till the ad ends. Sooner or later, this frustration will exceed the pleasure gained from the core functionality of the product and will tremendously affect the user experience, if they are not already doing it.
What about the above ad in Spotify-by Spotify during every song break, which talks about “Ad Frustration”? Frustrated about ads, upgrade to premium!
Companies like YouTube and Spotify are mighty well aware of how users feel and are responding to these ads. This is where these companies are pushing hard to convert free users to subscribed ones.
Alternate Business Models
As the saying goes, if you are not paying for the product then you are the product. There may be three possible things that can happen in the near future, as companies try and test out various pricing models.
- Frustrate free accustomed users enough to turn them into premium subscribers. As you may be experiencing, Spotify and YouTube are the leading proponents of this business model. At the same time, it’s important to understand that only leading companies with large stable user base can afford this strategy.
- Measured and steady transition towards a paid model. Off late, Quora has started to mask few answers, which can be accessed only by paid users. Disney Hotstar and SonyLIV allow free users to access only a handful out-of-demand shows and reserve the best for the subscribed viewers. Even more, some of the OTT platforms such as Netflix and Hotstar follow a differential 3 level pricing strategy to target and make the most out of their users. Amazon Prime Music, which offers music with no ads only to paid customers, may be the perfect example of how these companies will look to evolve if they decide not to rely on ads.
- Depend on voluntary donations. Signal in order to take advantage of WhatsApp privacy issues, picked this monetization strategy to continue it’s operations. Other that that, Wikipedia which has been the source of information and knowledge for millions, opted to depend on voluntary gifts to continue serving it’s users when their funds dried up eventually.
It will be interesting to see how these B2C companies will transform their pricing tactics as more and more users jump on their platform. While it is near impossible to provide free services for an extended period, only established billion dollar companies can afford that for new verticals, as they try and attract early adopters and other platform users. As users continue to look for cheaper options, new start-ups will look to trade quality for returns before they themselves transform into big tech in this cycle of business.
